Energy

Although lacking in energy resources itself, Turkey has become an important transit point for transporting energy from the resource-rich Central Asian and Middle Eastern countries to end-users in the West. The Bosporus Strait, connecting the Black Sea to the Mediterranean, is a major link in the transportation infrastructure.The amount of oil shipped through the Strait was 60 million tons in 1996, which increased to 150 million tons by 2005. It is expected to rise to 190-200 million tons by 2009.

Logistically speaking, there is a limit to the amount of oil which can pass through the difficult-to-navigate Bosporus Strait. In addition, the potential risk of a spill in the Bosporus, which passes through Istanbul, has spurred the search to find other forms of transportation. Among various alternatives, the Turkish government is supporting the Baku-Tbilisi-Ceyhan bypass pipeline, which started delivering one million barrels of petroleum per day in July 2006.

Turkey is geographically positioned to become a Eurasian energy hub linking major Middle Eastern oil-producing countries and Caspian Sea suppliers with European consumer markets. The location would enable Turkey to earn higher transit fees from end users. Ironically, Turkey’s ascension to the EU complicates these plans, given that the potential for handsome profits in energy heightens official corruption.

In 2007, approximately 30% of Turkey’s energy requirements were being met by domestic sources, with the rest coming from a diverse portfolio of imports. Oil, around 90% of which is imported, meets about 43% of Turkey’s national energy needs. In 2004, Parliament passed a petroleum market reform bill that allowed consumer prices to fluctuate in response to market signals. This set in motion the privatization of Turkey’s national refining company, TUPRAS, which was completed in 2005.