• Turkey's importance in the energy markets is growing, both as a regional energy transit hub and as a growing consumer. Turkey's energy demand has increased rapidly over the last few years and likely will continue to grow in the future.
• Concurrent with Turkey's economic expansion, its crude oil consumption has increased over the last decade. With very limited domestic reserves, Turkey imports nearly all of its oil supplies.
• Although there are a number of international firms operating in Turkey, TPAO has preferential rights in the upstream sector.
• Turkey plays an increasingly important role in the transit of oil. It is strategically located at the crossroads between oil-rich Former Soviet Union countries and the Middle East, and the European demand centers. In addition, it is home to one of the world's busiest chokepoints through which 2.9 million barrels per day flowed in 2010.
• Turkey holds a strategic role in natural gas—between the world's second largest natural gas market, continental Europe, and the substantial gas reserves of the Caspian Basin and the Middle East.
• Turkey is increasingly dependent on natural gas imports as its domestic consumption rises each year. Natural gas is used domestically mainly in the electric power sector.
• Following the restructuring of the electricity sector, both consumption and generation of electricity have expanded. Most of the electricity is generated with conventional thermal sources, although the government plans to displace at least some of this generation with nuclear power.
• Turkey imports about 90 percent of the hard coal it consumes. Volumes of imported coal may rise in the future as coal's importance for electricity generation increases.

Analysis Last Updated: February 1, 2013