ISTANBUL: Shares of Turkey’s banks and the lira currency fell on Monday as comments from the national banking regulator failed to erase investor concerns over a report that lenders could face substantial US fines for evasion of Iran sanctions.
The Haberturk newspaper on Saturday reported six banks potentially face substantial fines, citing senior banking sources. It did not name the banks. One bank faces a penalty in excess of $5 billion, but other fines will be lower, it said.
“It has been brought to the public’s attention that stories, that are rumors in nature, about our banks are not based on documents or facts, and should not be heeded,” the BDDK banking regulator said in a statement at the weekend, adding that Turkey’s banks were functioning well.
A spokesman for the US Treasury, which is responsible for US sanctions regimes, said: “Treasury doesn’t telegraph intentions or prospective actions.”
Two senior Turkish economy officials told Reuters Turkey had not received any notice from Washington about such penalties, adding that US regulators would normally inform the finance ministry’s financial crimes investigation board.
The report comes as relations between NATO allies Washington and Ankara have been strained by a series of diplomatic rows, prompting both countries to cut back on issuing visas to each other’s citizens.
“Given the level of tensions with the US, the market is still skeptical about this denial and they would want to hear a denial from the US to really calm down,” said Inan Demir, a senior emerging market economist at Nomura.
“The numbers mentioned are large ... the largest fine mentioned was $5 billion and that would be a very large fine in comparison to any bank’s equity in Turkey,” Demir added.
The Istanbul stock exchange’s index of banking shares declined 3.2 percent on Monday, underperforming the main share index, which fell 1.09 percent. The lira weakened nearly 1 percent to 3.7050 against the dollar during the day, while the cost of insuring Turkish debt against default spiked to its highest in 12 days.
US authorities have hit global banks with billions of dollars in fines over violations of sanctions with Iran and other countries in recent years.
US prosecutors last month charged a former Turkish economy minister and the ex-head of state-owned Halkbank with conspiring to violate Iran sanctions by illegally moving hundreds of millions of dollars through the US financial system on Tehran’s behalf.
Halkbank has said all its transactions have fully complied with national and international regulations.
President Tayyip Erdogan has said he told Washington that Turkey had never agreed to comply with its sanctions on Iran, and has called on the United States to review the indictment.
The US prosecutors’ charges stem from the case against Reza Zarrab, a wealthy Turkish-Iranian gold trader who was arrested in the United States over sanctions evasion last year. Erdogan has said US authorities had “ulterior motives” in charging Zarrab, who has pleaded not guilty.
Simon Quijano-Evans, emerging market strategist at Legal & General Investment Management, said US-Turkish relations were at the top of the list of issues investors were focused on. “Any negative or positive noise on that front can cause stronger market reaction in either direction.”
Turkey banking shares weaker, regulator dismisses Iran sanctions report
Turkey banking shares weaker, regulator dismisses Iran sanctions report
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
