Turkey's Pipeline Politics: Russia, Iran, Greece, Italy

Turkey's role in the global energy arena gained new layers of complexity during the month of July. Officials in Ankara and Tehran signed a Memorandum of Understanding to pump Iranian and Turkmen natural gas through the Turkish pipeline network for destinations in the lucrative Western European market. The two neighbors also agreed to a Turkish investment of $3.5 billion to develop three phases of Iran's South Pars gas field, starting in 2008. During the following week, Turkey, Greece and Italy agreed to terms in Rome for the transportation of Central Asian natural gas through an existing pipeline from Turkey to Greece, and then through a new underwater pipeline that will be constructed between Greece and Italy starting next year.

These July initiatives are important building blocks for Turkey's nascent efforts to acquire valuable political and economic leverage as a key purveyor of Central Asian and Middle Eastern energy resources. The successful opening of the U.S. backed Baku-Tblisi-Ceyhan (BTC) pipeline in May of 2006 constituted a proof of concept that Turkey is a viable alternative to Russia for transporting Central Asian oil and gas resources. While the U.S. was the initial supporter for Turkey's role as an energy transporter, Turkey has astutely developed its own relationship with Iran to increase its involvement beyond U.S. geopolitical interests. As early as 2001, Turkey began to purchase Iranian gas exported from Tabriz to Ankara to fulfill domestic demand. Just as was the case in 2001, U.S. officials have voiced their displeasure with Turkey developing energy ties with this international pariah.

U.S. criticism over Turkey's economic ties to Iran are quite irrelevant when compared to the political capital Ankara gains by fostering regional energy cooperation and development. Turkey's ascendancy as a regional energy transportation corridor exists in direct competition to Russian political and economic interests. Russia not only controls a significant number of existing gas pipelines linking Central Asia and Europe, but it also has the financial and political capability to stymie further Turkish energy initiatives. Russia's recent announcement in March to build an oil pipeline through Bulgaria and Greece in order to bring its own resources to the Mediterranean is a perfect example of this competitive challenge.

There is therefore considerable logic in Turkey's decision to grow its regional energy cooperation with Iran. Turkey needs Iran not only as a supplier of energy for its network of pipelines, but it also needs Iran's regional influence in order to parry Russian efforts to dominate Central Asian energy resources in the future.