Türkiye is not experiencing any disruption in its natural gas supply amid concerns that escalating tensions between Iran and Israel could impact regional energy flows, a top official said late on Monday.
But energy prices could continue to rise, Energy and Natural Resources Minister Alparslan Bayraktar told reporters, which could mean rising costs for Türkiye, which is still heavily reliant on imports to meet its domestic needs.
“We do not see any issues with supply security. We import gas from Iran but do not purchase oil. There are no problems with gas supply,” Bayraktar said following a Cabinet meeting.
The minister still acknowledged that the ongoing conflict, which started after Israel launched strikes on Iran last Friday, could pose risks to global oil supplies.
Oil prices continued to rise on Tuesday, with analysts saying that uncertainty would keep prices elevated, even as there were no concrete signs of any production losses stemming from the Iran-Israel conflict.
Brent crude futures climbed 82 cents, or 1.1%, to $74.05 a barrel as of 0840 GMT. U.S. West Texas Intermediate crude was up 77 cents, or 1.1%, at $72.54.
"There could be a negative impact on global supply. Prices have already reacted and started to rise. Could they go even higher? Yes, they could, but we don’t see any issues on the supply side," Bayraktar said.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries (OPEC), and there is widespread concern that the fighting could affect exports from there.
Additionally, investors are watching for signs that shipments through the Strait of Hormuz, through which about 19 million barrels per day of oil and oil products flow, may be impacted.
There have been no signs of supply losses, but ships moving in the vicinity of the Strait and the Gulf have been affected by electronic warfare measures that have interfered with navigation systems.
Early on Tuesday, shipping sources said a vessel collided with two other ships sailing near the Strait of Hormuz, highlighting the risks to companies moving oil and fuel supplies in the region.
Despite the potential for disruptions, there are signs that oil supplies remain ample amid expectations for lower demand.
In its monthly oil report released on Tuesday, the International Energy Agency (IEA) revised its world oil demand estimate lower by 20,000 barrels per day (bpd) from last month's forecast, while increasing the supply estimate by 200,000 bpd from last month's estimate to 1.8 million bpd.
Türkiye has not imported any oil from Iran since 2019 but has been receiving crude coming from Basra and passing through the Strait of Hormuz, according to Bayraktar.
He said that Türkiye would need to replace Gulf crude oil – 20% of Türkiye’s overall supply – in case of a possible blocking of shipping through the strait.
Crude oil extracted from a mountainous region of Gabar in southeastern Türkiye now meets approximately 8% of the country’s daily oil demand, he added.
"The most significant impact for us could be in macroeconomic terms, with the increase in import costs. Oil prices have risen from around $60 to up to $76. Similarly, natural gas prices could also rise,” said Bayraktar.
But he asserted that Ankara does not expect any problems on its supply security for oil and natural gas, he added.
“We do not see any issues with supply security. We import gas from Iran but do not purchase oil. There are no problems with gas supply."
Experts echoed Bayraktar’s view and said Türkiye has the capacity and infrastructure to manage potential supply shocks from Iran or disruptions to the recently initiated gas swap deal with Turkmenistan.
Concerns spiked on Saturday after Israel launched drone strikes targeting Iran’s South Pars gas field—its largest production site. While the attacks affected some surface facilities, gas flows have not been disrupted so far, according to officials.
Iran, the world’s third-largest natural gas producer after the U.S. and Russia, has been one of Türkiye’s top suppliers for years. In March, Türkiye also began receiving Turkmen gas through Iran under a swap agreement, with a target of 1.3 billion cubic meters delivered by year-end.
Murat Kalay, secretary-general of the Petroleum and Natural Gas Platform Association (PETFORM), said Türkiye’s enhanced liquefied natural gas (LNG) import capacity and underground storage facilities have significantly boosted resilience.
"We currently receive gas directly from Iran, in addition to Turkmen gas. Negotiations for the new period are ongoing. Thanks to the infrastructure we have developed, particularly by increasing our LNG capacity and utilizing underground storage facilities, we are much more resilient and prepared for extraordinary situations and uncertainties,” Kalay said.
The transfer of Turkmen gas to Türkiye via Iran through the swap method has historically been considered a significant objective, he noted.
"However, the process we have initiated represents only a limited quantity in terms of our total consumption. In the long run, this is certainly an important goal for us,” Kalay said.
“However, rather than the swap method, our primary target is to have Turkmen gas reach Türkiye by crossing the Caspian Sea."
The existing infrastructure and alternative security sources allow Türkiye to easily compensate for the amount it receives from Turkmenistan, he added.
Oğuzhan Akyener, the president of the Türkiye Energy Strategies and Policies Research Center (TESPAM), said the Israeli drone strike had hit a surface facility related to Phase 14 of the South Pars field.
However, he suggested that the gas flow was not disrupted.
Akyener explained that a significant portion of Iran's natural gas production comes from this field, stressing that had the surface facilities in the main supply and transport sections been hit, the impact would have been much greater.
“The production process consists of multiple phases. There may be a temporary disruption in the unit identified as Phase 14, but overall, there is no halt or shutdown in production and transportation,” he noted.
“So, could this attack lead to a disruption in Türkiye's gas supply from Turkmenistan or Iran? At the moment, such a situation does not appear to be the case."
With demand also falling during the summer, Akyener emphasized that Türkiye faces no immediate need for increased gas volumes.
Still, large-scale attacks by Israel on Iran's gas production and transmission infrastructure could be expected in the future, according to Akyener. And this could hinder both Iran's gas supply and Turkmen gas procurement via swap agreements, he added.
However, Türkiye “has the capability to manage this process even if the Turkmen swap option is halted or gas supply from Iran is cut off."
