Why are oil prices important to Turkey?
The biggest daily supply shrinkage in history was experienced as a result of the attacks on Saudi Arabia. Oil prices spiked instantly. This situation is more for us than just another “price increase in gas.”
In economies based on a low value-added “overproduction” model, the supply and cost of energy is always a priority. A country in need of imported raw materials and energy is always open to political and economic fluctuations.
I constantly follow the analysis of suppliers and customers in the institutions I am in contact with. I make sure that any supplier does not get more than 30 percent of the total supply, and I warn that any customer should not get more than 25 percent of the turnover because if these critical rates are exceeded, the supplier or customer becomes addictive for the company.
The most obvious example was the crisis hotel investors faced after the Russian plane was shot down because of the boundary violation in 2015. We witnessed that hotel investors, who have built more than 60 percent of their turnover for this customer base because of the increasing interest of Russian tourists, suffered great losses due to the crisis between the two countries. In addition, all the businesses from agriculture to transportation that were designed to sell goods and services to Russia suffered great losses.
Dependence on energy
Turkey is in a similar situation with the energy supply. According to Eurostat, providing more than 40 percent of its oil supply from Iran, Turkey is buying more than 50 percent of its natural gas from Russia. Obviously, Turkish diplomacy is taking shape within the framework of this fact.
The fact that Western countries accuse Turkey for being in a close relationship with Iran and Russia is a mistake. That Turkey procures its energy supply from its neighbors is natural. Nevertheless, it is not easy for Turkey to resist the pressure or impositions coming from Iran and Russia as it will also be affected by anything that happens to these countries. First of all, it should not be forgotten that more than 40 percent of Turkey’s electricity is generated from natural gas. As such, it seems that it has to pursue a careful policy toward Russia and Iran.
However, the fact that Turkey is cooperating with Russia in nuclear energy and defense has started to worry the west. Considering that Turkey has never had a stable relationship with Russia or Iran, I do not underestimate the possibility that the problems will arise in the future, and our dependency on these two countries will reduce Turkey’s diplomatic flexibility.