The crisis that has erupted amid the Middle East conflict could ultimately create opportunities for Türkiye and make it a regional energy hub through new partnerships and supply routes, a senior official said Friday.
Energy prices have spiralled following U.S.-Israeli attacks on Iran, which triggered a near-total closure of the Strait of Hormuz, where 20% of the world's oil normally flows. Stalled shipments through the waterway have sent prices skyrocketing far beyond the region and raised the cost of food and a wide array of other products.
Energy and Natural Resources Minister Alparslan Bayraktar warned that the world is experiencing one of the most severe energy crises in history, but said Türkiye is not facing any immediate supply risks.
"From a supply security perspective, we have no issues. We remain on constant alert," Bayraktar told an event in Ankara, adding that the ongoing crisis could have far-reaching and unpredictable consequences for the global economy.
The current situation has caused an unprecedented supply shock, according to the minister, who cited disruptions affecting around 11 million barrels of daily oil supply, which he says represent a significant strain on global markets.
"This is a crisis far greater than previous energy crises. We are facing highly unpredictable conditions, with markets reacting differently every day," he said.
Türkiye is a major energy importer that neighbors Iran and is among the most exposed emerging market economies to the global energy price surge. But officials have touted Türkiye's "manageable" 10% dependence on Middle East oil and the country's protective diversification steps.
Bayraktar pointed to volatility surrounding the Strait of Hormuz as a central factor fueling uncertainty.
"The closure of such a critical route and the fluctuations that followed have put all countries on edge," he said, describing the situation as akin to a "great depression" in the energy sector.
He still said the crisis could create opportunities for Türkiye, which has long sought to position itself as an energy hub.
"The ongoing energy crisis could transform Türkiye into a hub country through new collaborations and new energy routes," the minister noted.
Among the projects Bayraktar highlighted were a proposed pipeline to transport Turkmen natural gas across the Caspian Sea to Türkiye and onward to Europe, and the extension of the Iraq-Türkiye crude oil pipeline to Basra.
He also pointed to the possibility of a natural gas pipeline linking Qatar to Türkiye, describing it as a potentially critical project in addressing supply shortages and price volatility in global markets.
In addition, Türkiye is advancing cross-border electricity interconnection projects, including a green electricity transmission initiative linking Azerbaijan, Georgia, Türkiye and Bulgaria to deliver renewable energy to Europe.
Plans are also underway for a regional transmission line extending from Saudi Arabia to Türkiye.
Türkiye has not faced any supply cuts, though it's still exposed to pricing pressures.
Bayraktar earlier said every $1 (TL 45) increase in oil prices adds about $400 million to Türkiye's energy bill, which was $62 billion last year.
To mitigate the impact of rising prices, authorities implemented support mechanisms, including tax adjustments and subsidies.
Those include a "sliding scale" system that adjusts the special consumption tax (OTV) on fuel products according to changes in oil prices to prevent excessive price rises.
Bayraktar said that the mechanism and a reduction of fuel taxes to zero for diesel aimed at offsetting up to TL 600 billion in potential economic burden by year-end.
Over the past three years, Türkiye has provided approximately TL 1.85 trillion in energy subsidies for electricity and natural gas bills, said the minister.
But the country has lately shifted toward a targeted system where lower-consuming households benefit more from support.
Over the years, Türkiye has significantly expanded its natural gas infrastructure to enhance supply security and flexibility.
Daily regasification capacity has increased from 30 million cubic meters in 2016 to 161 million cubic meters, with plans to reach around 200 million cubic meters through the addition of two new floating storage and regasification units (FSRUs), Bayraktar said.
The country has also diversified its LNG supply portfolio, including imports from North America, and increased the number of entry points into the system.
Underground storage capacity is being expanded as well.
The Silivri Natural Gas Storage Facility currently holds 4.6 billion cubic meters and is set to reach 6 billion cubic meters by 2028, according to Bayraktar.
He said Lake Tuz Natural Gas Storage Facility is expected to see its capacity increase fivefold by 2032.
Bayraktar said Türkiye aims to store at least 20% of its annual gas consumption by 2028, adding that storage facilities are currently around 75% full.
Electricity demand in Türkiye has tripled over the past 23 years and is projected to triple again over the next three decades, requiring substantial investments in generation capacity, particularly in renewables.
Bayraktar highlighted gains in domestic energy production, including output of 9.5 million cubic meters of natural gas per day from the vast Black Sea reserve and 81,000 barrels per day of oil from a major field in the southeastern Şırnak.
He also noted that Türkiye has built one of the world's largest offshore exploration fleets, enabling exploration from the Black Sea to offshore Somalia.
Bayraktar said Türkiye is preparing a new long-term energy strategy, expected to be unveiled in the coming months, focused on building a more resilient, flexible system centered on electrification and digitalization.
Despite recent crises, including the pandemic, supply chain disruptions, the Russia-Ukraine war and regional conflicts, he said Türkiye has managed to maintain stability through strong infrastructure and proactive policies.
"Thanks to our robust energy infrastructure and policies, we have successfully navigated these crises," Bayraktar said.
