Azerbaijan increases gas supplies to Turkey

Azerbaijan will begin natural gas shipments to Turkey from today, as part of efforts to compensate for supply cuts from regional producer Iran.

Azeri national gas company SOCAR will supply 4 million cubic meters of natural gas per day throughout February. However, Iran is set to resume the flow of energy to Turkey in early February after a winter spike in domestic consumption forced export reduction. The disruption to Turkey’s natural gas supply is likely to have short-term economic impacts, particularly as demand outstrips supply during the winter months, hitting a record high of 290 million cubic meters last week.

In the long-term, expect a strengthened bilateral relationship between Azerbaijan and Turkey, which could see the former emerging as a regional alternative to Russia for energy dependence in Europe. Although the supply cuts from Iran are only temporary, the emergence of Azerbaijan as a supplementary energy supplier could lessen Western Europe’s reliance on Russian natural gas. This would undermine the critical leverage that Russia holds over Western Europe, as it currently supplies over 40% of the region’s consumption. But any significant increase in supply would require an expansion of Azerbaijan’s Southern Gas Corridor which bypasses Russia to bring gas to Europe from the Caspian Sea.