Energy costs to challenge Turkey

Turkey's energy import bill is projected to remain at the 71 billion dollar level by the end of this year. However, decisions by the two largest exporters, Saudi Arabia and Russia, to implement additional production cuts, combined with expectations that the price of a barrel of Brent crude could exceed 100 dollars, could cause Turkey's energy bill to rise exponentially.

IT HAD EXCEEDED 96 BILLION DOLLARS

According to information in the Medium-Term Program (OVP), sanctions imposed on Russia following the Russia-Ukraine war caused commodity prices to rise last year, pushing Turkey's energy imports to historic levels of 96.5 billion dollars. This year, due to increased gas stocks in Europe and weak demand in China that fell below expectations, energy prices have declined significantly compared to last year's levels, and Turkey's energy imports in the January-July period decreased by 26.2 percent compared to the same period last year, amounting to 41 billion dollars. In parallel, it is estimated that energy imports will fall to 71 billion dollars, a 26.4 percent decrease compared to last year. However, forecasts by the US investment bank Goldman Sachs that oil could rise to 107 dollars in 2024 indicate that energy costs could challenge Turkey over the next two years.

Unless there is a significant change in energy prices, payments of 77.3 billion dollars for energy imports will be required in 2024, and 76.3 billion dollars in 2025. Indeed, the OVP projects that the annual average price of Brent crude oil, which was 100.8 dollars per barrel last year, will be 82.3 dollars in 2023, 86.7 dollars in 2024, and 85.9 dollars in 2025.

GOAL TO REDUCE EXTERNAL DEPENDENCE

The OVP announced last week also included goals aimed at reducing external dependence on energy. Accordingly, oil and natural gas exploration and production activities will be accelerated. Production fields where TPAO is active in the energy sector through various partnerships abroad, as well as fields with potential, will be evaluated. The storage and regasification capacities of natural gas storage facilities will be increased. A facility will be established to produce using Sakarya gas as an input.

News Source: 12punto