Turkey sees no evident problems in piped natural gas flows from Iran and, in general, the security of its overall gas supplies, Turkish energy minister Alparslan Bayraktar said on June 17.

Annually, Turkey imports 50-60bn cubic metres (bcm) of gas. Its gas contract with Iran runs to imports of 10 bcm, which flow through a cross-border pipeline.

Fifth of Turkey's oil passes Strait of Hormuz

Since 2019, Turkey has not bought oil from Iran, according to Bayraktar. However, crude transported on tankers to Turkey from Basrah, Iraq, via the Strait of Hormuz that is off Iran's coast, made up a 20% share of Turkey’s imported oil supply last year.

This would be replaced in the event that the strait was closed amid the Israel-Iran conflict, the minister said.

No supply problem but trade deficit a headache

Bayraktar also said he saw no problem in global oil supply. Turkey could replace its Basrah oil purchases with alternatives if required, he determined. However, he saw a widening of the Turkish trade deficit if there were rising oil prices.

Brent oil prices have already risen from the $60s to the $76s. The minister expected gas prices to go up in parallel.

Gas prices to remain flat, gasoline prices to rise

On June 18, Bayraktar said that the government would keep subsidising gas prices and, as a result, these prices in the country would remain flat.

Gasoline prices, meanwhile, are automatically set based on a formula. These prices would go up in line with crude oil price hikes, Bayraktar added.

Reserves burnt to keep lira flat

The Turkish central bank’s net FX position has fell to $22.7bn as of June 16 from $28.1 as of June 13, according to calculations by @e507.

A total of $1.3bn worth of eurobonds were scheduled to be redeemed on the day. The remainder was assumed to have been burnt through to keep the USD/TRY pair flat in the 39s.

Still, the financial mood in Turkey is far from panicky. Alarm bells, however, will start to ring if the war prolongs.

Flights in limbo

Turkish Airlines (THYAO) has extended its flexible booking option for Iran, Iraq, Syria, Jordan and Lebanon flights to June 30.

On June 13, Turkey’s transport minister, Abdulkadir Uraloglu, announced that all airline operators in Turkey had cancelled all flights to Iran, Iraq, Jordan and Syria.