News Analysis and trade Ideas*

Turkey – unstable energy concentrator

730-90 fxcaptain

Coup attempt Friday night in Turkey revealed how sensitive the oil market is geopolitical incidents at this time. Both WTI and Brent crude futures rose about 1% as events unfolded in Turkey, although Turkey is not a major oil producer. However, Turkey is a major transportation hub of energy and the coup had been successful could well have threatened the flow of energy across borders.

Crude oil pipelines

A major pipeline operated by BP (NYSE: BP) (called the Baku-Tbilisi-Ceyhan) extends from Azerbaijan to the Turkish port of Ceyhan on the Mediterranean. Another racing Kirkuk and Erbil pipelines in Iraq to Ceyhan. Combined, these pipes can carry a maximum of 2.7 million barrels per day, although BP reports that this quarter pipe has only transported about 740,000 barrels per day due to the decreased production in Azerbaijan.
No measures to restrict the flow of oil through these pipes during the recent coup attempt were made, however, they have been sabotaged in the past. Kurdish separatist groups in Turkey have set off sections of pipelines in Turkey and violence in Iraq in 2003, 2009 and 2013 made the flow of oil from Iraq.
As recently as last February again sabotage the flow of oil between Iraq and Turkey stopped. This strike had serious consequences for the Iraqi Kurdish autonomous region that depends on oil revenues for this pipeline and for European refineries had been buying this relatively cheap oil.

Natural gas pipelines

natural gas pipelines crisscross the Anatolian peninsula and several new pipelines are under negotiation. A key natural gas pipeline stretching from the Iranian city of Tabriz to Ankara, the capital. The other one runs horizontally through Turkey and Azerbaijan is connected to the lines of European connection. These pipelines have been sabotaged by both Kurdish separatist groups.

At present, Turkey is at the center of the new natural gas pipeline developments. Despite the Russo-Turkish tensions in Syria and Iran, the two countries were moving forward with a new natural gas pipeline. The current pipeline of Turkey, a Russian-Turkish joint $ 12 billion project, would have led to natural gas from Russia to Turkey, but was suspended in December 2015 after Turkey shot down a Russian fighter plane in the border Syro Turkish.
Since then, Turkey has reportedly been negotiating with Israel to build a pipeline to transport natural gas from the camp of Israel newfound offshore natural gas, Leviathan. Other natural gas pipelines planned for development include the southern gas corridor, a pipeline that would carry natural gas from Azerbaijan to Italy and relieve European dependence on Russian natural gas.

Seaborne oil

Turkey controls a very important bottleneck for maritime oil well – the Turkish Straits (specifically, the Bosphorus and the Dardanelles). An average of 2.9 million barrels of oil a day passed through these narrow in 2013 (about 3% of world supply), mostly from Russia to the Mediterranean.
At the time of the coup, at least ten crude oil approached the Turkish Ceyhan port in Turkey and the Straits. They were forced to anchor on the south side of the strait when the Turkish government stopped all movement across the Bosporus on Saturday, while strengthening control after coup attempt. However, the delay only lasted several hours and sea transport are all functioning normally again.

Key choke point

Although the attempted coup in Turkey had almost no impact on the flow of energy through key regions, the event should highlight the growing strategic importance of Turkey as an energy transportation hub. Turkey is not only a cultural appointment of East and West, it is also a land and sea key bottleneck for oil and natural gas it moves from east to west. Its importance is only growing.


About the author

Forex News

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *

730-90 forex profita