Turkey's Hormuz energy hinge: Ankara's new leverage

The chokepoint at the center of the map

The Strait of Hormuz is 33 kilometers wide at its narrowest point. Through that gap, in an ordinary year, passes roughly a fifth of the oil the world burns. There is no redundancy built into this arrangement. There never has been.

In the first half of 2025, the strait carried approximately 20.9 million barrels per day of petroleum liquids - about 20% of global consumption. Crude and condensate accounted for 15 million b/d of that figure; refined products made up the rest. Asian markets absorbed most of it. China, India, Japan, and South Korea together took in nearly 70% of what moved through the strait, according to U.S. Energy Information Administration data.

Then came the 2026 Iran War, and with it, sustained disruption to the one waterway the global economy had quietly assumed would always be there.

The International Energy Agency has described the resulting disruption as among the largest supply shocks in the history of oil markets. Insurance costs for tankers transiting the strait spiked by roughly a hundredfold at the peak of the crisis. Traffic, which normally runs to 88-110 vessels a day, has at various points collapsed to a fraction of that - single digits on the worst days. Brent crude, which traded in the $65-70 range before the war, surged past $100 a barrel during the sharpest phase of the disruption.

The strait has not stayed shut in a straight line. A ceasefire memorandum in mid-June briefly lifted both the U.S. naval blockade and Iran's own restrictions, and commercial traffic began, cautiously, to return. Then attacks on tankers resumed in early July, and shipping data showed transits falling again - a pattern of escalation, pause, and re-escalation rather than a single clean closure. What has stayed constant throughout is the premium the market now places on any route that does not depend on the strait at all.

That premium has a geography. It runs north, through Turkey.

Turkey's pipelines were waiting for this

Turkey did not build its energy infrastructure in anticipation of a war in the Gulf. The Kirkuk-Ceyhan pipeline, the BTC line, TANAP, TurkStream - these projects date back years, in some cases decades, and were built for reasons that had nothing to do with the Strait of Hormuz. But infrastructure built for one purpose can be repurposed by a crisis, and that is precisely what has happened.

Ambassador Nuh Yilmaz, Turkey's envoy to Damascus, noted earlier this year that difficulties in the Strait of Hormuz would likely redirect energy flows toward land routes running through Turkey, Iraq, and Syria to the Mediterranean. Turkish Energy Minister Alparslan Bayraktar has made the same case more bluntly, framing pipeline diplomacy as a direct answer to a shipping lane that keeps closing.

"You already cannot move through Hormuz. Now imagine that a certain amount of gas is being sent to Turkey and Europe through a pipeline. We are opening an alternative export route for you."

The claim is not rhetorical. It is backed by pipe in the ground - though the volumes moving through that pipe have been smaller, and the diplomacy around them messier, than the early framing of this crisis suggested.

Kirkuk-Ceyhan: reactivated, not triumphant

The Kirkuk-Ceyhan pipeline is the clearest test case of Turkey's leverage, and it is a more complicated story than a simple reopening.

The line runs 970 kilometers from northern Iraq's oilfields to Turkey's Mediterranean coast, with a twin-pipe design capacity of roughly 1.4 million barrels per day. Its real-world usable capacity has long been closer to 300,000-500,000 b/d, and even that has rarely been reached. The pipeline had already been mothballed for years by 2025, a casualty of a 2023 international arbitration ruling that found Turkey liable for unauthorized exports and ordered it to pay Iraq roughly $1.47 billion. Flows resumed in a limited fashion in late 2025, averaging around 220,000 b/d.

The Strait of Hormuz closure in February 2026 forced a faster reactivation. Iraq's oil ministry pushed to restart flows through the Saralo pumping station, and by March, exports via Kirkuk-Ceyhan resumed at an initial rate near 250,000 b/d. Iraq's ambitions were larger - officials spoke of tripling exports toward 650,000-770,000 b/d to offset losses from the closed south. The reality has landed well short of that target. Kirkuk flows to Turkey have run closer to 177,000-250,000 b/d through the spring, constrained not by pipeline capacity but by a financial standoff between Baghdad and the Kurdistan Regional Government over dollar transfers - a dispute the war has not resolved and, in some respects, has sharpened.

The stakes go beyond the northern pipeline. Iraq's overall crude production fell by roughly two-thirds at the low point of the crisis, from around 4.3 million b/d to 1.4 million b/d, as the closure of the Strait of Hormuz cut off its dominant southern export terminals. Baghdad has scrambled for every overland alternative it can find: trucking crude and fuel oil across the Syrian border to the port of Baniyas, at rates reported between 500 and 700 tanker trucks a day; exploring routes through Jordan; and pressing Turkey for an expanded, longer-term pipeline agreement.

