The Future of Turkey-Russia Relations Post Shipments S-400 Missile System

Russia as a country has been able to come to the forefront of the international arena in recent times, especially since Vladimir Putin came to power, and then in 2000 as the country’s president. But there is one point to consider both in the political and international spheres about Russia, which is that it can be safely said that, after 2000, it has adopted a multifaceted policy in the world of politics, especially with regard to policies on the United States. Perhaps that is why many analysts are simply not able to carefully study the country’s behavior in the regional and international arena. The feeling of the need to develop economic areas and upgrade security lines brings together two more neighbors, seamlessly connected by the Black Sea.

WHY TURKEY BOUGHT S-400 MISSILE SYSTEM?

The Russia’s long-range S-400 missile system is one of the most advanced anti-aircraft and anti-missile systems of its kind, capable of carrying and firing several types of missiles and capable of diverse targets including Continental Ballistic Missiles, Cruise Missiles, and Escape Radar Fighters. The radar network and identification of this system can simultaneously detect 300 targets and prioritize them. The ceiling height of the system is 27 kilometers.

US CONCERNS

Turkey is one of the countries of the North Atlantic Treaty Organization (NATO), and Washington says the entry of the S-400 system into the NATO defense net can reveal the weaknesses of the parties to the treaty. The Trump government is worried that Russian arms purchases and weapons dependence on Russia will push Ankara to Moscow more. However, this is not all, and there are other issues.

Some analysts believe that America’s concerns are partly due to the weakness of the Patriot missile system against the S-400. In this regard, the German newspaper De Velt quoted military experts as saying: “Increasing global interest in the S-400 missile system Russia is due to the technology superiority of the system compared to its similar American model.

The United States has threatened to refuse delivery of more than 100 F-35s to Turkey worth over $10 billion. Meanwhile, Turkish pilots have already been stopped from participating in the F-35s flight training program. Some US media outlets also said that the law on countering US enemies with sanctions (CAATSA) may also be implemented in Ankara. This is the same law that has imposed strict restrictive measures against Russia and Iran.

TRADE AND INDUSTRIAL COOPERATION

The fourth meeting of the Supreme Council for Cooperation between Russia and Turkey, chaired by Erdogan and Putin, was held in Russia, where economic-commercial cooperation was considered. As Russia and Turkey emphasize the development of bilateral cooperation and strategic partnership, the documents of the partners were signed. It also signed Memoranda of Understanding on customs cooperation between the two countries to facilitate customs, transportation, trade and joint ventures, the construction of natural gas storage facilities in underground reservoirs in Turkey, and while the two countries face political challenges, determined to develop industrial cooperation in various fields. Meanwhile, while reaching Moscow and Ankara’s goal of increasing its trade turnover to $100 billion by 2020, the current economic climate suggests that they have not sacrificed their economic interests for political disagreements.

ENERGY RELATIONS

Turkey, because of the geopolitical position and the role they play as the bridge and the route of transit of gas and crude to Europe, are required to redefine their historical and geographic role and become the bridge and the energy transmission hub from Russia and Central Asia and the Caucasus and thus have made extensive efforts in Europe.

Russia is the largest energy supplier in Turkey, and the country imports 60% of its natural gas and 30% of its oil from Russia. According to data from Turkey’s BOTAS, in the first nine months of this year, Turkey has received 34.7 billion cubic meters of gas, receiving 19.4 billion cubic meters from Russia. the construction of Turkey’s first nuclear power plant in the region of “Akkuyu Mersin”, whose implementation is still ongoing, is considered by Russia.  In fact, by concluding the contract for the construction of the first Turkish nuclear power plant on May 12, 2010 by Russia (which is said to cost $ 22 billion), Turkey is struggling with its rich uranium and thorium resources in cooperation with Russia, apart from its greater independence. The need to import energy also acquires nuclear knowledge.

