Turkey's Iranian oil buying jumps in August

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* Volumes had fallen to a two-and-a-half year low

By Julia Payne

LONDON, Sept 4 (Reuters) - Turkey's imports of Iranian crude oil jumped in August, risking friction with the United States, after hitting a multi-year low in July, as it used Iranian-owned tankers to avoid insurance hurdles, shipping sources said.

The United States gave several countries sanction waivers after they cut imports prior to the imposition of the full embargo. Turkey was granted a 180-day exception from sanctions from June 11 as a result of an initial 20 percent cut.

EU sanctions cover the region's marine insurance sector, which dominates the industry, effectively cutting off all usual avenues for tanker insurance.

Turkish imports of Iranian crude oil surpassed Turkey's 2011 average of 180,000 barrels per day (bpd) in August.

Around 200,000 barrels per day (bpd) of Iranian crude oil were discharged at the import terminals Aliaga and Tutunciflik for Turkey's sole refiner Tupras, data from a shipping source and AIS Live ship tracking on Reuters showed.

Tupras used two Iranian tankers to bring Iranian crude from storage at the Egyptian port of Sidi Kerir. The port is the end-point of the Sumed pipeline, an alternative route to the Suez Canal for oil shipments coming into the Mediterranean from the Red Sea.

The Suezmax Blossom discharged around 145,000 tonnes of crude oil three times at the Turkish port of Tutunciflik and once at its other import terminal Aliaga. The VLCC Valor also discharged at Aliaga.

One of the Blossom shipments and the Valor shipment were lifted from Sidi Kerir at the end of July and arrived at the start of August.

Imports previously plummeted to a two and a half year low in July at 48,000 bpd after Turkey struggled to insure its own tankers to lift the oil and ultimately started using an Iranian vessel.

Western sanctions aim to curb Iran's ability to pursue its nuclear ambitions by cutting off its main revenue stream from crude oil sales.

Iran's remaining buyers - China, India, South Korea, Japan and Turkey - were forced to cut imports sharply in July.

Tupras is wholly reliant on Iranian-owned tankers as they are still unable to insure their own vessels.

"Right now they cannot carry any Iranian oil with their own tankers, that problem is still not solved," said a Turkey based shipping source close to Tupras.

"They are aware of the other countries who pay double the premium they are paying to obtain insurance from other local players like Kish, but for them that is not on the table, at least for now."

Iran's biggest tanker operator, NITC, has $1 billion in ship insurance cover to keep its fleet on the water with alternative cover in Asia and through Iranian privately owned Kish P&I.

Kish relies on state-run Central Insurance of Iran as its reinsurer. Any claim would likely have to go through a sanctioned bank but the firm said it was confident it would be able to pay in the event of an accident. (Additional reporting by Humeyra Pamuk, Jonathan Saul and Daniel Fineren, editing by William Hardy)

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