Turkey, for its part, has driven a hard bargain. The existing Kirkuk-Ceyhan agreement expires this month, and Ankara has used the renewal talks to push for a broader framework covering not just crude oil but gas, petrochemicals, and electricity - along with an offset against the arbitration fine it still owes Baghdad. A new deal, reportedly covering twelve months, is described as close to signature. The pattern is not one of Turkey passively benefiting from Gulf chaos. It is Turkey actively pricing its leverage while the chaos lasts.

The Ceyhan terminal: built for volume it hasn't seen yet

If the pipelines are supply lines, Ceyhan is the depot. Operated by Botaş International Limited, the terminal on Turkey's Mediterranean coast is already the export point for the Baku-Tbilisi-Ceyhan pipeline, which carries roughly 1.2 million b/d of Caspian crude, largely from Azerbaijan, to international markets. It has functioned as a stable alternative to Gulf and Russian maritime routes since BTC opened in 2006.

Ceyhan's current crude storage capacity sits at about 11.1 million barrels - not the higher figure sometimes cited in early 2026 coverage. That is the number BOTAŞ is now moving to expand, dramatically. General Manager Abdülvahit Fidan has laid out a plan to build 40 new storage tanks, quadrupling capacity to 45 million barrels by 2031. The first six tanks begin construction this year, with initial completion targeted for 2028 and the full build-out running through 2030-2031.

It is worth being precise about what this project is and isn't. BOTAŞ has framed the expansion as a long-planned strategic move, not an emergency reaction to the war - the land was expropriated back in 2024, and the environmental review was finished before the crisis began. What the war has done is sharpen the argument for it. A former head of BOTAŞ's gas procurement division put the logic simply: more tank capacity means more trade flexibility, and if Ceyhan eventually adds refining capacity for diesel, gasoline, and jet fuel alongside crude storage, the port could evolve into something resembling the Mediterranean answer to Rotterdam.

That is an ambition, not yet a fact on the ground. Ceyhan today is a transit and storage hub. Whether it becomes a genuine pricing center depends on investment still years from completion.

Gas: three pipelines, one aspiration, and one that mostly isn't real

Turkey's leverage over liquid fuels has a parallel in natural gas, though the gas story includes at least one project that deserves more skepticism than the headlines it generates.

TANAP, the Trans-Anatolian pipeline, currently moves about 16.2 billion cubic meters (bcm) of Azerbaijani gas a year, with roughly 5.7 bcm staying in Turkey and the remainder continuing to Greece and Italy via the Trans Adriatic Pipeline. Engineering plans allow for expansion toward 31 bcm by 2026 and, eventually, up to 60 bcm - but as of the pipeline's own operator, no investment decision on that expansion had been made as of mid-2026, pending firmer demand signals from European buyers.

TurkStream, which runs under the Black Sea from Russia, has a combined capacity of 31.5 bcm across its two lines - one supplying Turkey's domestic market, the other continuing on to Bulgaria, Serbia, and Hungary. Together, TANAP and TurkStream have moved close to 100 bcm of gas since coming online, cementing Turkey's position as a transit country for both Caspian and Russian supply.

The proposed Qatar-Turkey pipeline is a different matter, and the Hormuz crisis has revived interest in it without resolving the reasons it has failed to advance for over a decade. The concept - moving gas from Qatar's North Field through Saudi Arabia, Jordan, and Syria to Turkey, at an estimated cost of $10-12 billion over roughly 1,500 kilometers - dates to 2009, when Bashar al-Assad's government rejected it in favor of a competing Iran-aligned route. The fall of the Assad regime reopened the diplomatic door; QatarEnergy's declaration of force majeure on some LNG contracts after Iranian strikes on its facilities gave Ankara a fresh talking point. But energy analysts who have examined the project's fundamentals - security conditions in Syria, Qatar's preference for the flexibility of its LNG fleet over a fixed pipeline commitment, Europe's existing capacity to absorb more seaborne gas - generally describe it as, at best, a long-shot bet rather than a project moving toward construction. One assessment called it less a construction plan than a test of whether the crisis has shifted how investors price political risk. That is a fair description, and it is worth stating plainly rather than treating the pipeline as a fait accompli.

The more credible near-term gas project is the Trans-Caspian pipeline, which would carry Turkmen gas roughly 300 kilometers under the Caspian Sea to Azerbaijan, connecting into the South Caucasus Pipeline and TANAP. Energy analysts view this route as considerably more plausible than the Qatar option, in part because it avoids Syria entirely and in part because Turkmenistan already has 80 bcm of annual export capacity sitting underused.

The Turkish Straits: the older leverage, still intact

While attention has shifted to overland pipelines, Turkey's authority over the Bosporus and Dardanelles - the Turkish Straits - remains a separate and long-standing source of power, one that predates the current crisis by a century.