TURK STREAM

Turk Stream is a new export gas pipeline stretching from Russia to Turkey across the Black Sea. The first string of the pipeline is intended for Turkish consumers, while the second string will deliver gas to southern and southeastern Europe. With a huge portion of the 900-kilometer transmission pipeline under the Black Sea, and officially ends its formal offshore phase in the months ahead. It is planned to bring the gas pipeline into operation in late 2019.

VARIABLE MILITARY COOPERATION

Military relations between Turkey and Russia are expanding, and bilateral military defense and military cooperation has entered a new stage.  Rostec won the tender for the construction of a Turkish anti-tank missile system, and it was built and marketed. This is alongside the fact that since the sale of weapons to Turkey, the cooperation of the navy of the two countries, the implementation of joint operations and operations in the Black Sea, the establishment of a coordinated military operation of security and military operations have also been carried out.

Although relations between Turkey and Russia have been developed in a number of areas in a positive direction, there is still a significant difference in some issues between the two countries. Particularly in the context of Syria, although Turkey and Russia are moving along the same threshold, there are serious differences in the two sides’ main approach to the problem of Syria.

CONCLUSION

The United States, with its action to prevent the sale of the F-35s to Turkey, provided Ankara and Russia with more military and arms-related ties, which itself furthered Turkey’s withdrawal from the United States and increased the gap between NATO members. It seems that Washington has basically no longer maintains its previous view of Turkey and has been reluctant to do so in light of some of Ankara’s actions on the regional level, in particular proximity to Russia and non-compliance with US sanctions against Iran.

It can be predicted that the trend of divergence in US-Turkish relations will not only continue but will also intensify in the future. Ankara will try to define its relations and interests in the context of expanding relations with other countries, such as Russia, China and Iran. Not only will regional equilibrium lead to complexity, but also the level of relations between Washington and Ankara will be reduced to an unprecedented level. Ankara officials have tried to diversify their international calls in recent years, and in spite of Washington’s extensive promotional efforts, they have good relations with all the countries that are well-informed, including Russia and Iran, and this policy is not favored by the Washington authorities. At the same time, Donald Trump’s government is trying to refrain from imposing severe sanctions on Ankara, he said, because such a move would make Turkey more distant from Washington.

Russia has always been looking at Turkey as a route to Europe, West Asia and North Africa. In Russia’s view, Turkey is a crucial corridor for the transfer of energy to European and African markets and it is therefore eager to expand oil and gas pipelines through this country, because if this is achieved, the Russians will succeed to simply deliver energy to the Mediterranean without having to utilize the Bosphorus Strait, or even the Dardanelles. So Moscow has come to the point that what it wants and will not be able to ignore is Turkey, and has therefore sought to conceal its secret to keeping the Turks close to the Kremlin agenda.

It is possible for Turkey to full deploy and install S-400. With the buying of S-400 showed its interest to create balance in its relations with the US and Russia.  If Turkey can install S-400 in its border near the Mediterranean Sea, it would help Turkey to take more advantages in the region. Some analysts believe that Turkey is looking to find its place in multipolar world but what is clear that Turkey cannot ignore either side.

Turkey must manage its relations with Russia and the US. Russia plays a key role in Turkey’s energy sector, and the US is Turkey’s ally in the region and NATO. If Turkey installs and operates S-400 fully, it gives an opportunity for Russia to sell more S-400s to other customers and get more political and economic benefits. Technology transfer will be in favor of Turkey if Russia will agree to have technology transfer of the S-400.
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Oil may extend rally


Opec cuts, US sanctions will continue to impact crude supply in Q2

Oil prices, which gained 30 per cent on average in the first quarter of 2019, are expected to continue the rally in the second quarter and likely to trade mostly around $70 a barrel, according to industry analysts.

The first-quarter gain was the biggest quarterly rise in a decade, driven by the US sanctions on Iran and Venezuela as well as cuts by Opec and non-Opec members that were implemented in early January this year.

