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As military conflict escalates between Israel and Iran, growing concerns about potential disruption in the Strait of Hormuz have prompted global economic unease, posing direct risks to Türkiye’s energy-dependent economy.
Following a series of Israeli airstrikes on Friday targeting Iranian military and nuclear sites, Iranian armed forces announced that no vessels would be allowed to pass through the Strait until further notice. Although shipping trackers did not show a major change in commercial traffic by June 14, the threat of a prolonged closure continues to rattle energy markets.
The Strait of Hormuz, a narrow maritime passage linking the Persian Gulf with the Gulf of Oman and the Arabian Sea, remains one of the world’s most critical energy transit routes. Roughly one-third of the global oil trade passes through this corridor, which also carries nearly 20% of global liquefied natural gas (LNG), including Qatar’s entire LNG output.
While the International Energy Agency has stated that current oil supplies remain adequate, financial markets have already reacted to perceived threats. Prices have begun to rise on fears that Iranian retaliation or further escalation could severely disrupt the Strait’s capacity.
Türkiye, which depends heavily on imported energy, remains highly exposed to price shocks in the oil and natural gas markets. Since the onset of Israeli airstrikes, both oil and gas futures have surged by nearly 15%, with Brent crude climbing above $74.2, WTI reaching $72.9 per barrel, and Dutch TTF natural gas rising to $37.8 per megawatt-hour.
U.S.-based investment bank JPMorgan has warned that a prolonged disruption in the Strait of Hormuz could push oil prices as high as $120–$130 per barrel.
Global energy prices had been in decline amid mounting concerns over a potential global recession triggered by escalating trade tensions between the U.S. and China.
These fears were fueled by former President Donald Trump’s protectionist policies, which introduced reciprocal tariffs against all major trading partners to reduce the U.S. trade deficit. When those tariff threats sparked a broad market selloff in April, oil prices fell to their lowest level since 2021, dropping below $60 per barrel. Adding to the downward pressure, the OPEC+8 group also announced plans to increase oil production by 411,000 barrels per day in July.
Against this backdrop, Türkiye’s Finance Minister Mehmet Sİmsek has repeatedly stated that falling energy prices present an opportunity to reduce the country’s current account deficit. In March, Türkiye posted a $4.1 billion deficit, while the current account excluding gold and energy recorded a surplus of $1.47 billion.
Besides the price shocks, Türkiye is also a major importer of natural gas from Iran, which accounted for 10% of its total natural gas imports in March, totaling 561 million standard cubic meters (19.81 billion standard cubic feet), marking a 126% increase year-on-year. This level of energy imports also reflects the depth of Türkiye’s bilateral trade with Iran, with total trade volume exceeding $14 billion in 2024.
Speaking to the Anadolu Agency, Professor Aykut Lenger from Ege University stated that “the threat alone has already influenced market behavior,” as investors took early positions anticipating supply constraints. According to Lenger, any confirmed closure would inevitably tighten global supply and intensify price increases.
Despite fears of disruption, analysts suggest that the ongoing conflict will have only a limited direct impact on global natural gas flows—unless the situation worsens dramatically.
On the other hand, Tamas Pletser, oil and gas analyst at Erste Investment, pointed out that Iran, while a major oil producer, plays a less dominant role in natural gas markets. “Iran currently produces a little over 3 million barrels of crude oil per day,” he said. “The actual impact depends on how long the conflict lasts and whether the U.S. reinstates sanctions or Iran attempts to shut or restrict passage through the Strait.”
Pletser expressed skepticism that Iran would escalate to that level, explaining that doing so would not align with Iran’s broader strategic interests. However, he cautioned that if Iran were to interfere with LNG shipments—especially those from Qatar—it could push up global gas prices.
Francesco Sassi of RIE Energy Geopolitics and Markets Research echoed these views, suggesting that broader effects would likely arise only if the conflict spills over into other regional producers such as Iraq or disrupts supply routes involving Israel or Qatar.
Speaking to business-focused patronlardunyasi.com, economist Guldem Atabay emphasized that such price hikes would likely stoke inflationary pressures in Türkiye and suppress economic growth. Atabay argued that in such a scenario, the Central Bank of the Republic of Türkiye (CBRT) might be forced to postpone any planned interest rate cuts and instead resort to selling its already limited foreign reserves to stabilize markets.
The Turkish central bank conducted its two largest one-week repo auctions since July 2023 this week, each totaling nearly ₺100 billion ($2.53 billion).
The move fueled a rally in Borsa Istanbul’s banking index, which continued until Israel's airstrikes on Iran disrupted market sentiment, as expectations for an interest rate cut had gained momentum. The central bank had previously limited repo auctions and primarily relied on the overnight lending rate of 49% as its main funding tool, making this shift appear to be a liquidity injection aimed at preparing the market for a potential rate cut.
“This kind of geopolitical shock should be precisely the reason why reserve buffers are maintained,” Atabay noted, adding that reserves should not be depleted for short-term goals.
Beyond energy costs, Türkiye could also suffer from declining tourism revenues if the regional conflict deepens. Atabay warned that escalating instability in the Middle East may prompt a drop in tourist arrivals, particularly from Europe and the Gulf, who may view the broader region as unsafe.
The long-term implications for Türkiye will depend largely on whether the conflict widens, particularly if Iran chooses to maintain or escalate its blockade of the Strait of Hormuz. While maritime traffic data shows no significant drop in vessel movement for now, markets remain on edge.
As of June 14, nearly 2,000 commercial ships and 116 tankers were navigating the Strait, according to tracking platform MarineTraffic.
However, any prolonged military escalation or miscalculation could quickly alter the situation, potentially exposing Türkiye to another external shock, just as signs of economic stabilization have begun to emerge.
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