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Thursday, August 11, 2011

Turkey helping Iran beat sanctions

Here's yet another reason why sanctions against Iran are not very effective: A state-owned Indian oil company has announced that it is paying its bills for Iranian oil via a state-owned bank in Turkey (Hat Tip: Joshua I).
India's top state-run refiner, Indian Oil Corp Ltd, said on Wednesday it had begun paying its debt to Iran for oil imports and would clear an outstanding of 380 million euros this month using an arrangement with a state-controlled bank in Turkey.

P.K. Goyal, finance director of IOC , said the company had paid off 73 million euros and was expecting one cargo of Iranian oil in September.

Indian refiners, Iran's second-largest oil buyer after China, racked up a $4.8 billion debt after the Reserve Bank of India scrapped a clearing house system last December -- a move welcomed by Washington as it tries to isolate the Islamic Republic.

As debts mounted, Iran refused to issue Indian refiners with firm crude supply plans for August, forcing them to look for alternatives.

But with payments flowing again through Turkey's state-controlled Halkbank , Indian refiners expect Iran to resume 400,000 barrels a day of oil exports in September.

Goyal said the payment mechanism through the Turkish bank looked "as of now" like a permanent arrangement.
I have said before that I don't believe that there's a way that sanctions can stop Iran. But given that the Obama administration considers Turkey such an important ally that it is trying to squeeze an apology out Israel to satisfy it, and given that both Israel and the US have cordial relations with India, one might expect to see more effort to put a stop to this.

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