By Ata Türkoğlu
Turkey, a major fossil fuel importer, will walk a fine line as Donald Trump’s return to the presidency sees the U.S. reviving its “energy dominance” policy—a policy widely anticipated to disrupt global energy dynamics.
Characterized by ramping up fossil fuel production and expanding energy exports, the restored agenda, now under the new Energy Secretary Chris Wright, a prominent figure in the petroleum industry, will double down on fossil fuels, reversing the Biden administration’s renewable energy priorities.
On his very first day, President Trump signed a series of executive orders declaring a “national energy emergency,” overturning Biden-era obstacles to oil and gas drilling, lifting restrictions on fossil fuel development, pausing permits for wind energy projects, and resuming the U.S. exit from the Paris climate agreement.
NATURAL GAS EXPANSION MAY NOT BE BENEFICIAL FOR TURKEY
The U.S. is set to increase liquefied natural gas (LNG) exports, particularly to Europe, offering a vital alternative to Russian gas amid supply disruptions caused by the war in Ukraine.
Trump’s policies seek to solidify the old continent’s dependency on U.S. energy supplies, which could, argues Mehmet Öğütçü, Chairman of the London Energy Club, come at a cost to Turkish ambitions, as “direct large-scale LNG sales to Europe would undermine Turkey’s strategy to position itself as an energy hub.”
Turkey has long sought to become a critical energy hub, leveraging its strategic location between Europe and Asia and its functional pipelines to channel energy flows, said Öğütçü. Yet, the U.S. focus on direct LNG exports to Europe threatens Turkey’s corridor-based energy model.
Moreover, Öğütçü foresees that Europe’s dependence on high-priced U.S. LNG could raise energy costs for its producers, indirectly affecting Turkey’s economy due to its trade ties with the continent, speaking to Turkey in Depth.
Echoing similar concerns, Mithat Rende, retired Turkish ambassador and expert on the energy field, warned that Turkey may face pressure to increase its own LNG imports from the U.S. at higher costs, putting more pressure on its energy budget and trade balance, in a telephone interview with Turkey in Depth.
OIL PRICE WARS
Another factor that could influence Turkey’s energy budget is oil prices.
As the U.S. ramps up oil production under Trump’s “Drill, Baby, Drill” agenda, alongside players like Guyana, Brazil, and Canada expanding output, a surplus in global supply could drive prices down.
For an importing country like Turkey, reduced oil prices could ease the financial burden of energy costs, providing much-needed economic relief.
However, according to Rende, “There could be a tussle between the U.S. and OPEC+ over oil prices. Trump might push prices down to pressure Russia or strike a deal with the Saudis and stabilize them. It’s impossible to predict at this stage.”
Such developments could lead to price fluctuations and regional volatility, with implications for the Turkish economy.
Furthermore, Trump’s policies and the resulting price changes could be curtailed by geopolitical tensions arising from a destabilized oil market, which “would benefit no one,” Öğütçü emphasizes.
The challenge for Turkey lies in carefully striking the right balance to benefit from these scenarios, but finding such balance will not be an easy task.
ALIGNING ON RENEWABLES: U.S. OR EUROPE?
During his confirmation hearing, Wright promised to be “an unabashed steward for all sources of energy.” The newly appointed energy secretary—who previously denied the existence of a climate crisis—took a moderate stance and said that climate change is real, but “there isn’t dirty or clean energy.”
Trump and Wright alike have been vocal critics of the transition to green energy. According to both Öğütçü and Rende, a departure from renewables under the new administration appears inevitable, with cuts to Biden’s carbon neutrality-targeting policies that would hinder not only the American renewable sector’s momentum but also global climate action efforts.
Öğütçü suggests a similar retreat from renewable energy could take place in Europe, as countries may follow the U.S. and China by scaling back their transition efforts. For Turkey, this could spell disaster: “A decline in global green energy investments might increase fossil fuel prices,” driven by increased demand for these resources.
In contrast, Rende considers a step back from renewable energy in Europe unlikely. “Deprived of Russian gas, Europe would strengthen its renewable energy capacities, as accelerating the green transition will become imperative,” he explains.
Turkey, for its part, has also committed to increasing its green energy production, setting ambitious goals that require foreign investment to achieve. Rende emphasizes that there is “potential for collaboration with Europe if Turkey could advance its renewable agenda.”
However, this would need to happen despite headwinds from the U.S.
