Turkey’s location at the crossroads between the former Soviet Union and the Middle East’s vast natural gas and oil reserves and the heavy energy demands of Europe make it central to the stability of the world’s energy market. As the country’s own energy demands continue to grow, along with the energy demands of Europe and its neighbors, Turkey’s stability and open market will play an even more prominent role in ensuring access and mitigating price spikes in Europe and the Middle East.
At the center of Turkey’s importance to the world’s energy flow is geography. The Turkish Straits are the sole connecting point between the Black Sea and the Mediterranean. The straits, which have been of strategic maritime importance for thousands of years, run through Istanbul and are part of the sovereign sea territory of Turkey. Every day tankers of all stripes carry an estimated three million barrels through these confined waterways (only half a mile wide in some places). Despite some efforts, no economically viable alternatives have been found and the free flow of oil to the Mediterranean and Western markets has remained directly under Turkish control.
Yet the number of pipelines under construction and planned for development, in addition to those currently operating, will soon double the volume of oil and natural gas flowing through Turkey. These changes increase the importance that Turkey’s stability provides in a volatile region and makes the country a critical ally to the U.S. and Europe.
In 2012, Turkey and Azerbaijan signed an agreement to build the Trans-Antolian Natural Gas Pipeline (TANAP) between the two countries, with the objective of diversifying Europe’s gas imports and reducing its reliance on Russian gas. Construction is planned to begin in 2015 and expected to be completed by 2018. Turkmenistan also signed on to a deal to join in on the construction of the pipeline with the hope of increasing its exports to Europe.
Additionally, Russia recently announced a plan to build a gas pipeline under the Black Sea to Turkey. While the plans have not been finalized, the pipeline would replace another previously planned pipeline through Eastern Europe and potentially divert Russian exports that currently flow to Eastern Europe, including Ukraine.
Turkey has a number of other significant domestic and international oil pipelines, including pipelines that facilitate exports from northern Iraq, Azerbaijan and Kazakhstan. The largest of these, the Kirkuk-Ceyhan pipeline, has a capacity of 1.65 million barrels per day.
Turkey’s growing domestic demand for energy, especially natural gas, is also driving the development of these new pipelines. The country’s energy demand is among the fastest growing of the OECD nations, due to its rapidly expanding economy. Its energy demand is projected to continue to grow at a rate of 4.5 percent from 2015-2030, according to the International Energy Agency.
Natural gas consumption is increasing faster than overall energy use, making it Turkey’s most important fuel by volume. As both domestic and international demand for natural gas increases, it is approaching its import capacity and the new pipelines that are coming online are critical for Turkey to continue its role as a natural gas transit hub for Europe while simultaneously supplying its own needs.
With so many conflicts taking place in the region, Turkey’s stability is central to ensuring the free and open flow of a significant portion of the world’s energy and to maintaining the sustainability of energy and trade routes between Western and Eastern markets. Politically, producers like Iran and Russia and consumers like the EU have agreed on very little over the past few years because of divergent political agendas. Yet all value the key role Turkey plays in ensuring the free flow of energy as well as the stability that Turkey provides. This role is expected to only grow in importance as energy demands increase and energy sources diversify worldwide.