Conflict and Green Energy: Turkey’s Challenges to Becoming a Regional Gas Hub

For decades, Turkey has dreamt of becoming a regional gas hub. It has sought to compensate for its lack of domestic hydrocarbon resources by taking advantage of its energy-rich neighbours and position itself as the leading energy partner in the region. To be sure, Turkey is already an important transit country for Russian, Middle Eastern and Central Asian gas. But in order to become a ‘gas marketplace’, several obstacles lay ahead for Ankara: namely the geopolitical tensions in the Eastern Mediterranean – particularly with Cyprus and Israel – and Europe’s push for decarbonization. These obstacles might force Turkey to not only look for new partners or reinvent its diplomatic relations, but to entirely transform its energy sector.

Energy is at the center of Turkish politics. Due to its low level of natural gas production (0.03 bcf/day), Turkey virtually imports all the energy it consumes. This dependence is not slowing down anytime soon, as both consumption and demand are high. This situation puts Turkey in a tough spot, as it has contributed to budget deficits and made it vulnerable to volatile energy prices. For these reasons, Ankara has sought to diversify its energy partnerships and shore up its green energy investments. Energy is a central issue for both domestic and foreign politics. At the domestic level, the government’s priority is to boost its popularity by addressing the issue of soaring energy prices. At the international level, the principles guiding Turkish diplomacy gravitate around the need to respond to increasing energy demands at home, the quest for diversification of energy partners, and the need to reduce carbon emissions. All of these serve a bigger purpose for Ankara: to reinforce Turkey’s status as a regional power by making it an unavoidable energy partner in the region. But the road to reach this goal is not without obstacles, one of which being the ongoing geopolitical disputes in the Eastern Mediterranean.

Energy cooperation in the Eastern Mediterranean has been hindered by conflict, which dissuaded foreign investors from pouring money into infrastructure projects. In 2019, Egypt, Cyprus, Israel and Greece agreed to form the Eastern Mediterranean Gas Forum. It has since been joined by France, Italy, Jordan and Palestine. The EMGF was designed to foster energy cooperation in the region and act as a unifying force. Despite some level of cooperation, geopolitical ambitions remain an important source of friction. A manifest example is the dispute between Turkey and Cyprus over Exclusive Economic Zones. The Republic of Cyprus, which covers two thirds of the island and is internationally recognized, possesses offshore natural gas fields that could attract significant foreign investment. Turkey, which does not recognize the Republic of Cyprus, has claimed most of its EEZ. It routinely sends naval patrols and even drilling ships to prevent Cyprus from conducting proper explorations of oil and gas fields. Turkey claims to be acting to protect the interests of the Turkish Republic of Northern Cyprus, which makes up the remaining third of the island and is only recognized by Turkey. Consequently, Turkey has been excluded from the EMGF. This diplomatic impasse makes it difficult to develop a healthy framework for energy cooperation in the region. Other zones of conflict, such as Israel and Lebanon, have also hindered exploration and development efforts in the region. Political solutions targeting the establishment of maritime boundaries and peace could stimulate energy cooperation and trade in the region.

Another important layer in the Turkey-Cyprus issue is Cyprus’s military development, which Turkey sees as a threat to peace and cooperation in the region. Ankara, who vows to defend the interests of Turkish Cypriots, has many times called for a two-state solution on the island, but Cyprus insists that any push for such an idea will only block Turkey’s EU candidacy, which has been stalling for years now. Cyprus has been making deals with several countries to strengthen its military capacity. One of those countries constitute a direct rival for Turkey in the Eastern Mediterranean, Israel.

It is appropriate to spend some time looking at the tensions between Turkey and Israel, and how they could affect trade in the Eastern Mediterranean. In the wake of the war in Gaza, Israel has dealt significant blows to Hezbollah and Iran, leaving Turkey as the last great potential rival in the region. Recent escalations between the two countries have led to concerns about security in the Eastern Mediterranean. For Turkey, the human catastrophe in Gaza can be analyzed on two layers. First, the public anger generated by the horrors witnessed in the Gaza strip has resulted in significant pressure on the government to react. Second, Ankara sees in Israel’s operations in Syria, Iran and Qatar a state that is not bound by the rules of diplomacy, which could cause further friction. Nonetheless, an irreversible escalation remains unlikely at the moment. Turkey, despite being a NATO member, remains skeptical of the alliance’s willingness to invoke Article 5 to come to its aid in case of an open armed conflict against Israel, as it has refused to do so on many occasions in the past. Turkey, while possessing a strong army of which Israel remains cautious, knows very well that it is at a disadvantage compared to Israel when it comes to its air force and aging fleet.

Despite the little potential of a direct clash between Turkey and Israel, their divergent interests could significantly impact the energy sector in the Eastern Mediterranean. The case of Syria is especially pertinent. Turkey sees in Syria an opportunity to stimulate its construction sector by helping to rebuild the country following years of devastating civil war. Additionally, the Turkey-Qatar gas pipeline, recently brough back to life with the fall of the Assad regime, is projected to pass through Syria and could supply Turkey with much needed gas, in addition to providing Europe with critical energy as well. For Israel, which also wishes to become an important energy supplier for Europe, such a project could undermine the proposed India-Middle East – Europe Economic corridor (IMEC). Its belligerent behavior could also hurt its image as a reliable partner. Being excluded from a potential regional corridor for the benefit of Turkey would be a huge blow to Jerusalem.

Another aspect critical to Turkey’s energy policy is the move towards decarbonization. Central to Ankara’s plan to become a regional gas hub is the export of hydrocarbons to Europe, which is eager to acquire non-Russian energy as a result of the sanctions imposed on Russia. Because it has been accused by Europe of bypassing those sanctions and re-selling Russian gas, Turkey has an interest in making deals with Syria, Qatar and all its other potential partners to pose as an alternative to Russian gas for Europe. However, that plan is viable for the short term only. As Europe is slowly transitioning towards cleaner sources of energy, it is important for Turkey to increase investment in green energy to continue being a reliable partner for Europe; and as Europe already has long established energy supply lines with countries like Algeria, green energy is – or must be – a priority for Turkey. Unfortunately, Turkey remains highly dependent on hydrocarbons, as they make up about 84% of its energy supply. Green energy investments have been limited, and it is unlikely to meet its commitment to net zero emission of greenhouse gases target by 2053. Green energy is critical for Turkey, as it could help it break away from Russian gas and establish durable partnerships with European countries. The dream of becoming a regional gas hub might not be as relevant in a decarbonized world.

In conclusion, the Turkish state has great geopolitical ambitions guiding its energy policy. But if it cannot solve political disputes with some of its neighbors and define clear and uncontested Exclusive Economic Zones, energy cooperation fueling peace and stability in the

region will remain out of reach. Additionally, Ankara must apply greater focus on the matter of decarbonization, which could significantly alter the energy sector in the future. If it cannot brand itself as an unavoidable partner in world that has transitioned away from hydrocarbons, Turkey will not be able to be a hub of any kind of energy.