USA: No evidence Turkey buys Islamic State oil

A State Department spokesman admitted that there was a longstanding issue of oil being illegally transported to Turkey from wells in what is now IS territory.

But he said the tanker trucks are operated by private smugglers, not directly by the IS group, and Turkey is working with its NATO allies to seal its border.

"We reject, outright, the premise that the Turkish government is in league with ISIL to smuggle oil across its borders," spokesman Mark Toner said.

"And we frankly see no evidence, none, to support such an accusation."

Toner said Turkey had begun steps to seal an exposed section of its frontier with an IS-controlled region of Syria through which much of the trade passes.

"It's a decades-old practice, frankly that predates ISIL, of illicit trade in this region," he said.

'We reject, outright, the premise that the Turkish government is in league with ISIL to smuggle oil across its borders' - US State Department spokesman Mark Toner

"What we have seen is that ISIL relinquishes ownership and sells its oil at the wellhead in Syria and Iraq and that oil is sold to smugglers, middlemen, truckers."

Toner said some of the oil sold by the IS group is bought by the regime of Syrian President Bashar al-Assad, an ally of Russia, and some is smuggled out of the country.

"We work very closely with the Turks, we've been in dialogue with them. We're their NATO ally and a trusted partner," he said.

War of words

Earlier, Russia had upped the ante in a war of words with Ankara that began last week when Turkish jets shot down a Russian warplane on the Syrian border.

Putin on Thursday vowed Turkey's leadership would be made to regret the downing of one of Russia's warplanes.

Moscow has already announced sanctions against Ankara, including a ban on the import of some Turkish foods and reintroducing visas for visitors from the country, insisted Turkey would be made to regret its actions.

"We will not rattle our sabres. But if someone thinks that after committing heinous war crimes, the murder of our people, it will end with (an embargo on) tomatoes and limitations in construction and other fields then they are deeply mistaken," Putin said. 

"We will not stop reminding them of what they did and they will not stop regretting their actions."

The Russian defense ministry accused Turkish President Recep Tayyip Erdogan and his family of directly profiting from the illegal trade in IS oil.

Erdogan today labelled Russian claims "immoral".

"The immoral side of this issue is involving my family in the affair," Erdogan said in a televised speech in Ankara after the Russian defence ministry accused him and his family of involvement in illegal oil trade with IS jihadists after Ankara's downing of one of Moscow's warplanes last month.

Erdogan also said Turkey had proof of Russian involvement in IS oil trade.

Pipeline talks halted

The official announcement of the break-off in the talks dealt another blow to floundering Russian-Turkish ties.

Immediately after the speech Russia's energy minister Alexander Novak announced the suspension of talks between Ankara and Moscow over the major TurkStream pipeline project.

Negotiations over the project to pipe Russian gas to Turkey under the Black Sea have been floundering since Moscow launched air strikes in Syria in late September in support of the regime of President Bashar al-Assad, which Ankara fiercely opposes.

But the official announcement of the break-off in the talks dealt another blow to floundering Russian-Turkish ties, as Putin lamented the damage to a relationship that he has spent years nurturing.  

"Only Allah, most likely, knows why they did this. And evidently Allah decided to punish the ruling clique in Turkey by depriving them of their intelligence and reason," he said.

The latest furious exchange comes as the two countries' top diplomats gear up for their first face-to-face meeting since the plane incident.

Russian Foreign Minister Sergei Lavrov was due to hold talks later Thursday with his Turkish counterpart Mevlut Cavusoglu on the sidelines of a conference in Belgrade after Putin on Monday snubbed Erdogan at the UN climate summit in Paris.

There appears, however, little chance that the two sides will lower the tone as the two strongmen leaders insist the other should apologise over the incident.

Turkish Prime Minister Ahmet Davutoglu on Thursday accused Moscow of running a "Soviet propaganda machine".

"There was a Soviet propaganda machine in the Cold War era," Davutoglu told reporters in Ankara.

"They were called Pravda lies," he said, referring to the daily newspaper that was the mouthpiece of the Communist Party.