Turkey-Iran Energy Ties Outweigh Serious Differences Over Syria

BARCELONA, Spain – What was the message of Turkish Prime Minister Recep Tayyip Erdogan’s visit to Tehran last week?

It was this: Turkey is so determined to get the cheap oil and gas it needs to fuel its rise as a regional economic powerhouse that nothing will derail that goal, not even differences over Syria.

A report by Turkey’s Middle East Institute (MEI) released after Erdogan’s visit, and another by the Rand Corporation in the United States in September, both note that Iran and Turkey are pursuing a pragmatic foreign policy: Tehran needs a close, reliable market for its huge oil and gas reserves, and Turkey’s economic progress is tied to uninterrupted supplies of fuel.

“Iran is the second-largest supplier of natural gas to Turkey, behind Russia. Iran also provides close to 40 percent of Turkey’s imports for crude oil,” the Rand report says.

It notes that Ankara imports nearly 60 percent of its natural gas from Russia, and that Iran represents “one of the few alternatives available for reducing this dependence.”

“Turkey is an energy-hungry country and is planning to increase oil and gas imports from Tehran after the gradual lifting of sanctions,” says the MEI report, referring to the recent lifting of some economic sanctions against Iran following a deal with a US-led coalition over Tehran’s controversial nuclear program.

“Turkey uses a significant portion of its imported Iranian natural gas to generate electricity, and Iran is Turkey’s second-largest gas supplier, after Russia. Iran seeks a bigger share in Turkey’s energy market as well,” Gonul Tol, MEI’s Director of the Center for Turkish Studies, says in the report.

The Rand report, while noting that “Turkey and Iran tend to be rivals rather than close partners,” observes that “Turkish energy needs and Iran’s vast oil and natural gas resources have been an important driver of the increasing Turkish-Iranian cooperation.”

Access to cheap energy is so important to Ankara that, despite Western sanctions and the risks of investing in Iran, in November 2008 it began pursuing a deal to invest $5.5 billion to develop Iran’s offshore South Pars gas field, reportedly one of the biggest in the world.

“Interest in the agreement was rekindled during Erdogan’s visit to Tehran in October 2009, despite continued US objections,” the Rand report says. “Ankara argued that the deal was essential to meet its energy needs and that the agreement could help to bolster European energy security,” it notes.

The deal was finally shelved in July 2010, following US objections to the agreement, and after Tehran and Ankara failed to find common ground on the production and marketing of the gas.

Last week when Erdogan returned to Tehran, accompanying him were his ministers of economy and energy. Ankara has been reportedly demanding a discount from Iran on the price of natural gas, a request rekindled during  Erdogan’s visit.

The conflict in Syria -- important to Turkey because it is happening across its border and to Iran because Syria has for decades been Tehran’s staunchest Arab ally – was not the centerpiece of Erdogan’s visit.

By all accounts, the visit was a cordial one, filled with diplomatic niceties from both sides.

“The fact that Turkey and Iran have been backing opposing sides in the Syrian civil war has led to tensions in their relations, but neither country can afford a long-term fracture,” Tol noted in her report.

“Turkey recalibrated its Syria policy and is now more in tune with Iran,” she says. “Turkey and Iran see eye-to-eye regarding the end of the Syrian crisis, which has no military solution,” she adds.

Iran is not the only hurdle that Turkish leaders are determined to cross in pursuit of cheap and plentiful energy supplies.

Despite decades of hostility with its own large Kurdish minority, Ankara reversed its anti-Kurdish policy when last November it signed a comprehensive and controversial energy agreement with the autonomous Kurdistan Region in northern Iraq.

The deal, to import Kurdish oil through a pipeline extended by the Kurds to carry their own oil to the Turkish port of Ceyhan, upset both Baghdad and Washington.

“Ankara’s increasing energy cooperation with the Kurdistan Regional Government (KRG) has raised concerns in Washington and has put Ankara at odds with US policy,” the Rand report explains.

“The decision represents a significant reversal of previous Turkish policy, which had sought to prevent the KRG from obtaining direct control over the energy resources in the region, for fear that this would strengthen the KRG’s drive for the creation of an independent state,” the US study adds.

It warns that: “US officials should thus not expect Ankara automatically to fall in line with all US policy initiatives directed against Iran. Ankara will seek to retain a degree of flexibility regarding its policy toward Iran and may be hesitant to support some US initiatives if they are seen to conflict with broader Turkish national interests vis-à-vis Iran.”

Turkish Energy Minister Taner Yildiz spelled out his country’s policy as clearly as possible in an interview with Rudaw in December: “I would say frankly that Turkey will not sit idly about its nearby sources (of energy),” he declared.