Turkey turmoil may hit crude transport

At the crossroads of Europe and Asia, Turkey is a vital conduit for oil shipments

The attempted military coup in Turkey may boost oil prices by imperilling crude shipments through the country, a major energy-trade corridor. For now, shipping lanes are clear.

The Turkish straits are open and shipping traffic hasn’t been disrupted, an official at the Istanbul-based shipping centre said by phone yesterday.

“Any uncertainty in that region almost invariably results in an increase in oil prices, particularly given the interaction between what goes on in Turkey with Syria,” Craig Pirrong, director of the Global Energy Management Institute at the University of Houston’s Bauer College of Business, said in a phone interview. Analysts will be looking to see whether there’s a “spillover to the major oil producers,” he said.

At the crossroads of Europe and Asia, Turkey is a vital conduit of crude transport from Russia and Iraq to the Mediterranean Sea. Millions of barrels of oil travel through the nation’s waterways and pipelines each day. The nation is also on the fringe of broader conflict in the Middle East. Syria borders Turkey’s southeastern edge.

Turkey’s leaders said they have quelled the attempted coup after hours of clashes that saw tanks blockading roads, soldiers fighting police and warplanes bombing the parliament in Ankara. More than 1,500 military personnel were arrested, the presidency said.

Oil gains

Crude oil futures rose above $46 (Dh168.82) a barrel in aftermarket trading in New York following the unrest, extending gains from a force majeure declared by ExxonMobil Corp on crude shipments from Nigeria.

David Goldwyn, a former State Department special envoy and coordinator for international energy affairs in the Obama administration, said it was too early to assess the impact on energy transportation from the unrest in Turkey.

The Turkish Straits, including the Bosphorus and Dardanelles, are one of the world’s major chokepoints for seaborne crude transit, with about 2.9 million barrels of oil passing through in 2013, the latest year of available data from the US Energy Information Administration.

Turkey is also home to pipelines that transport crude and condensate from nations including Iraq and Azerbaijan to Ceyhan, on the Mediterranean in southern Turkey.