Commentary, Politics

Will US sanctions affect the TurkStream project?

Turkey will become an indispensable country between energy supplying and demanding countries. This must be one of the reasons for the anti-Turkey attitude of the EU countries in the recent period.
4 min read

As energy battles in the world are escalate, the struggle of the countries party to this battle to have a share in the market will also increase. One of these countries is the U.S., which has been an energy importer for years. Having made a serious move in the world’s natural gas market with its shale gas production in recent years, the U.S. is now an energy exporting country. So, the U.S. will say “Count me in for the power struggle for energy.”

The U.S. faces some disadvantages as an energy producing country. The most important one is its geographical distance. The U.S., unable to build a pipeline to export its newly discovered natural gas, has to export liquefied natural gas (LNG). The target market for LNG exports is the EU countries.

It is an important opportunity for the U.S. that European countries reduce their dependence on Russian natural gas and seek alternative resources and new markets. On the other hand, it is inevitable for the U.S., which has become an exporter, to turn toward the EU market because of its high potential.

But, Qatar, the world’s largest LNG exporter, and Russia, which carries natural gas through pipelines, are among the alternatives that the U.S. wants to export natural gas to. The main reason for the U.S.’s attitude on the Qatar crisis and the sanctions it is imposing to reduce Russia’s influence is the desire to be present and even occupy most of these markets.

US, with its sanctions, wants to have share of natural gas

With the sanctions, the U.S. will find the opportunity to expand the maneuvering area that will consolidate its position as an energy exporting country. It will be an important player in the EU market with LNG exports. Of course, this is not just an energy battle.

The U.S., which seeks to gain energy power in the EU market, will in this way reduce EU countries’ energy dependency on Russia, and deprive the country of its energy card, and use the energy dependence of the EU countries in its own favor.

This is confirmed by Russian Energy Minister Alexander Novak who made the following remark at a meeting in Izmir: “I think the U.S. has introduced new sanctions against Russia to gain an advantage in the European natural gas market.”

Moreover, the sanctions are being carried out in many ways. European companies, which finance the Nord Stream-2 pipeline project where Germany will be the key country and that will increase Russian natural gas exports to Europe, have also been affected by sanctions.

Now that debates about the TurkStream project have started, the U.S. aims to expand the radius of the sanctions.

Turkey’s Defense Industry grows steadily

Will the TurkStream project be affected?

The TurkStream natural gas pipeline is an important project for us. Russia will carry natural gas to the EU countries through the two lines of TurkSteam via Turkey. On the one hand, Russia will export its natural gas, and on the other, Turkey will both ensure energy security and strengthen its strategic position between the countries that supply and demand energy, especially the EU countries.

This has a clear meaning: Turkey will become an indispensable country between energy supplying and demanding countries. This must be one of the reasons for the anti-Turkey attitude of the EU countries in the recent period. They will not be able to easily accept the fact that they are in need of Turkey in the energy sector, while they, for years, considered it as a country that was in need of them.

U.S. sanctions could increase the financing costs of both the Nord Stream-2 and the TurkStream project. However, even if the cost of the projects increases, Russia will endure it for the sake of natural gas export, which is the backbone of the Russian economy. This is because, only in this way, Russia can resist the energy challenge, especially the one from the U.S.

Novak said, “We anticipate no risks in the future of the TurkStream project which will be constructed on schedule as long as the parties remain interested,” indicating that Russia will not step back in energy.

Russia has responded to this challenge with a decision to accelerate the construction of two projects that it considers to be vital for its economy. In this way, the TurkStream project will be completed before risks stemming from the undertaker companies rise. The moves by the U.S., which has entered the energy market rather aggressively and eyes opportunities in the EU market, will continue.

All these energy moves among the U.S., EU countries and Russia actually portray a power struggle.

Those who want Turkey, which has a strategic importance due to its geographical position and, also, its political and economic structure, to withdraw from the energy area, obviously aim to prevent the country from holding the power that will be obtained from energy.

Source: Yeni Safak

Related Articles

mm
Erdal Tanas Karagöl received his M.A from the University of Connecticut and his PhD from York University. Karagöl is a professor at Ankara Yildirim Beyazit University and provides undergraduate and graduate level courses on energy economics, energy security and macroeconomic policy. Currently E. T. Karagöl is the Director of the Energy Studies Department at the SETA Foundation.