Politics, Geopolitics & Conflict
Erdogan had campaigned on free natural gas for homes shortly after production began of first gas in mid-April (just a few weeks before elections that he would win in a run-off) from the Sakarya field. In its first phase, Turkish officials said the field would supply 10 MMcm per day, peaking at 40 MMcm by 2027-28. Turkey’s current natural gas consumption is at about 53 Bcm per year, and the country is energy starved, spending some $97 billion annually on imports. Erdogan appears to have made good on this promise, giving households free gas for the month of May. But July came with a new surprise that counteracts any ostensible benevolence: This week, Turkey hiked its fuel tax by 200% to finance earthquake damages. This move is likely to worsen inflation, which is already at 38% (annual).
Russia has turned its sites on the port region of Odesa, on the Black Sea, in days of strikes. The attack began on Monday after Moscow quit the Turkey-brokered deal to allow Ukrainian grain exports through the Black Sea, and after Ukraine blew up a bridge in Crimea that serves as a main artery for Russian military cargo. Moscow has threatened to target any vessels attempting to enter Ukraine’s Black Sea port, and would consider all such vessels to be potential carriers of weapons.
The U.S. Senate passed a defense bill amendment this week that would ban sales of crude oil from the SPR to China. Although largely more symbolic than…