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    Middle East
     Apr 5, 2012

Turkey cuts Iran oil imports
By Robert M Cutler

MONTREAL - Turkey will cut oil imports from Iran by 20%, the national oil refining company Tupras announced at the end of last week. Turkey is the fifth-largest importer of oil from Iran. The 200,000 barrels that it imports from Iran every day represent almost one-third of all its oil imports and 7% of Iran's exports.

A new US law penalizes foreign financial institutions engaging in transactions with Iran's central bank, in consequence of Tehran's intransigence over its nuclear program, repeated failure to cooperate with inspectors from the International Atomic Energy

Agency, and consequent condemnation in a series of resolutions of the UN Security Council.

Turkey will replace the Iranian oil imports with crude from Libya after Saudi Arabia refused to grant it preferential treatment. Turkey is expected to continue seeking an exemption from sanctions from the US State Department, which has given such exemptions to Japan and 10 members of the European Union but only after they committed to significant cuts in imports from Iran.

The Turkish move makes China the only significant importing country that has not yet officially committed to decreasing imports from Iran. The International Energy Agency estimates that Tehran's exports may fall by up to one million barrels per day later this year as a result of measures by the European Union, China, India, Japan, and South Korea.

While US diplomats praised the Turkish move, which was widely commented on internationally, less attention was paid to Prime Minister Recep Tayyip Erdogan's visit to Tehran on the very day of the announcement, where he signed preferential trade deals designed to more than double the bilateral commerce between the two countries.

That agreement was signed in the margin of meetings held by Erdogan and his Foreign Minister Ahmet Davutoglu with Iran's President Mahmud Ahmadinejad and religious leader Ayatollah Seyyed Ali Khameini over the situation in Syria.

According to Iranian state television as reported by China's Xinhua news agency, Khameini told Erdogan that Iran would continue to support the Assad regime in Syria and was "strongly opposed to any interference by foreign forces into Syria's internal affairs".

Despite Turkey's "zero problems" doctrine in foreign policy, problems have only been multiplying; the slippage in Turkey's regional prestige over the Syrian issue, which it cannot resolve without Iran's cooperation, is but one of the problems that refuses to disappear. Davutoglu, who originated the "zero problems" doctrine, is now caught in cognitive dissonance trying to reconcile it with the antagonism emanating from Iran.

"Solutions based on Assad's staying in power are not realistic," Davutoglu said, yet Turkey and Iran must "work [together on] this issue" because "a regional balance based on hostility between Turkey and Iran" is impermissible.

The policy appears to be based on the assumption that other countries in the region will share Turkey's preference for "zero problems" or else be convinced by its example. He must now cope with the fact that Iran has demonstrated its refusal to fall into either category. He is doing so now by compartmentalizing contradictory aspects of reality in his thinking so that they do not undermine a basic premise on which he has built the country's foreign policy.

Segments of the Iranian political elite represented for example by long-standing and influential Revolutionary Guards chief Mohsen Rezaie multiply anti-Turkish criticisms. Reuters recently quoted Rezaie as saying that the Istanbul venue for scheduled April 13 nuclear talks, between Iran and the five UN Security Council permanent members plus Germany, is unsatisfactory because this "might give this wrong impression to the opposite side that Iran has grown weak and is in a weak condition".

What this means is that Rezaie regards Istanbul as a hostile location for such talks. Nor is he alone. The same Reuters dispatch reports that Esmail Kowsari, a member of parliament, accuses Turkey of playing of the role of messenger for the US and Israel, while Parliament Speaker Ali Larijani has called the Istanbul meeting a "conference to bribe Israel". This must be extremely frustrating to Erdogan and Davutoglu, who have gone out of their way to excoriate Israel at every public opportunity.

Yet the problems that Davutoglu seeks to turn aside multiply even on the merely bilateral level. For example, Turkey purchases natural gas from Iran, paying US$423 per thousand cubic meters, which is more than any other country pays despite its being immediately next door.

Ankara has long tried to negotiate a lower price, but Tehran has refused to discuss the matter. As a result, Turkey has been forced to turn to international arbitration courts, even though Iran's constitution forbids its government from accepting or implementing the decision of such tribunals.

Civilian trade between the two countries, estimated to be worth $16 billion this year, is still unlikely to be affected, even if the $35 billion annual target invoked in the signature of the bilateral trade preference agreement in Tehran is not reached.

Dr Robert M Cutler (http://www.robertcutler.org), educated at the Massachusetts Institute of Technology and The University of Michigan, has researched and taught at universities in the United States, Canada, France, Switzerland, and Russia. Now senior research fellow in the Institute of European, Russian and Eurasian Studies, Carleton University, Canada, he also consults privately in a variety of fields.

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