In the first half of 2025, 3.7 million b/d of crude and petroleum products moved through these straits, accounting for roughly 5% of global maritime trade. More than 45,000 vessels transit annually. Under the 1936 Montreux Convention, Turkey holds the legal authority to regulate this passage - a power that has always mattered and that matters more whenever other global chokepoints come under stress. With the Strait of Hormuz contested, the Turkish Straits function as one of the few remaining reliable exits for Black Sea energy exports, Russian and otherwise.

Ankara's management of the straits has generally been read as calm and procedural rather than adversarial, a posture that has reinforced Turkey's image as a stable actor even as the surrounding region has not been. That reputation for straits management is a related but distinct topic from the newer pipeline story explored in the broader landscape of strategic chokepoints that shape global trade and power, where Hormuz, Malacca, and the Turkish Straits all sit on the same list of pressure points that can move markets in a matter of hours.

From transit fees to hub status: a distinction that still has to be earned

President Recep Tayyip Erdoğan has repeated for years that Turkey's ambition is to become a genuine energy hub, not merely a transit country. The distinction matters. A transit country collects a toll and moves on. A hub sets prices, holds inventory, and manages distribution - which is a different, harder, and more lucrative business.

The 2026 crisis has pushed some buyers toward longer-term Turkish contracts rather than one-off spot shipments, which is a step in the hub direction. But Turkey is not there yet. Ceyhan's storage capacity, even after expansion, would represent a fraction of the reserves held by established hubs like Rotterdam or Fujairah. The Kirkuk-Ceyhan negotiations underway this month are a reminder that Turkey's northern pipeline still depends on a fragile political settlement between Baghdad and Erbil that Ankara does not fully control. And the Qatar pipeline, the most headline-grabbing of the hub-building projects, remains closer to a proposal than a commitment.

Turkey's domestic energy picture supports the hub ambition more solidly than any single pipeline deal does. Renewable sources made up about 62% of Turkey's total installed electricity capacity by the end of 2025, according to the SHURA Energy Transition Center, up from 59.7% the year before - though renewables' share of actual generation was lower, at roughly 44%, reflecting a drought-driven decline in hydropower output. Wind and solar combined now generate about 22% of Turkey's electricity, having overtaken hydropower for the first time in 2025, and installed wind-and-solar capacity alone has climbed past 42 gigawatts as of mid-2026 - putting Turkey roughly a third of the way to its 2035 target of 120 gigawatts. Among the 24 largest European electricity markets, Turkey ranks in the mid-teens for wind, solar, and overall renewables share - a leader regionally, in the Middle East, Caucasus, and Central Asia context, but still trailing the continent's most advanced systems.

That domestic buildout matters for the hub argument in a specific way: the more of its own power Turkey generates from wind, solar, and hydropower, the more of the fossil fuel passing through its pipelines it can trade rather than consume. It is a structural advantage, though not yet a decisive one - coal still supplied the single largest share of Turkey's electricity generation in 2025, at roughly 34%, and gas imports remain a significant exposure whenever hydropower falters.

What the leverage costs

None of this comes free. Turkey's growing centrality to Iraqi, Azerbaijani, and potentially Qatari energy exports makes it a more consequential actor in a volatile region - and a more exposed one. The pipeline agreements Ankara is negotiating with Baghdad this month carry real diplomatic weight precisely because Iraq has few alternatives; that same fact makes the relationship a source of friction whenever Turkish and Iraqi interests diverge, as they have over the arbitration fine and the terms of renewal.

The European relationship carries a similar duality. The EU's interest in diversifying away from Russian gas gives Ankara real negotiating leverage in Brussels, on energy and on other files. But that leverage is a function of an ongoing crisis, not a permanent structural fact - if the Strait of Hormuz situation stabilizes and Gulf shipping insurance rates fall back toward historical norms, some of the urgency driving buyers toward Turkish pipeline contracts is likely to ease with it.

A hinge, not yet a fixture

The facts, stated plainly: the Strait of Hormuz crisis has driven real volume toward Turkish-controlled infrastructure, has accelerated investment decisions - the Ceyhan storage expansion chief among them - that were already on the drawing board, and has given Ankara additional leverage in negotiations with Baghdad, Brussels, and Doha. All of that is real and measurable.

What is less certain is durability. Kirkuk-Ceyhan flows remain well below the volumes early crisis coverage projected, constrained by an intra-Iraqi political dispute the war has not fixed. The Qatar pipeline remains, by most informed assessments, more aspiration than infrastructure. And the Strait of Hormuz itself has proven capable of reopening as well as closing - a ceasefire in June, renewed strikes in July, a pattern that has not yet settled into anything permanent.

Turkey's geography is fixed. Its pipelines, terminals, and straits authority are real assets that do not depend on any single week's headlines. But the premium the market currently places on those assets is tied to a war whose trajectory remains genuinely open. The hinge is real. Whether it becomes the permanent architecture of global energy, as some in Ankara now argue, or a temporary adjustment that eases once Hormuz stabilizes, is a question the current data cannot yet answer.