On Friday, the Brent rose 48 cents to settle at $67.59 a barrel while US West Texas Intermediate (WTI) futures rose 84 cents, or 1.42 per cent, to $60.14.

The oil price in the second quarter is expected to trade between $64 per barrel to $70 a barrel compared to $60 to $65 per barrel range forecast for the first quarter. Industry executives and analysts have put $67.4 a barrel median range for second quarter and as high as $80.

Oman’s Energy Minister Mohammed bin Hamad Al Rumhy on Saturday emphasised that the Sultante will remain committed to Opec agreement until the end of 2019. He predicted crude prices to trade in the range of $65 and $75 a barrel until the end of 2019.

With oil rig count falling and production remaining stagnate last week in the US while the Opec and non-Opec countries also reluctant to make up for the lost volume, the oil prices will rally further in the coming months. The other factors which will influence the oil price upward will be the US sanctions on Iran and Washington’s consistent pressure on traders to reduce their exposure to Venezuela.

“Oil price trend continued to remain upward during March 2019, showing consistent gains since the start of the year and closing little short of the $70 a barrel mark. However, prices are yet to see the peaks seen during October 2018,” said Faisal Hasan, head of investment research at Kamco. 

World oil demand is projected to rise from 99.02 million barrels per day in Q1 2019 to 99.21 million barrels per day in Q2 2019, keeping the oil prices steadily on the upward trend during second-quarter 2019.

Opec and Russia had cut oil production by 1.2 million barrels per day from January 2019 for an initial six months period, which was one of the main drivers for the surge in prices. Opec members agreed to cut 0.8 million while Russia had 0.4 million bpd cut.

Oil producers are planning to hold an ordinary meeting again in Vienna on June 25 and an extraordinary meeting on April 17-18. Reports said Saudi Arabia was trying to convince Russia to stay much longer in the pact of lower oil production, and Moscow may agree only to a three-month extension.

“Saudi Arabia, if necessary, will further reduce its production to balance oil supply and demand. Opec’s next meeting will be held by April 2019 and if Opec members and Russia agree on reduction oil production it can be expected that oil prices will increase,” said Omid Shokri Kalehsar, a Washington-based senior energy security analyst and visiting research scholar in the Schar, School of Policy and Government at George Mason University.

Kalehsar noted that the US is expected to extend waivers from Iran’s sanctions to several countries to prevent a sharp rise in oil prices. “If there is no major political tension in the oil producing region, a balance can be seen between and supply and demand by Q2 and there will be no major change in oil prices,” he said.

Meanwhile, reports said that the US has instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published US sanctions.

“With US sanctions taking Iranian and Venezuelan oil off the market, at the same time Opec and non-Opec producers want to see higher prices and are currently reluctant to make up for any lost volume,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

In addition, the US energy firms last week reduced the number of oil rigs operating to their lowest in nearly a year, cutting the most rigs in a quarter in three years.

According to Baker Hughes, the total number of active oil drilling rigs fell by 8 to 816. Canada’s total oil and gas rig count fell by 17 and is now 88, which is 46 fewer rigs than this time last year.

Waheed Abbas/DubaiFiled on March 30, 2019 ,
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The Consequences Of U.S. Sanctions For Iran’s Oil Industry

Iran’s energy sector has often been the target of US-led sanctions, particularly in response to the perceived risk of a nuclear weapons program. However, after a brief thaw in relations and the lifting of certain restrictions, the United States imposed a new set of measures against Iran’s oil export industry in November 2018.

In October 2016, the peak of its crude oil exports, Iran was selling 2.44 million barrels a day. In 2017, Iran exports fell to 2.1 million barrels per day, earning revenues of around $40.4 billion. By September 2018, that number had dropped to 1.7 million barrels per day. U.S. policy makers are determined to drive Iran’s oil exports to zero and run Iran’s finances to the ground. Iran, meanwhile, needs to prevent its oil exports from falling below a million barrels per day. At the same time, it is hoping that the lack of supply in the market will increase prices as much as possible to allow for a natural balancing out.

