Turkey’s energy import bill down 9.6%
import bill dropped by 9.6 TURKEY’S ENERGY percent year-on-year between January and March thanks to a fall in global oil prices, from $11 billion in the January-March period last year to around $10 billion this year, according to Turkish Statistical Institute (TurkStat) data.
Total imports in the first quarter of the year amounted to $55.6 billion, increasing by 10.3 percent compared to the same period of the previous year, the data showed. •guzhan Akyener, the chairman of the Turkey Energy Strategies and Policies Research Center (TESPAM), said that the low price of Brent crude, which fell to $32 per barrel, was the main factor in the decline of import expenditures.
In barrel terms, crude oil imports surged by 54,000 barrels in the first quarter compared to the same period of last year to 626,000 barrels, Akyener told Anadolu Agency (AA). “This rate of increase coincided with the rapid decline in oil prices due to the drop in demand with the coronavirus outbreak,” he noted. “Given the fact that people are staying at their homes and consumption has fallen as part of the measures taken in Turkey in March, the increase can be explained by the effort to import crude oil to fill existing stock capacities while oil prices are cheap.”
He also remarked that oil prices had decreased by 19 percent annually over the period while the number of crude oil imports increased by 9 percent. “In this case, the economic size of imports dropped by 11 percent. Meanwhile, with oil prices remaining at much lower levels in March, although the total amount of crude oil imports increased, import values in economic volume decreased by $372 million compared to last year. This rate was directly reflected in the current account deficit,” he said.
Akyener said in the first quarter of the year, Turkey’s total exports decreased by four percent compared to the same period of the previous year while imports increased by 10.3 percent to $55.6 billion. “These rates caused the current account deficit to increase,” he continued. “Petroleum and petroleum products exports decreased by approximately $315 million and imports by one billion dollars. This may be related to seasonal oil prices, which declined by about 19 percent, and decreased demand because measures taken to fight the pandemic. It is noteworthy that while imports of petroleum products decreased, all items except petroleum products increased much more than expected.” Akyener said falling oil prices due to the epidemic had had a positive effect on Turkey’s current account deficit. “This situation will likely continue into the second quarter of the year,” he added. “With the third quarter, however, this trend will start to reverse.”
OIL TO REMAIN BELOW $40: EXPERT
Energy expert Dr. Nejat Tamzok argues that China will inevitably suffer from low oil prices rather than benefitting, despite being the world’s biggest oil importer. “China’s governing party would prefer higher oil prices rather than shrinking demand,” Tamzok says, adding that the same applies to India and Turkey. “The decline in oil prices will significantly reduce Turkey’s exports, 25 percent of which are made to oil exporting countries. I do not expect the barrel price of Brent crude to increase permanently above $40 in the next three months.”