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OPEC+ Can Stop An Oil Rally To $100

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The OPEC+ group could influence…

Cyril Widdershoven

Cyril Widdershoven

Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently he works as a Senior Researcher at Hill Tower Resource Advisors. Next…

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A Geopolitical Time Bomb In Europe


In a week when several major oil and gas reports were released, most notably the IEA World Energy Outlook 2020 and OPEC’s World Oil Outlook, a regional conflict is now on the brink of spiraling out of control. The toxic combination of a military confrontation between Azerbaijan and Armenia, supported by Turkey and Russia respectively, and the confrontational stance that Ankara is taking in the East Med conflict are threatening to upend European energy supplies. After a short lull in Turkey’s aggressive East Med posturing, partly due to European and U.S. efforts to de-escalate the situation, the Armenia-Azerbaijan conflict has reignited tensions across Europe. In the same week that the Trans Anatolia Pipeline (TAP) project opened its valves to supply Azerbaijani gas to Southern Europe, Azerbaijan accused Armenia of targetting Azerbaijani oil and gas infrastructure with missiles. Azerbaijan’s answer has been a full-scale military operation against Armenian forces, which could lead to Russian intervention in the coming days. At the same time, Turkey’s support for Azerbaijan could lead to a significant military build-up on the other side of the conflict.

Turkey’s regional aggression, however, is not confined to the Caucasus. In recent days, after showing some leniency in its regional confrontation with Greece, Cyprus, Egypt, and Israel, pulling back some of its vessels from the East Med, Ankara has returned to the area. Ankara’s decision to resume offshore seismic operations in disputed eastern Mediterranean waters has not only sparked harsh reactions from Athens, Brussels, and Washington, but it has the potential to cause a direct military confrontation. Erdogan has always tried his best not to openly threaten Greece, Cyprus, and others, but that seems to be changing. The Turkish seismic vessel Oruc Reis, accompanied by Turkish frigates, has started its operations next to the Greek island of Kastellorizo, which is two miles off the Turkish coast. Erdogan’s move is a clear slap in the face for the EU, NATO, and Washington. In reaction to growing criticism, especially from European countries, such as France, Germany, and Greece, supported by Washington, Erdogan stated that Greece and Cyprus are the main reason for his aggressive moves. Erdogan has accused Athens and Nicosia of failing to keep to the commitments made during earlier negotiations. In an unprecedented affront to the European Union and Greece, he said ‘we will continue to give Greece and the Greek Cypriot administration — who fail to keep their promises at the EU and NATO platforms — the answer they deserve on the ground”. Erdogan’s reversal of policy has not only put possible negotiations on ice but could now lead to an unwanted confrontation in the East Med. Greece, already supported by European countries, has openly stated that Ankara is undermining any efforts to create and maintain a dialogue. Germany’s position also seems to have changed dramatically. After months of being accused by Athens, Nicosia and others, of only listening to Ankara’s wishes and threats, German Foreign Minister Heiko Maas openly and harshly condemned the decision of Ankara while speaking in Athens. Germany’s position is pivotal in the EU strategy towards Turkey. Erdogan should quickly reassess his options, as the German minister even canceled his planned visit to Ankara this week.

Ankara has been playing with fire lately, and Erdogan has turned multiple nations against him with his unilateral actions on the border. By openly challenging the EU, and indirectly NATO, Erdogan is playing a risky game. The Turkish Blue Homeland strategy, which is currently being employed, is driving former enemies to work together on an unprecedented scale, all in a move to quell Turkish threats. Ankara’s widely published maritime delineation agreement with Libya has backfired in a major way. Not only have Israel and Egypt now signed maritime agreements with Greece and Cyprus, but even Lebanon and Israel are now openly discussing their own maritime borders.

