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(Bloomberg) Oil is flowing unhindered through Turkey’s pipelines and waterways, one of the world’s largest energy trading corridors, after a coup attempt against President Recep Tayyip Erdogan failed.
The Turkish straits are open to shipping traffic, an official at the Istanbul-based shipping center said by phone ON Saturday. Crude oil shipments from Azerbaijan and Iraq into Turkey’s Mediterranean port of Ceyhan are operating normally, a port agent said as BP Plc, operator of the Baku-Tifilisi-Ceyhan pipeline, confirmed the oil flow was uninterrupted.
“Our facilities in Turkey are open and operating normally,” BP spokesman David Nicholas said in an e-mail in response to questions. “There are no disruptions to the flow of oil through the BTC pipeline.”
At the crossroads of Europe and Asia, Turkey is a vital conduit of crude transport from Russia and Iraq to the Mediterranean Sea. Millions of barrels of oil travel through the nation’s waterways and pipelines each day. The country is also on the fringe of broader conflict in the Middle East, with Syria bordering Turkey’s southeastern edge. Oil futures rose as much as 1.9 percent on Friday after the coup began.
“Any uncertainty in that region almost invariably results in an increase in oil prices, particularly given the interaction between what goes on in Turkey with Syria,” Craig Pirrong, director of the Global Energy Management Institute at the University of Houston’s Bauer College of Business, said Friday in a phone interview. Analysts will be looking for whether there’s a “spillover to the major oil producers,” he said.
Crude oil futures rose above $46 a barrel in after-market trading in New York following the unrest, extending gains from a force majeure declared by Exxon Mobil Corp. on crude shipments from Nigeria.
David Goldwyn, a former State Department special envoy and coordinator for international energy affairs in the Obama administration, said it’s too early to assess the impact on energy transportation from the unrest in Turkey.
The coup attempt was foiled after hours of clashes that saw tanks blockading roads, soldiers fighting police and warplanes bombing the parliament in Ankara. Senior generals were among more than 2,800 military personnel arrested during raids on Saturday, after clashes that left almost 200 dead, including several dozen coup participants.
The Turkish Straits, including the Bosporus and Dardanelles, are one of the world’s major choke points for seaborne crude transit, with about 2.9 million barrels of oil a day passing through in 2013, the latest year of data available from the U.S. Energy Information Administration.
Turkey is home to pipelines that transport crude and condensate from nations including Iraq and Azerbaijan to Ceyhan, on the Mediterranean in southern Turkey. BP’s Baku-Tbilisi-Ceyhan pipeline exported 67 million barrels of crude, or about 740,000 a day, from the port in the first quarter, according to the British company.
At least 10 crude tankers were signaling Turkish ports at the time of the attempted coup, according to data compiled by Bloomberg. They included six Suezmax and two Aframax ships bound for Ceyhan and two Aframax ships destined for the Turkish Straits.
©2016 Bloomberg News
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