Turkey's Energy Minister Bayraktar: Iran continues gas supply to Turkey without issues

Turkey's Energy Minister Bayraktar: Iran continues gas supply to Turkey without issues

Turkey's Energy Minister Alparslan Bayraktar has reassured investors and financial professionals that Iran's gas supply to Turkey remains uninterrupted despite the ongoing conflict between Israel and Iran. Speaking on June 17, Bayraktar stated that there are no evident problems in the piped natural gas flows from Iran to Turkey [1]. This assurance comes as a relief to energy markets, given the potential disruptions that could arise from the escalating tensions in the region.

Bayraktar highlighted that Turkey's annual gas imports from Iran amount to 10 billion cubic meters (bcm), which is a significant portion of Turkey's overall gas supply. This supply is crucial for Turkey, which imports 50-60 bcm of gas annually. The minister also noted that Turkey's oil imports from Iran have ceased since 2019, but crude oil transported from Basrah, Iraq, via the Strait of Hormuz still makes up 20% of Turkey’s imported oil supply. Should the strait be closed due to the conflict, Turkey has alternative supply options to mitigate any disruptions [1].

In terms of global oil supply, Bayraktar expressed confidence that there would be no significant problems. However, he did mention that rising oil prices could exacerbate Turkey's trade deficit. Brent oil prices have already risen from the $60s to the $76s, and the minister expects gas prices to follow suit [1].

On June 18, Bayraktar further clarified that the Turkish government would continue to subsidize gas prices, ensuring that these prices remain flat within the country. This decision is aimed at stabilizing the domestic energy market and protecting consumers from potential price hikes due to global energy market volatility.

The ongoing conflict between Israel and Iran has raised concerns about regional stability and energy supply chains. However, Turkey's reassurance from its energy minister provides a measure of stability for investors and financial professionals. The continued gas supply from Iran to Turkey underscores the resilience of energy infrastructure and the importance of diversified supply chains in managing geopolitical risks.

References:

[1] https://www.theglobeandmail.com/world/article-israeli-strikes-killed-585-iran-human-rights-group-says/