Iranian had threatened to shut down the world's most important oil export route, the Strait of Hormuz. (Photo:Reuters)
Turkish refiner Tupras plans to cut its dependence on imports of Iranian oil and will meet Saudi Arabian authorities this month, industry sources familiar with the company's strategy said on Thursday, as Western powers crack down on Iran's oil sales.
Turkey imports more than 30 per cent of its daily consumption from Iran and has so far given no indication that it will comply with a planned European Union import embargo on Iranian crude.
But one of the sources said that Iranian threats to shut down the world's most important oil export route, the Strait of Hormuz, had helped push Turkish oil officials to try to reduce the country's heavy dependence on Iran's oil.
Iran has made no move to shut the world's most important oil export route, which had a daily flow of almost 17 million barrels last year, but has threatened action if Europe implements new sanctions.
Another of the sources said Tupras officials were planning to meet Saudi Arabian oil authorities this month, with a view to switching to alternative sources of crude by the summer.
Tupras declined to give an immediate comment.
"I think the meeting is to learn the supply capacity ahead of (state oil company Saudi) Aramco's other clients," said the first source, adding that other oil producing countries would also be contacted.
"I don't think Saudi can cover all of the import requirements. You must consider demands made by China, Korea, India, Japan also," he said
"Maybe at most, half of its Iran imports may be substituted," he estimated.
A Saudi source said the kingdom's oil authorities were getting more orders to replace Iranian crude but declined to comment on specific requests.
The first source said Turkey was also planning to meet with oil suppliers from Russia, Azerbaijan and West Africa.
According to sources familiar with the Russian oil market, Turkey has begun to show an increased interest in its crude supplies.
"Tupras has been recently buying more Urals. I guess right now everyone is trying to diversify from Iran one way or another," one trader said.
The Obama administration is mulling its options to make countries cut their imports of Iranian crude, without driving oil prices higher and risking hurting the U.S. economy in an election year.
Tensions in the Gulf have caused occasional spikes in oil prices in recent weeks, and major importers of Iranian oil have opposed an embargo on Iranian crude, fearing this would send oil prices rocketing at a time when they can least afford it.
Officials in Saudi Arabia, however, have signaled they are ready to fill a supply gap.
US officials have travelled to China, South Korea and Japan to persuade some of Iran's biggest customers in Asia to cut purchases.
The European Union is likely to agree on an oil embargo against Iran Monday, France's foreign minister said on Thursday.
Real cuts in Europe will take time, however. The countries that are most reliant on imports from Iran are also those most exposed to the euro debt crisis.
Italian, Greek and Spanish companies have already said they planned to extend most of their oil supply deals with Iran and expected to win a sanctions reprieve from the EU for six months or longer.
But even if the West implements sanctions, it is unclear whether it will succeed in choking off a vital source of income for Iran.
China, the biggest buyer of Iranian crude, has stepped up opposition to an embargo in recent weeks. India, which relies on Iran for around 12 per cent of its crude, has said it will continue to do business with the Islamic Republic.