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The Tragedy Struck in Turkey Raises Concern Over Global Crude Oil Supplies
The Tragedy Struck in Turkey Raises Concern Over Global Crude Oil Supplies

The Tragedy Struck in Turkey Raises Concern Over Global Crude Oil Supplies

  • 10-Feb-2023 1:39 PM
  • Journalist: Patrick Knight

Crude Oil shipments and prices have been impacted globally by the two earthquakes in Turkey's eastern region. As a precaution, Turkey has already stopped the supply of Crude Oil to the Ceyhan export terminal on the Mediterranean coast. BOTAS, the state's pipeline operator, made this choice shortly after the initial earthquake.

On Monday of this week, Crude Oil prices immediately increased due to the Ceyhan oil flow halt. The Ceyhan port on the Ceyhan River, which flows past the city's location in the Cukrovaplain, receives Oil and natural gas from the Middle East and Central Asia. In January, the port handled more than 1 million barrels per day or 1% of global supplies. So the suspension of the port is the leading reason behind the current Crude Oil price hike.

Following the closure of Turkey's main export terminal, supply shortfall worries have increased. However, there is growing confidence that China will meet the world's expanding oil demand. The International Energy Agency (IEA) estimates that China will provide half of the world's oil needs this year.

For the first time in six months, Saudi Arabia increased the price of its Crude Oil for customers in Asia as prospects for a revival in demand, particularly from China, rose. The Baku–Tbilisi–Ceyhan (BTC) terminal is anticipated to be closed, further contributing to the rise of Crude Oil costs. The closure of the Johan Sverdrup oilfield's 535,000 bpd Phase-1 part in Norway's portion of the North Sea further raised prices. The Azeri crude BTC terminal at Ceyhan was awaiting reopening while the Alfa Baltica and Nordlotus tankers waited nearby.

According to ChemAnalyst, Crude Oil prices in the global market are expected to rise, despite the flow and export of Crude Oil from Iraq having restarted. However, exports of Crude from Azerbaijan remain halted, and the Azeri BTC pipeline is still operational and delivering Crude Oil to Ceyhan for storage.

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