UPDATE 1-Turkey slashes Iranian oil imports in May

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By Humeyra Pamuk

DUBAI, June 29 (Reuters) - Turkey's crude oil imports from Iran dropped by more than 35 percent in May from April as it steps up efforts to ensure the United States waives sanctions on its imports of Iranian oil for the remainder of this year.

Official trade data showed on Friday the country imported 161,000 barrels per day (bpd) of Iranian oil, down from 249,000 bpd in April and 270,000 bpd in March, when the imports were unusually high.

Turkey's May purchases are roughly in line with Ankara's pledge to cut imports of Iranian oil by around a fifth from its annual average. It also shows that even the most loyal customers are reducing trade with Tehran under pressure from Washington.

Iran relies heavily on oil exports, which have dropped by over 40 percent over the past six months. Oil prices have also dropped due to global economic worries, which has further hurt the finances of the Islamic Republic.

Western powers seek to stifle Iran's cash generation as they accuse Tehran of building a nuclear bomb. Iran says its nuclear programme has purely peaceful goals.

The European Union will stop all buying of Iranian oil from July 1. China remains by far the biggest buyer of oil from Tehran, while leading buyers India, South Korea, Turkey and Japan have all chopped their purchases in recent months.

May data showed Iran was still the main oil supplier to Turkey, which in early June won an exemption from the United States allowing it to continue importing crude through December 2012 without facing penalties.

Turkey's overall crude imports in May were lower than in April. An increase in deliveries from Russia, Libya and Saudi Arabia mainly compensated for the fall in Iranian imports.

Turkey's only crude buyer, refiner Tupras, has a term contract with Iran that expires in August, which allows it to lift 180,000 bpd.

Tupras said in early June that it would lift around 140,000 bpd as of May and planned the same amount for June and July.

In the first five months of this year, Iran accounted for nearly 57 percent of Turkey's total crude imports. Its second-biggest supplier was Iraq, followed by Saudi Arabia based on January-May figures. (Reporting by Humeyra Pamuk, writing by Dmitry Zhdannikov; editing by Jane Baird)

Energy Industrials