Turkey A Major Crude Oil Exporter and Major Oil Player in the Mediterranean

Turkey’s crude oil exports have been a major contributing factor in the country becoming a major player in the Mediterranean, despite the absence of its own reserves. In its latest weekly report, shipbroker Banchero Costa said that “2023 so far has been another positive period for crude oil trade, despite the high oil prices and risks of economic recession. In Jan-Aug 2023, global crude oil loadings went up +7.0% y-o-y to 1,440.7 mln tonnes, excluding all cabotage trade, according to vessels tracking data from Refinitiv. This was well above the 1,346.5 mln tonnes in Jan-Aug 2022 and the 1,240.3 mln t of Jan-Aug 2021, but also slightly above the 1,397.3 mln tonnes in the same period of 2019. Exports from the Arabian Gulf were up +0.4% y-o-y to 581.0 mln t in JanAug 2023, and accounted for 40.3% of global seaborne crude oil trade. Exports from Russia have also increased by +4.7% y-o-y to 154.8 mln tonnes, or 10.7% of global trade. Shipments from the USA surged by +19.9% y-o-y to 126.4 mln tonnes. From West Africa, exports increased by +0.5% y-o-y to 115.5 mln t. In terms of demand, seaborne imports into China increased by +23.0% y-o-y to 341.0 mln t in JanAug 2023, 23.6% of global trade”.

According to Banchero Costa, “Turkey is one of the largest exporters of crude oil outside the Arabian Gulf, and a major player in the Mediterranean oil market. This is so despite the fact that Turkey does not have any significant domestic oil reserves. Instead, it is a major export outlet for crude from Azerbaijan and from Northern Iraq. The majority of crude shipped from Turkey is Azeri BTC grade, sourced from the Baku-Tbilisi-Ceyhan pipeline. This is a 1768 kilometres long crude oil pipeline connecting the AzeriChirag-Gunashli oil field in the Caspian Sea to the Mediterranean Sea Coast. Most of the rest of Turkish exports is Kirkuk grade oil from Northern Iraq. Kirkuk oil is sourced from the 970 kilometres long Kirkuk-Ceyhan Oil Pipeline, also known as the IraqTurkey Crude Oil Pipeline. Essentially all Turkish crude oil exports are loaded at the Ceyhan terminal. About 28% of volumes loaded in Jan-Aug 2023 was carried in Suezmaxes, and about 70% was loaded on Aframaxes. Of the 48.5 mln tonnes of crude oil shipped from Ceyhan in 2022, 29 mln tonnes arrived by pipeline from Azerbaijan, and 19 mln tonnes were from Kurdish areas in Northern Iraq”.

The shipbroker added that “in the 12 months of 2022, Turkish seaborne crude oil exports surged by +11.6% y-o-y to 48.5 mln tonnes, excluding cabotage, just below the 49.5 mln tonnes of 2019. In Jan-Aug 2023, however, exports from Ceyhan declined by -24.3% y-oy to 23.9 mln t, down from 31.5 mln t in the same period of last year. Turkey stopped oil flows through the pipeline from northern Iraq on the 25th of March. Officially, Turkey began maintenance work on the pipeline, which, according to Turkish officials, passes through a seismically active area and was damaged by floods. The closure occurred soon after the International Chamber of Commerce (ICC) ordered Ankara to pay Baghdad $1.5 billion in compensation for damages caused by the Kurdistan Regional Government’s (KRG) export of oil without permission from the federal government in Baghdad between 2014 and 2018”.

“The Association of the Petroleum Industry of Kurdistan (APIKUR) said at the end of August that the closure of the pipeline to Ceyhan has cost producers and the Iraqi government about $4 billion. The Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, has now announced in September 2023 that the inspection of the oil pipeline between Iraq and Turkey has been completed, and the pipeline will be technically ready for operation “soon”. In terms of destinations for crude shipments from Turkey, the EU27 is by far the top one, accounting for 70.8% of crude oil volumes exported from Türkiye in Jan-Aug 2023. In Jan-Aug 2023, Turkey shipped 16.9 mln t to the EU27, which represented a -25.4% y-o-y decline from the record 22.6 mln t of JanAug 2022”, Bachero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide