Half-empty pipelines and a swelling bill keep Türkiye in Riyadh

Aerial view of the Tüpraş refinery on the Gulf of İzmit, with its storage tanks and jetties — Tüpraş's İzmit refinery, which processes imported crude, Kocaeli (August 2025) — representative archive photoPhoto: Zafer / Wikimedia Commons · CC BY 4.0 · resized · Source

Why it matters

Noise: Türkiye is building a giant energy corridor with the Gulf. The four-country power link has no cost, capacity or timetable. Signal: price, not volume, is driving Türkiye's energy bill. In August crude imports fell 1.1% while the energy bill rose 33.8% to 6.46 billion dollars. The Iraq–Türkiye pipeline runs far below its 1.5 million barrels a day of capacity, and Bayraktar says gas supply is getting harder to secure. Ankara's only quick lever is to offer the Gulf security and construction in return for supply and contracts.

Implications

The energy import bill rose 33.8% in August to 6.464 billion dollars, while crude imports fell 1.1% to 2.84 million tonnes; the increase came from price.
Brent futures settled 2.48% higher at 106.12 dollars on 12 October; Riyadh airport was struck 4 times in a week and stays closed until 17 October.
Net reserves excluding swaps fell to 37.9 billion dollars in the week to 2 October; the CBRT meets on 22 October with the policy rate at 37%.

Noise

Türkiye is building a giant energy corridor with the Gulf

Signal

Price, not volume, is driving the energy bill

Signal vs Noise ›

Map: Half-empty pipelines and a swelling bill keep Türkiye in Riyadh

The noise is the corridor, the signal is the bill

Speaking at the 25th WPC Energy Congress in Riyadh on 12 October, Energy Minister Bayraktar said Saudi Arabia, Jordan, Syria and Türkiye were discussing a giant electricity interconnection. The statement, reported by Daily Sabah, carried no cost, capacity or timetable. According to AA, the concrete basis for cooperation is a 5,000-megawatt renewable energy agreement signed this year. The headlines read it as a new energy corridor. On the record, it is a statement of intent.

The signal sits in a different number. TurkStat data carried by AA on 30 September show the energy import bill rose 33.8% year on year in August, to 6.464 billion dollars. In the same month crude imports fell 1.1% to 2.84 million tonnes. Türkiye is buying less crude and paying more for it, which means price is driving the bill. Ankara does not set that price. The security situation in the Gulf does.

Constraint 1 · The overland pipes exist, but they run near empty

In Riyadh, Bayraktar said the Iraq–Türkiye pipeline's capacity of 1.5 million barrels a day needs to be filled, adding that extra gas is being sought for spare capacity on TANAP. The National reported on 1 August that flows to Ceyhan were about 200,000 barrels a day. That figure dates from early August, and a current equivalent could not be verified. A new annual agreement envisages capacity of 750,000 barrels a day.

The bottleneck is not the pipe but the wellhead. Iraq's output fell from 4.3 million barrels a day to 1.4 million in May after the Strait of Hormuz was effectively closed. Bayraktar also says gas supply is becoming harder to secure under current market conditions. Türkiye's overland pipelines give it routing flexibility. With Hormuz shut, however, finding molecules to fill them is expensive.

Constraint 2 · Gulf supply is priced with a security risk

According to MarineLink, Riyadh airport was targeted 4 times in a single week. The deadliest strike killed 13 people and injured more than 300. The chief executives of ExxonMobil, TotalEnergies, Shell, Chevron and BP dropped out of the congress programme. Opening the event, Saudi Energy Minister Abdulaziz bin Salman said that meeting in Riyadh did not mean the risk had passed.

Turkish companies, by contrast, are not pulling back. Halk TV reports that TAV remains in the tender for a sixth terminal worth about 4 billion dollars, with bids due at the end of December. Türkiye Today reports that Erdogan announced on 12 October that the Mecca Joint Defence Agreement would go to the Turkish parliament in the coming days. Ankara is building bargaining power in the Gulf through security commitments and construction capacity.

Constraint 3 · The buffer is thin

CBRT data reported by Dünya show net reserves excluding swaps fell by 2 billion dollars to 37.9 billion in the week to 2 October. Official reserve assets stand at 167.4 billion dollars. According to Trading Economics, the policy rate is 37% and the CBRT meets on 22 October. Brent rose from 100.20 dollars on 7 October to 106.12 dollars on 12 October.

That picture explains the Riyadh visit. Room to absorb a price shock with reserves is shrinking. What Ankara can do in the near term is tie itself to the Gulf through supply and contracts. The weak point is that this tie rests on the same Gulf security. Every new attack on Riyadh lifts both Brent and the risk premium on Turkish construction sites at once.

What comes next

Three indicators matter. The first is whether Riyadh airport reopens after 17 October and whether Saudi energy facilities face fresh attacks. The second is the gap between the energy bill and crude tonnage in the September trade data due at the end of October. The third is any announced flow figure on the Iraq–Türkiye pipeline that moves towards the 750,000 barrels a day target. If Brent climbs above 110 dollars and tonnage keeps falling, the energy case for Ankara's turn to the Gulf strengthens.

The development that would refute this reading is also clear. If Riyadh airport reopens on 17 October, two weeks pass without a new attack and Brent drops below 100 dollars, the energy case weakens. The visit would then revert to routine trade diplomacy. If flows on the Iraqi pipeline are announced at 750,000 barrels a day, Türkiye gains a route of its own to absorb the price shock. The weight of its dependence on the Gulf would then ease.

Probabilities

Scenarios

Scenario	Probability	Trigger	Market impact
H1A Gulf tie at a high price	55%	Houthi attacks on Saudi infrastructure continue, Brent holds in a 100–115 dollar band and the Mecca agreement reaches parliament in October.	Türkiye carries its energy bill through the price channel; construction and energy contracts with the Gulf gather pace, but supply costs do not fall.
H2Tension eases, prices retreat	30%	Riyadh airport reopens on 17 October, no new attack follows and Brent falls below 100 dollars.	Pressure from the energy bill eases and Gulf projects return to schedule; the CBRT gains room to cut rates.
H3Gulf supply is disrupted	15%	Attacks spread to Saudi energy facilities and exports are effectively disrupted.	Brent breaks above 115 dollars, and Türkiye's energy bill and reserve losses accelerate; Gulf projects are suspended.

Module A

Constraints Matrix

STRUCTURAL AVG 4.3 · TACTICAL AVG 2.0Structural constraints dominate: the outcome is set more by these limits than by the actors' preferences.

Hard structural constraintspersistent · beyond the actors' will

A price-driven bill · Türkiye
5/5
In August crude imports fell 1.1% while the energy bill rose 33.8% to 6.464 billion dollars; the bill is set by a price Türkiye does not control.
Empty overland pipelines
4/5
The Iraq–Türkiye pipeline carried about 200,000 barrels a day in early August against capacity of 1.5 million; Iraqi output had fallen to 1.4 million barrels a day in May.
A thin reserve buffer · Türkiye
4/5
Net reserves excluding swaps stood at 37.9 billion dollars in the week to 2 October; room to absorb a price shock with reserves is narrow.
Gulf security · Saudi Arabia
4/5
Riyadh airport was struck 4 times in a week and the deadliest attack killed 13 people; supply and contract ties rest on the same security environment.

Tactical frictiontemporary · eases over time

Parliamentary approval pending weeks
2/5
The Mecca Joint Defence Agreement has not yet gone to the Turkish parliament; Erdogan said on 12 October it would be submitted in the coming days.
Tender delays weeks
2/5
Riyadh airport is closed until 17 October, affecting about 700 flights a day; Limak said deadlines are frequently pushed back.
No timetable for the project months
2/5
No cost, capacity or timetable has been announced for the four-country power link; security on the Syrian section is uncertain.

Module B

Signal vs Noise

SIGNAL 67% · NOISE 33%

NOISE
Türkiye is building a giant energy corridor with the Gulf
Bayraktar said on 12 October that a four-country power link was under discussion, but no cost, capacity or timetable was announced.
Daily Sabah — Türkiye says in talks with Saudi Arabia, Jordan, Syria on mega power link
SIGNAL
Price, not volume, is driving the energy bill
In August crude imports fell 1.1% to 2.84 million tonnes, while the energy bill rose 33.8% to 6.464 billion dollars.
Data: Brent crude oil (futures) ›AA — Energy import bill rises 33.8% in August
SIGNAL
The overland bottleneck lies at the source
The Iraq–Türkiye pipeline carried about 200,000 barrels a day in early August; Iraqi output had dropped from 4.3 to 1.4 million barrels a day.
The National — Iraq to sign extension of pipeline deal with Turkey
SIGNAL
The oil majors stayed away from Riyadh
The chief executives of ExxonMobil, TotalEnergies, Shell, Chevron and BP were absent from the 12 October programme; the airport was struck 4 times in a week.
Data: Brent crude oil (futures) ›MarineLink — Riyadh Attacks Disrupt Oil Majors' Summit Plans
NOISE
Turkish companies are ignoring the Houthi risk
TAV will bid at the end of December, but Limak said the process has slowed and deadlines are often pushed back, so the risk is being priced into the timetable.
Halk TV — Turkish firms compete for the airport struck in Saudi Arabia
SIGNAL
The reserve buffer is thinning
Net reserves excluding swaps fell by 2 billion dollars to 37.9 billion dollars in the week to 2 October.
Dünya — CBRT data: reserves fall by about 4 billion dollars

Module C

Asset-Class and Positioning Implications

Asset class	Exposure	Transmission channel	H1	H2	H3	Expected	Conviction	Horizon	What to watch
Commodities	Front end of the crude oil curve	Attacks on Gulf infrastructure entrenching the risk premium	+	−−	++	+0.25	●●●	0–3 months	The 110-dollar threshold in Brent futures and any new attack on Saudi energy facilities
FX	Lira — energy-driven demand for foreign currency	The burden on the current account from an energy bill swollen by price	−	+	−−	−0.55	●●●	0–3 months	TurkStat September energy imports and CBRT weekly reserve data
Sovereign debt	Turkish dollar-denominated sovereign debt	A thinning reserve buffer and the CBRT postponing rate cuts	−	+	−−	−0.55	●●●	3–12 months	Türkiye five-year CDS and the 22 October MPC decision
Freight & insurance	War-risk cover for Gulf-origin tankers	Attacks on Saudi infrastructure feeding through to insurance premiums	+	−	++	+0.55	●●●	0–3 months	Red Sea and Gulf war-risk premiums
Equities	Turkish construction and contracting firms active in the Gulf	The timetable of Saudi infrastructure tenders and site security	+	+	−−	+0.55	●●●	12+ months	The December timetable for the Riyadh sixth-terminal tender

Second-order effects

And then what?

Starting point

Riyadh airport was struck 4 times in a week, oil-major executives stayed away from the congress and Brent futures rose to 106.12 dollars on 12 October.

1
Freight and insurancewithin days
While attacks on Gulf energy and transport infrastructure continue, the risk premium in Brent becomes entrenched and war-risk cover for Gulf-origin cargoes grows more expensive.
Watch: Brent futures relative to the 110-dollar threshold and the status of Riyadh airport after 17 October
2
Trade balancewithin weeks
Even with lower tonnage, Türkiye's energy bill stays high through the price channel, and energy imports keep growing year on year in the September and October trade data.
Watch: Energy imports and crude tonnage in TurkStat's September foreign trade statistics
3
Reserves and monetary policywithin months
Pressure on the current account erodes net reserves excluding swaps; the CBRT delays rate cuts and Ankara accelerates supply and contract ties with the Gulf.
Watch: CBRT weekly reserve data and the 22 October MPC decision

What breaks the chain

If Houthi attacks stop and passage through the Strait of Hormuz reopens, the risk premium in Brent falls. If flows on the Iraq–Türkiye pipeline reach 750,000 barrels a day, Türkiye partly absorbs the price shock through its own route and the chain breaks at the first step.

Triggers

Thresholds to watch

Indicator	Threshold	Today	What it means
Brent crude oil (futures)	> 110	106.12	A move from 106.12 dollars on 12 October to above 110 dollars would signal that the energy bill, up 33.8% in August, stays high through September and October and that pressure on the reserve buffer persists.

Sources

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