We are entering a very difficult period where the region surrounding Turkey will be the scene of some of the toughest conflicts and tensions between global powers' "impact sphere." Turkey, carefully watching each stage of this global restructuring based on the competition between the Asia-Pacific and Atlantic, is quickly taking every possible step to strengthen its regional and global position.
In spite of all of the difficulties in the world economy, Turkey is continuing to make moves that will reinforce its claim and dominance in sectors such as global energy, trade and transportation. Similar to how the TurkStream project – which was opened this week – stands out as a project reinforcing the strength of Turkey in meeting the energy supply and security of many countries as well as with the Ovit and Zigana tunnels and the 10-kilometer highspeed railway tunnel between Gaziantep and Adana – which only has 600 meters left to be finished – Turkey's role within the international community will be bolstered.
China is preparing to take the first step to reduce the trade tension with the U.S. through a phase-one agreement, which is expected to be signed Jan.15. For China, it is not possible for the country to be a party to the U.S.-Iranian tension while simultaneously protecting its own energy suppliers, Iran and Russia. Since Saudi Arabia is considered as much an energy supplier as China and Iran, China is unable to hold a position or attitude that completely justifies or condemns Iran. These dilemmas deliver an important message on "reading the present" in regards to the U.S.-Iran tension.
While China's challenging equation is out in the open, the U.S. seriously needs to attain China's abstaining vote in the U.N. Security Council (UNSC) on the condemnation of the attempt to occupy the U.S. Embassy in Baghdad. This whole picture and increasingly complex global economic-political relations make Turkey's growing influence to facilitate more sustainable and effective assignments, reforms and projects critically important.
Turkey will need to understand the effects of the economic-political and geostrategic turmoil caused by the "global center of gravity" competition between the Asia-Pacific and the Atlantic, which has been triggered and accelerated by the 2008 global financial crisis. "Reading today" requires that we focus on the future with national-local technology moves for Turkey's position in Eurasia. From defense to automotive, from cybersecurity to informatics, every move made by Turkey that is focused on the future will make the country more indispensable.
The spotlight is on oil and gold
Following the U.S. operation against Qassem Soleimani, the commander of Iran's Quds Force, and those with him, an ebb and flow of threats between the U.S. and Iran began. Iran sought to retaliate against the U.S. and stated that the U.S. is risking its own citizens in the Middle East through this attack. The U.S. then stated that in the case of more severe retaliation, they will respond with a counterattack, with President Donald Trump increasing the pressure.
Some 25% of the world's daily oil production is based in the Persian Gulf and transported through the Strait of Hormuz. Saudi Arabia and Iran are the two countries that stand out in the region with their oil production. In the period of 2018 to 2024, the U.S. aims to fill the gap created by Iran and Venezuela – which will produce 2.5 million fewer barrels of oil per day due to the embargo pressures on them – and increase its own daily production by 4.5 million to 5 million barrels. The daily increase in oil production targeted by the U.S. between 2018 and 2024 is equal to that of Brazil, Iraq, Norway, United Arab Emirates, Norway and Guyana's combined.
For this reason, the U.S.-Iran tensions have turned into market losses for Iran in terms of global oil production and trade, meaning market gains for the U.S in turn. It also means that the U.S. would sell oil to China, Japan and South Korea and make Asia more dependent in its oil supply. In order to understand the regional developments, particularly including gas disputes, political rivalries or energy wars, we need to conduct a wider examination. What is going in Libya? What does it mean to support Haftar? Will Japan get more involved in the Middle East? Who will control regional energy sources? Such questions require more detailed examinations based on regional realities. Otherwise, analyzing current events or predicting the future would be impossible.
Regardless of the direction of the developments, increasing tensions between the U.S. and Iran, and the threats and risks to oil production and shipping in the Persian Gulf are triggering oil and gold prices. On Friday, Jan. 3, the price of an ounce of gold in global markets rose from $1,528 to $1,552 at the close of the same day. While the price of an ounce of gold rose from $1,460 to $1,552 in one month, closing 2019 at $1515-$1517, it jumped almost $100 in one month and almost $80 in the first six working days of 2020.
Oil prices, on the other hand, are at risk of reaching the $70-$90 per barrel level if the tension escalates further. Therefore, in global markets, the spotlight has turned toward oil and gold. We are entering a three-month period that should be carefully followed by energy importing countries such as China, Japan, South Korea, India and Turkey.