Turkey has long been a central hub in natural gas and oil markets. Pipelines from Russia, Iraq and Azerbaijan pass through the region. Additionally there major ports along the Mediterranean as well as along the Black Sea provide major ports for oil tankers.
In a country with so much oil and natural gas passing through it seems unlikely that they would need to diversify their energy sources. However, this is exactly what Turkey is doing. According to the U.S Energy Information Agency, demand is set to double within the next 10-15 years. This demand is currently being met through imports of oil and natural gas.
As indicated above Turkey relies almost entirely on imports to satisfy this energy demand. Also made evident by the above graph is the low production rates of hydrocarbon production within the country.
An important development in Turkey’s search for energy sources is the easing of sanctions on Iran following the most recent nuclear deal. While Iranian natural gas is currently more expensive than Russian natural gas, and the Russians have proposed continued price cuts to undercut the Iranian exports, Turkey has definite plans to increase trade with Iran. This would provide the Iranians the opportunity to increase their volume of production and will eventually, as the Turk’s hope, reduce the price of Iranian natural gas.
The necessity of diversifying energy sources beyond just Russia comes can best be summed up by the foreign relations of the two countries. Richard Weitz described the relationship as “overt friendship and restrained competition.” This stems from lingering Cold War tensions as well as disagreement on various issues throughout the region.
This is a very interesting issue given the regional politics especially considering the recent strains in relations between Iran and Turkey over the Syrian Civil War. Both countries are at odds with each others response to the conflict.
Ultimately Iran needs to build stable and maintain stable and long lasting relations with Turkey if they want to gain market access to Europe as the majority of pipelines will pass directly through Turkey.
This is undoubtedly an issue that will come up with greater frequency in the future as Iran enters the global markets following the lifting of economic sanctions and as Turkish energy demand increases with their growing population.
What this will mean for the future is a much stronger Iran. If Iran has easy and unrestricted access to European Markets their power will increase significantly as their economy improves. Further, Turkey, an already powerful regional player will grow in power as their prospects of energy security improve. Ultimately in a region plagued by instability this could be a much needed step in the road to rebuilding the Middle East.