A decrease in energy exports will certainly hurt Iran’s economy, and the government will likely struggle to mitigate the effects on ordinary life. Meanwhile, the United States will increase its own share of the global energy market, boosting its exports of liquefied natural gas to countries such as India and Turkey who would otherwise rely on Iran’s vast and near-by supply.

To continue exporting even at its diminished rate, Iran needs to attract capital and technology. Officials at the Ministry of Petroleum have frankly admitted that they need large amounts of capital to develop and maintain oil and gas fields or else Iran will fall well short of the goals of its sixth development plan. Iran hopes to reduce the national budget’s dependence on oil and gain a capacity of at least 4.7 million barrels, with 1.3 billion cubic meters of natural gas and gas condensate reaching 1.1 million barrels a day.

Iran requires around $100 billion in foreign investment for its oil, gas, and petrochemical sector. Most of Iran’s oil wells are in the second half of their lives, with eight percent of oil production dropping automatically each year. The country needs technology and capital from foreign countries in order to maintain, let alone increase, its oil efficiency. Once new sanctions are in place that target companies interested in investing in Iran, there will be even fewer possibilities for foreign investment. Furthermore, the ban on dollar deals with Iran raises the fear among financial institutions that they will feel the wrath of the Treasury Department.

Most technology-rich countries are interested in the investment opportunities the Iranian energy sector affords, from expanding oil wells to developing oil and gas technologies and petrochemical products. If geopolitics were not an issue, Iran would have many ready buyers for its energy. But Iran currently accounts for less than one percent of world trade in gas, despite its massive reserves.

However, every effort to revive the production capacity of oilfields requires high technology and foreign investment. Iran has signed a deal with the Russian company Zarubezhneft for the redevelopment of the Aban fields. It has also planned to sign contracts with Pertamina, an Indonesian state-run oil company, to operate the Mansouri oil field.

U.S. waivers to eight major Iranian oil importers provide the country with an opportunity to keep its share of the regional oil market for a limited time. However, it is inevitable that most of these countries will reduce oil imports from Iran in the first months of 2019, as all major Iranian oil buyers are looking to find alternatives for their supplies. U.S. sanctions present a steep risk to foreign firms otherwise looking to invest in Iran for they might be deprived of the technical cooperation of American companies and the financial resources of U.S. agencies and the U.S. government.

The U.S. withdrawal from the nuclear accord will undoubtedly hold the Iranian energy industry back from achieving its goals in terms of foreign investment and technology. After the re-imposition of sanctions, only Russian companies seem ready to continue work. Last year, the contract for the development of Aban and Persia Fields was signed with Zarubezhneft, but the Russian company has reportedly walked away from the deal. As recently as last month, meanwhile, Lukoil discussed further investment.

Russian companies are also investing in fields that—critically—provide no threat to Russia’s own energy goals. However, once Russian and Chinese companies begin playing an active role in oil and gas activities in Iran, questions regarding the nature and duration of contracts, and the technology used, will come to the fore—provided that these companies, too, succeed in withstanding U.S. diplomatic pressure.

 

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Iran and Saudi Arabia Compete for India’s Energy Market

India now has the highest oil and natural gas consumption in the world and will for the foreseeable future. With exorbitant and ever-increasing energy demands, India is under pressure to diversify its energy supply. Iran and Saudi Arabia are now in a race to meet India’s demand in the international oil and gas market.

 

India is the second largest Asian oil consumer after China. In 2017, India was buying 577,000 barrels per day (bpd) of oil from Iran, accounting for 27 percent of Iran’s total crude oil exports. From January to October 2018, India imported 789,000 bpd of oil from Iran, an increase of 36 percent. Iranian officials have offered significant price discounts to India as a strategy to maintain Iran’s share of India’s oil market, and Iran has insured tankers which transport its oil.

