Turkey’s energy market regulator EPDK this week awarded Turkish construction group Siyah Kalem a licence to import gas from Iraq 18 months on from the company’s initial application.
The volumes are small – rising to a maximum of 3.2bn cu m per yr over the first 20 years out of a total 26 – but the fact it has been awarded at all speaks volumes about the state of relations between Turkey and Iraq, and the semi-autonomous Kurdish region of Northern Iraq.
Given the importance of manufactured exports to the Turkish economy and long term worries over the country’s trade imbalance and current account deficit, Turkey’s November trade figures released on Friday could be considered to be a something of a success.
After all a 24.8 per cent increase in exports and a 5.5 per cent narrowing of the trade gap from would be a welcome result for any European economy. For Turkey however, the devil is very much in the detail, with a number of seasonal and other factors making the rise in exports (from $11.08bn to $13.83bn) and the fall in the trade gap (from 7.57bn to $7.16bn) look more favourable than normal.
More pressure is coming Turkey’s way over gas purchases from Iran.
After the Turkish government’s admission last week that Tehran was using revenue from gas sales to Ankara to buy gold and then shipping the metal back home, the gas-gold trade has attracted (almost certainly unwelcome) attention from the US Senate.
One of the strangest recent developments in Turkey has been gold sales to Iran, which have soared, so helping improve the country’s trade and balance of payments figures.
Thanks to this phenomenon, Turkey, traditionally a net importer of the metal, has racked up net gold exports of $5.5bn off the back of total gold exports of some $13bn so far this year, as Gunay Elif Girgin at Oyak Securities in Istanbul pointed out to beyondbrics.
Six months of intense pressure from Washington to persuade Turkey to reduce its oil imports from Iran have apparently paid off.
Figures released on Tuesday by Turkey’s state statistics office TUIK indicate that of the 1.87m tonnes of crude Turkey imported in June only 684,000 tonnes – 37 per cent came from Iran. This is a significant drop on last year when Turkey sourced 51 per cent of its crude from Iran, and on March this year when imports from Iran peaked at 68 per cent of total imports.
By Humay Guliyeva and Pan Kwan Yuk
That is the question beyondbrics found itself asking after it had a look at Turkey’s latest trade figures.
According to data released by the Turkish Statistical Institute (TurkStat), Turkey’s trade with Iran in May rose a whopping 513.2 per cent to hit $1.7bn. Of this, gold exports to its eastern neighbour accounted for the bulk of the increase. Nearly $1.4bn worth of gold was exported to Iran, accounting for 84 per cent of Turkey’s trade with the country.
So what’s going on?