gas

Daniel Dombey

Photo by Getty

An energy and diplomacy deal that would reshape the map of the eastern Mediterranean might be proceeding faster than many people think.

It is just a few weeks since, in a bid to revive frozen diplomatic ties, Israel apologised to Turkey for a deadly raid that left nine Turkish citizens dead. The process was still sufficiently shaky for US Secretary of State John Kerry to come to Istanbul last weekend to chivvy both sides to go all the way and exchange ambassadors.

There are plenty of potential slips on the way ahead: compensation has to be agreed; the fate of Turkish court cases against retired Israeli commanders has to be decided (at present, they are going ahead); and Ankara still has to pronounce itself satisfied with the lifting of restrictions on civilian goods to Gaza (relevant, because the flotilla stormed by Israeli Defence Forces in 2010 was seeking to break the Gaza blockade). Read more

Daniel Dombey

Gold bars are seen at the Czech Central Bank on September 05, 2011 in Prague (MICHAL CIZEK/AFP/Getty Images)

The golden stuff (AFP/Getty)

It must rank as one of the most thankless jobs in diplomacy. Just how do you draw up incentives for Iran to rein in its nuclear programme?

Talks have lumbered on, in one incarnation or another, for a decade now. Efforts to win over Tehran have been encumbered by mutual suspicion, political sensitivities (there is always the charge of appeasement) and sheer force of law.

Many of the sanctions the Islamic Republic most objects to are already on the statute book, whether as UN Resolutions, EU agreements or US law. No wonder it is difficult to come up with a compelling offer; few countries can change their laws by fiat.

On Monday, Tehran attacked one of the latest ideas seemingly floated by the world’s major powers – the notion the US could roll back recently imposed sanctions on gold sales to Iran.

The idea may have been designed to help Western allies – notably Turkey –as much as to alleviate Iran’s economic isolation. Last year Ankara became the world’s leading gold exporter to Iran, whether directly or through entrepôts such as the UAE. Demand from the Islamic Republic helped Turkey’s overall exports of the metal reach levels of $1.5bn-$2bn some months.

The trade has various explanations – chief of which is that bank transactions with Iran have become ever more problematic, particularly in the wake of measures affecting Swift, a group that facilitates electronic funds transfers. Against this backdrop, Tehran started taking payment for its oil and gas exports to Ankara in Turkish Lira – instead of via bank transfer – and using the money to buy gold it then ships home. Read more