Most of Turkey’s gas import contracts expire soon
Monday, February 21, 2022
Significance
Iran halted gas exports to Turkey on January 20, requiring restrictions on usage. Flows resumed in February but as Turkish demand is historically high and likely to remain so through 2022, the cut highlights the dependence of Turkey's energy security on long-term pipeline import contracts with potentially unreliable suppliers.
Impacts
- Pipeline suppliers’ limitations will increase interest in finding new suppliers and boosting volumes for transit.
- The power crisis is likely to increase use of low-grade domestic coal and investment in Turkey’s fast-growing renewables sector.
- Energy subsidies are likely to continue at least until the 2023 elections.