 

Saudi Arabia is one of India’s largest oil suppliers, and the second largest supplier of crude oil and liquefied petroleum gas (LPG). In 2016-17, India’s crude oil imports from Saudi Arabia amounted to 18.5 percent of its total imports or 39.5 million tons out of a total of 214 million. From January to October 2018, India imported 697,000 bpd of oil from Saudi Arabia.From Iran’s perspective, India’s investment in multiple sectors of its own domestic market, especially infrastructure and energy, equates to political insurance. India’s investment in Chabahar port is a case in point.

 

In February 2018, during a visit by Hassan Rouhani to New Delhi, India, Iran signed 15 mutual cooperation documents, the majority of which related to oil and gas fields cooperation. After this visit, it was announced that Iran had eliminated the cost of transporting oil to India for the rest of the fiscal year. The decision was made as a response to India reducing its oil imports from Iran between April 2017 and January 2018. The move marked a success for Iranian policy makers, and it was subsequently stated that India would increase its oil imports from Iran.

 

Saudi Investment in India’s Energy Sector

 

Saudi Arabia plays an active role in energy diplomacy in India. Investment in energy infrastructure is an effective way for Saudi Arabia to infiltrate and influence India’s foreign policy decision-making process. Aramco, the world’s largest oil producer, is looking to invest in foreign refineries to meet demand for oil and increase its share of global markets. This is a strategy that will allow Saudi Arabia to expand its share of Asian markets and essentially leave its rivals in the dust. Saudi Arabia is not only competing with Iran politically but aiming to gain an edge over even-more-productive Iraq to become India’s largest oil importer. Last year, Iraq was India’s largest oil importer.

 

In April 2018, Saudi Aramco and India’s Ratnagiri Refinery & Petrochemicals—a joint venture of Indian Oil Corp (IOC.NS), Hindustan Petroleum Corp (HPCL.NS) and Bharat Petroleum Corp (BPCL.NS)—signed a contract worth $44 billion to build a refinery in the state of Maharashtra in western India. The two sides are contributing 50 percent to this project. Saudi Aramco has said the refinery will have a production capacity of 1,200,000 bpd upon completion. Aramco also said the project would be one of the largest refineries of petrochemicals in the world. According to Saudi Energy Minister, Khalid Al-Falih, refining capacity of 60 million tons of crude oil is said to be Saudi Arabia’s only major investment in India. Aramco is also interested in investing in fuel and petrochemical sales as well as oil reserves in India.

 

Saudi Arabia does have the potential to act on this investment promise. Aramco has shipped three million barrels of crude from three refineries in India, and another Indian refinery is currently negotiating with Saudi officials to sign a contract for one million barrels of oil. Political tensions between Iran and Saudi Arabia, especially over the Yemen crisis, but also enflamed by the US’s withdrawal from the Joint Comprehensive Plan of Action, and new sanctions against the Iranian energy sector, have meant that Saudi Arabia is more than capable of seizing the current momentum in its favor to decrease Iran’s role in regional energy markets, especially that of India.

 

Saudi Investment in TAPI Project

 

Afghanistan, Turkmenistan, Pakistan, and India have recently signed multi-billion-dollar investments in the TAPI gas pipeline project. Saudi Arabia has announced it will invest in the construction of a gas pipeline that will transfer Turkmen gas to Pakistan and India through Afghanistan.

 

With the participation of Saudi Arabia in the TAPI energy transfer project, Riyadh, on the one hand, could draw the US’s support for reducing Russian domination of Central Asian energy resources (through increasing export routes around Russia). On the other hand, with this increase in engagement in the Central Asian energy region, it may be possible for Riyadh to gain concessions in future energy talks, especially in the context of global oil policy, to control the global price of energy carriers.

Security concerns and financial resources pose the main obstacles to realizing the TAPI project, yet Saudi Arabia’s support for the project is merely another instrument to circumvent Iranian power and influence. Saudi Arabia is directly investing in India’s energy infrastructure, as well as offering political and economic support for transportation projects which allow access to the Indian market by side-stepping Iran.

