You may have thought the Geneva deal struck last month between Iran and the P5+1 nations (the five permanent members of the United Nations Security Council plus Germany) was a sweet one for Tehran — getting billions in sanctions relief in exchange for mere promises to halt its nuclear program.
But Turkey may be an even bigger winner. It just needs to open its doors and wait for Iranian funds to pour in.
Iran was Turkey’s third largest export market in 2012. In fact, Turkey is reportedly exporting more than 20,000 products to Iran right now; among them gold and silver. It turns out that the Geneva deal also loosened sanctions on precious metals.
The White House estimates that this, along with the easing of sanctions in the automobile and petrochemical sectors, could generate $1.5 billion in government revenues for Tehran. But that’s a lowball estimate. Turkey exploited a “golden loophole,” as Roubini Gobal Economics and the Foundation for Defense of Democracies reported earlier this year, and helped Iran evade sanctions for about a half a year. Gold imports from Turkey to Iran in 2012 reached as high as $1.6 billion per month. In other words, if gold sanctions relief is given for six months, using the past as a guide, Iran has the potential to pocket an estimated $9.6 billion if gas-for-gold resumes.
The Geneva deal does not permit Turkey to restart gas-for-gold. It does, however, allow Iran to buy Turkish gold with available cash. Questions remain as to whether Iran will look to be paid in gold and how much gold Turkey is prepared to sell after effectively emptying its coffers to Iran the last time around.