Turkey Buying Venezuelan Gold to Pay for Iranian Oil?

By Scott Morgan

When following the accounts of the murder of the Saudi Royal Family's critic, Mr. Khashoggi, one would think that the Turkish President, Recep Erdogan, is making the effort to portray himself as a paragon of virtue. But some of the actions, regarding economic sanctions, should be addressed.

On November 4th, a new series of sanctions against the Islamic Republic of Iran will come into effect as a result of the Trump Administration withdrawing from the JCPOA (Joint Comprehensive Plan of Action). It is expected to occur some kind of disruption in the regional economy as these measures take effect and have a slight impact. Several companies have taken the steps to cease activities in Iran to ensure they maintain unfettered access to the US Financial System.

Turkey has been a crucial market for the Iranian Petroleum Exports for years. When the sanctions regime take bite it is expected that exports will not have easy access to market via the Strait of Hormuz. Earlier this week, a delegation was at the US Treasury Department to negotiate a waiver to prevent any punishment from the US regarding business done between these two neighbors. So this is one series of sanctions that Turkey is seeking to bust to preserve its own bottom line. 

That being said, there is another area where the Treasury Department has been monitoring Turkish actions in a country that is under sanctions. In fact, at a recent event at the Brookings Institution, in Washington, an official actually called for this relationship to be revealed officially by Treasury. Confirmation of this should have calls for greater scrutiny of relations between Washington and Ankara. 

As a result of the collapse of the Oil Industry in Venezuela, the Maduro regime decided to nationalize the Gold Industry in the Country - in order to seek new revenue streams. Venezuela has some of the largest untapped Gold reserves in the World so this move should not come as a surprise. A concern is that the Government has driven private companies out of the industry and have replaced them with State entities or Political Cronies - not to mention the fact that these companies can operate without environmental oversight and customs regulation. These actions should have groups (monitoring illicit Mining activities) putting Venezuela under greater scrutiny.

The Treasury Department has reported that the Turkish Government has purchased tons of Venezuelan Gold in recent months. 

There have been efforts by the Turkish Government to purchase and prop up the Venezuelan Cryptocurrency (Petro) as well. The current volatility within the Cryptocurrency Markets makes this move a very risky venture at this point as the Petro is tied to the Venezuelan Oil Industry.

Considering the ties between Caracas and Tehran, and the tacit support of backers such as Russia and China, one question that could be asked is: considering the issues plaguing the Turkish Economy is the purchased Gold being used to pay for the Iranian Oil?

Although this topic was not specifically mentioned by the speaker from the Treasury Department, this is probably not outside the realm of possibilities. 

[The views expressed in this publication are solely those of the author(s) and do not necessarily reflect the views of Dissecting Society. © 2007-2018 Author(s) ALL RIGHTS RESERVED]