 

For India, the American market is thus more attractive. With the US-imposed sanctions in place, Saudi Arabia is likely to become India’s largest oil supplier. At the same time, however, India will greatly increase its imports from Iraq. Even Nigeria has gained access, so insatiable for fuel is India’s current phase of development. Most oil producing countries have increased their exports to India across the board.

 

As expected, the U.S. has granted waivers to major buyers of Iranian oil in India and allowed them to continue imports beyond the U.S. sanctions deadline. It will not be easy for India to find an alternative to Iranian oil, but it does not mean that in the mid-term or long-term it will be impossible for India to figure out some long-standing arrangement. Saudi Arabia and Iraq are poised to make up the bulk of India’s oil needs. Saudi Arabia is more interested in exporting oil to India in order to weakening Iran’s position in its oil market, with the added bonus of making a dent in the Iranian economy.

 

India and China are interested in establishing an “Oil Buyer’s Club,” to increase their bargaining power and reduce the power of the U.S. oil market by also importing crude from the U.S. China and India had previously proposed to buy Iranian oil in exchange for being paid in Yuan and Rupees.

 

Iran’s main issue (among many) is to be available to attract foreign investment when it does have the chance to bypass sanctions, and this requires an accommodating legal framework, an efficient and fast decision process, and political stability (especially in the international context). These variables are far from being achieved, and the country has a long road ahead.

 

Iran and Saudi Arabia Compete for India’s Energy Market

 

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U.S. Sanctions Threaten India’s Importation of Iranian Oil

Washington has said that to achieve significant reductions in Iranian oil exports it needs India to observe the sanctions.

 

by Rauf Mammadov Follow @RaufNMammadov and   Omid Shokri Kalehsar Follow @ushukrik

When the United States pulled out of the Iran nuclear deal in May, it told countries trading with Iran that they would have to stop soon or face American sanctions.

As the first ninety-day wind-down period for ceasing trading with Iran comes to an end, Washington is ratcheting up the pressure on the main importers of Iranian crude oil.

However, most of the other countries that signed the nuclear deal —including many in Europe—continue to support it. But companies, not governments, import oil—and they are likely to buckle under the U.S. pressure.

A key exception is Chinese companies, which collectively amount to the world’s largest buyer of Iranian oil. They remain defiant against the U.S. sanctions threat, a stance which their government obviously supports. The defiance comes as tension with America already increasing due to a trade war that Washington started.

 

The European Union is also embroiled in a trade war with the United States. This is increasing the pressure on European companies to comply with Washington’s no-trade-with-Iran order. Most have said they will comply with it.

Another important player in the Iran sanctions game is India. In fact, the United States has said that to achieve significant reductions in Iranian oil exports it needs India to observe the sanctions.

Iran’s geographical proximity to India, coupled with India’s growing demand for petroleum, made an oil trading partnership between the two almost inevitable.

In 2017, India imported almost 40 percent of its oil from Iran, making it the second-largest importer of Iranian crude, behind China. India bought $13 billion worth of petroleum products from Iran that year, with crude accounting for the vast majority

The energy cooperation between Tehran and Delhi has not been limited to oil and gas trading, however.

After the Iran nuclear deal was signed in the summer of 2015, India began making major investments in Iran’s oil industry, including building petrochemical and fertilizer plants.

India has also wanted to invest in the Farzad B gas field. An Indian consortium led by the state-owned Oil and Gas Corporation discovered the field in 2012, and it began producing in 2013. A dispute over the terms of India’s participation in the field’s production has prevented a deal from being reached, however.

Meanwhile, Iran’s plan to build a gas pipeline through Afghanistan and Pakistan to India has been stalled due to disagreements over the terms of the deal.

Furthermore, after Iranian President Hassan Rouhani visited India in February, the countries expressed optimism that their trade would double.