Related: The Secret Behind America’s Most Valuable Energy Play

Erdogan’s current military adventures can only be understood in the light of internal pressure, political instability, and a Turkish economic crisis of unknown order. By refocusing fears and anger from internal crises on outside dangers, Erdogan is able to maintain domestic support. Some see Turkey’s East Med aggressiveness as a bold statement by Erdogan that he doesn’t fear EU sanctions or he doesn’t even think they are a possibility. In the coming days, this picture could change, however. During the October 15-16 EU Summit, Greece and Cyprus will be sure to address Turkey’s latest moves and possibly ask for a united European reaction and implementation of sanctions, as have already been threatened. As a sign of his little he seems to fear EU sanctions, Erdogan has opened the beaches of Varosha, an abandoned Greek town in occupied Turkish Cyprus. This was likely done as a signal from Erdogan that he will not comply with the more pro-European Turkish Cypriot president of the TRNC.

The coming days will be crucial for Turkey and the region. A widened regional conflict in the Caucasus could close the main oil and gas arteries bringing Azerbaijani and Central Asian energy resources to Europe. At the same time, a Turkish-Greek confrontation would put existing Southern European oil and gas projects at risk. Offshore naval confrontations are unlikely to be confined to the specific parties involved but threaten maritime trade flows (including the Black Sea and Caspian oil and gas transports). A possible new hotspot could be the open up around the Bosphorus, as Russian and Egyptian naval forces are planning to hold a major military exercise in the Black Sea area in the coming weeks. When this takes place, Egyptian naval forces will have to pass through the Turkish Bosphorus waters of Istanbul. In light of ongoing threats, this has the potential to spark a serious conflict in the region.

By Cyril Widdershoven for Oilprice.com

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  • Mamdouh Salameh on October 18 2020 said:
    Circumstantial evidence suggests that Turkey’s current display of its military muscle in the Eastern Mediterranean and the Caucasus is motivated by two major factors. The first is internal pressure triggered by an economic crisis facing the country. The second is dream of reviving Turkey’s strategic influence in the Eastern Mediterranean and the former Soviet republics with ethnic affinity with Turkey as was the case under the Ottoman Empire. This is rooted in Turkey’s new regional foreign and security policy, the “Blue Homeland” Doctrine”.

    And despite Turkey’s muscular approach, one could only note a deafening silence from the United States. The US Sixth Fleet in the Mediterranean could easily force Turkish Navy frigates escorting exploration ships out of the Greek and Cypriot Cyprus exclusive economic zones (EEZs) but there was no such move by the United States. It seems that the United States is adopting the stance that as long as Turkey isn’t interfering in or threatening Israel’s gas operations in the Eastern Mediterranean, it won’t intervene. This raises question marks as to whether the United States and Turkey are in cahoots for the purpose of settling accounts with Russia over Syria and the Azerbaijan–Armenia war.

    Turkey may have some designs over Syrian territory close to its borders particularly near Adlib in northern Syria. Syria with support from Russia will defend its territorial integrity. The United States, on the other hand, can’t tolerate Russia’s and Iran’s presence in Syria.

    Syria is the heart of the Arab world. It is of paramount importance strategically and geographically. Furthermore, it is the most important oil and gas route to Europe connecting the Arab Gulf and Iran to Turkey and Europe. Whoever controls Syria, controls these routes.

    The recent escalation between Armenia and Azerbaijan over the disputed region of Nagorno-Karabakh could threaten Azerbaijan’s oil and gas infrastructure and two major oil and gas pipelines that traverse the border region: one is the Baku–Tbilisi–Ceyhan (BTC) oil pipeline which delivers some 640,000 b/d of Azerbaijani crude oil to the EU and the second is the South Caucasus gas pipeline (SCP) which along with the TANAP and TAP pipelines will eventually deliver 16 bcm annually to Turkey and the EU.

    These pipelines are important to Turkey economically and also for its ambitions to be the energy hub of the European Union (EU). They, however, compete with Russia’s energy dominance in the EU. The United States has been working diligently to undermine Russia’s energy dominance in the EU as manifested by its dogged attempts to prevent the completion of the Nord Stream 2 gas pipeline.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Eric Bukharov on October 18 2020 said:
    I prefer to assume Dr. Widdershoven is ignorant of the many facts about the region, the events and the history. Some key information given in the article is apparently wrong, misleading and the analysis made thereupon is more than wrong.

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