TASAM Policy Brief | March 2025
Prepared by: Chiara Luong-Thanh
Executive Summary
Türkiye seeks to transform from an energy transit country into a regional hub linking Asian producers and European consumers. This brief assesses the current state of Turkey’s energy diplomacy and identifies four strategic priorities: accelerating market liberalization, expanding infrastructure, diversifying suppliers, and preparing for the energy transition.
Background
Türkiye imports over 98% of its natural gas, primarily from Russia (42%), Azerbaijan (20%), and LNG markets (27%). Its geographic position between Caspian and Middle Eastern energy basins and the European market provides a structural advantage for transit and hub development. Key infrastructure includes TANAP, TurkStream, and BTC, which collectively move significant volumes of oil and gas through Turkish territory.
However, Türkiye’s hub ambitions face constraints: BOTAŞ dominance limits market competition, internal infrastructure bottlenecks restrict gas flows, regional instability threatens project security, and global LNG expansion erodes the pipeline transit advantage.
Key Findings
1. Market structure matters as much as geography. Türkiye cannot function as a true hub without liquid markets, transparent pricing, and third-party access to infrastructure.
2. Supplier diversification remains incomplete. Despite progress with Azerbaijan, Türkiye remains heavily dependent on Russian gas and vulnerable to supply disruptions.
3. Regional instability is a persistent risk. Conflicts in the Caucasus, Middle East, and Eastern Mediterranean directly affect energy infrastructure security and project viability.
4. The energy transition creates new imperatives. EU decarbonization policies will reduce long-term gas demand; Türkiye must position for hydrogen and renewable energy integration.
Policy Recommendations
The following recommendations summarize the most urgent policy priorities for strengthening Türkiye’s energy hub potential.
Market Liberalization: Revise Natural Gas Market Law; establish an independent transmission system operator (2025 –2027)
Infrastructure Expansion: Increase storage to 10 BCM; expand east-west transmission capacity (2025 –2030)
Supplier Diversification: Advance Trans-Caspian negotiations; maintain dialogue with Iran (Ongoing)
Energy Transition: Develop a hydrogen strategy; engage the EU on carbon adjustment mechanisms (2025 –2035)
Conclusion
Türkiye possesses the geographic and infrastructural foundation for a significant regional energy role. Realizing this potential requires coordinated domestic reforms and effective diplomatic engagement across multiple fronts. The current moment, marked by European urgency to diversify from Russian gas and ongoing Caspian development, presents a window of opportunity that effective policy could capture.