Two events undermined that optimism, however. One was the United States increasing its threats to pull out of the Iran nuclear deal —which it ended up making good on in May. The other was Saudi Arabia, Iran’s main political rival in the Middle East, stepping up its energy diplomacy toward India.

In April, Saudi Aramco signed a deal with a consortium of Indian companies led by the state-owned Indian Oil Corporation to take a 50 percent stake in a $44 billion mega-refinery and petrochemicals complex that will be built in the port city of Ratnagiri. The Saudis calculated that helping India create one of the world’s largest refining and petrochemical complexes would not only help tilt it away from Iran but also guarantee long-term Saudi crude sales to India

Meanwhile, the United States has been increasing its diplomacy toward India, with the key goal of persuading India to embrace sanctions against Iran.

 

In addition, America’s ambassador to the United Nations, Nikki Haley, who is of Indian descent, visited New Delhi last month to ask that India reduce its Iranian oil imports.

 

A U.S. Treasury Department delegation followed. It was led by Marshall Billingslea, the department’s assistant secretary for anti-terrorism financing. Given Billingslea’s background, one topic was likely to be a scheme that Iran and India used to avoid previous U.S. sanctions against Iran.

The two visits are already yielding results for Washington.

 

Indian refineries have begun canceling oil import contracts with Iran. Hindustan Petroleum, which owns India’s third-largest refinery, canceled an Iranian oil shipment in July when its insurance company refused to cover the sale because of impending U.S. sanctions.

In addition, news surfaced that Indian conglomerate Reliance Industries , which owns the largest refining complex in the world, also planned to halt Iranian oil imports.

Fearing aggressive Trump administration policies towards Iran, India is also expected to scrap the rupee-based trade agreement it concluded with Iran three years ago, Iranian sources say.

India had used the rupee-rial arrangement to buy Iranian oil before U.S. sanctions were lifted against Iran in 2016. The two sides used Turkey’s Halk Bank as an intermediary in their trading.

 

In May, a federal judge in New York sentenced a top Halk Bank executive to three years in prison for designing and carrying out the scheme. U.S. prosecutors had contended that the deal was used to evade U.S. sanctions against Iran that the Obama administration imposed before the nuclear deal.

Before he became assistant Treasury secretary for anti-terrorism financing, Billingslea was managing director of business intelligence services for Deloitte, where he focused on illicit finance. In the wake of the prison sentence against the Halk Bank executive for the rupee-rial scheme, it was significant that after Billingslea left India, his next destination was Turkey .

 

India did obtain one sanctions-related victory from the United States, however. Washington agreed to allow it to invest in the expansion of Iran’s port of Chabahar if it complies with U.S. import sanctions against Iran.

Chabahar is key to an Indian policy of offsetting Pakistan’s and China’s use of Pakistan’s port of Gwadar to project more power in the region. China has made renovation and expansion of the port of Gwadar an integral part of its $62 billion China-Pakistan Economic Corridor project. The project includes a naval base.

Chabahar is only 107 miles from Gwadar. Iran has asked India to help it build steel and petrochemical plants in the port to boost its economy and increase development along the Makrān coast. It also plans to create a free trade zone in the port to try to spur economic growth.

 

With so many countries trying to flex their muscle in the region —the United States, Saudi Arabia, Iran, China and Pakistan—India is likely to find it harder to strike a balance between competing interests in the Middle East and Southwest Asia.

It will continue to accommodate Iran by supporting the nuclear deal and by participating in mutually beneficial projects such as the expansion of the port of Chabahar.

But it will be increasingly difficult and dangerous for Indian refining and petrochemical companies to find wiggle room that allows them to avoid U.S. sanctions, as they once did.

Rauf Mammadov is a resident scholar at Middle East Institute and Senior Advi

sor at Gulf State Analytics.

Omid Shokri Kalehsar is a Washington-based senior energy security analyst, and Ph.D. Candidate in International Relations at Yalova University, Turkey.

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