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From Tehran to Tripoli, Turkey is at the heart of illicit crude trade.

Turkey has long led the way in the smuggling of crude oil. That is why it was no surprise when the latest export data based on ship tracking showed that Ankara imported half of the sanctioned Iranian crude oil in June -- the remainder going to China.

The China imports are accounted for by long-standing commodity swap arrangements, but how is Turkey still able to import 200,000 barrels per day (bpd), despite the deepening economic sanctions on Tehran?

Turkey is often cited as having the largest oil smuggling network, taking advantage of its strategic location and with a pipeline that carries oil to the Mediterranean.

The practice could not happen without the approval of the Turkish authorities. It is also worth recalling that the financing of Daesh was primarily provided through the sale of stolen crude oil stolen from parts of Iraq and Syria that the group seized in 2013. At that time, the US estimated Daesh generated at least $500 million in crude oil sales annually.

Today we see Ankara once again taking a central role in the smuggling of crude oil -- from Iran to Libya

Faisal Faeq

By 2015, Russia was publicly accusing Turkey of heavy involvement in smuggling crude oil from Syria and Iraq that had been stolen by Daesh.

Turkish President Recep Tayyip Erdogan and his family were said to have benefited from the illicit trade.

Contracts were signed with several refineries with links to the Ceyhan pipeline, to supply them with such stolen oil, which was then transported on to international markets under the pretense that it was all above board.

The Turkish president denied the Russian accusations at the time.

Today we see Ankara once again taking a central role in the smuggling of crude oil -- from Iran to Libya.

When an Iranian very large crude oil carrier (VLCC), carrying 2 million barrels and was detained by the British Royal Navy in Gibraltar, Tehran claimed that the tanker was going to Syria.

But how do we know that Syrian ports can still receive such a large cargo after the damage they have sustained? They simply do not have the berth capacity to handle ships of this size.

Meanwhile in Libya, Turkey's support of militias in the western region of the country may also be a factor in the sharp spike in Turkish oil imports this year.

Data from the Energy Market Regulatory Authority (EMRA) report released in March shows that Turkey's overall imports of oil products increased by 18.4 percent in January 2019 to 3.1 million tons, compared to a year earlier.

The production of oil refinery products increased by 26.7 percent to 2.3 million tons. In addition, diesel and gasoline production was up by 7 percent and 13.9 percent.

Can such increases really be explained by domestic demand?

* Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq

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Publication:Arab News (Jeddah, Saudi Arabia)
Date:Aug 3, 2019
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