The 20-year Turkish-US deal signed in Washington on September 25 during Turkish President Tayyip Erdoğan’s meeting with US President Donald Trump marks a new chapter in the balance of energy and geopolitics.
The agreement between BOTAŞ and US producers is more than a long-term supply contract; it is a clear signal of Türkiye’s determination to reduce dependence on Russia, diversify its energy mix and strengthen its geopolitical autonomy. Washington’s message is becoming ever clearer: “Cut, even eliminate, your imports of Russian gas and oil,” The Caspian Post reports citing foreign media.
This message is not aimed at Ankara alone. The European Union, in the wake of the Ukraine war, has moved at historic speed to wean itself off Russian hydrocarbons: coal imports are down to zero, oil dependence has plunged from 27 per cent to 3 per cent, and gas from 55 per cent to below 5 per cent. Germany and the UK are rebuilding their LNG infrastructure around US and Qatari supply, while Bulgaria will halt Russian gas transit from 2026.
Not Only a Matter of Trade
Energy can no longer be seen purely through the narrow lenses of “cost” or “security of supply.” It must be understood as part of a broader equation that includes geopolitical positioning, technological change and strategic sovereignty.
Natural gas is no longer just a fuel for industry, power generation, households or fertilizer. In the 21st-century energy order, it has become a strategic instrument shaping foreign policy, determining industrial competitiveness, and even influencing the course of wars.
For Türkiye, too, gas remains the backbone of industry, the spine of the economy and one of the most powerful levers of diplomacy. Who we buy it from, how, at what price, by which routes, and for what strategic ends is not simply a commercial question - it is a matter of national vision.
A $15-20 Billion Bill in 2024
In 2024, Türkiye imported around 52 billion cubic metres (bcm) of natural gas. With domestic production still meeting only about 4 per cent of total demand, the overwhelming bulk came from abroad. At an average price of $9-10 per MMBtu, the annual import bill reached roughly $16-18 billion, and in some scenarios as high as $20 billion.
These figures exclude production from the Sakarya field in the Black Sea and gas from Thrace, as these are classified as domestic output, not imports. Even though they require capital and operational spending, they do not entail significant foreign currency outflows. Output volumes are still limited - daily production from Sakarya in March 2024 was about 3.7 million m³, far too small to materially dent import dependence.
Pipeline Gas: A Cost and Dependence Balance
Pipelines remain the backbone of Türkiye’s gas supply. They offer large volumes at competitive prices but also carry geopolitical risks:
•Azerbaijan: Gas from Shah Deniz via TANAP is Türkiye’s cheapest and most stable source, priced at $7-9 per MMBtu (≈ $250-320/1000 m³). The current contract runs until 2036.
•Russia: Gas supplied through TurkStream and Blue Stream costs around $9-12 per MMBtu (≈ $320-425/1000 m³). Renewal windows for some contracts open in late 2025 and early 2026, but mounting political pressure makes this dependence increasingly fraught.
•Iran: Oil-indexed pricing makes this Türkiye’s most expensive pipeline gas at $10-13 per MMBtu (≈ $355-460/1000 m³). The deal - signed during Necmettin Erbakan’s government under unfavourable terms - expires in July 2026, offering a rare chance to renegotiate or reduce volumes. Future Turkmen gas could also flow through Iran.
Pipelines bring cost advantages, but the “hand on the valve” can easily turn into a political lever - a structural vulnerability Türkiye must manage carefully.
LNG and the Geopolitical Hedge
LNG provides Türkiye with two advantages pipelines cannot: diversification of supply and pricing flexibility. The 20-year US deal is therefore more than just an energy contract; it is a strategic tool expanding Ankara’s diplomatic and economic room for maneuver.
•United States: Spot and medium-term LNG cargoes arrive at $8-10 per MMBtu (≈ $280-355/1000 m³) - still competitive despite the long distance. The new contract takes effect in 2026, alongside existing deals.
•Qatar: Supplies indexed to European hubs are priced at $9-11 per MMBtu (≈ $320-390/1000 m³).
•Algeria: Oil-linked LNG costs $9-12 per MMBtu (≈ $320-425/1000 m³). The Sonatrach contract runs until 2027.
LNG’s share in Türkiye’s total gas imports rose to 44 per cent in the first quarter of 2025, up from 31 per cent in 2024 - a significant shift toward a more flexible and competitive gas portfolio.
2026-2027: A Renegotiation Window
The next two years will be pivotal for reshaping Türkiye’s gas landscape:
•The Iran contract expires in 2026.
•The Algeria deal runs until 2027.
•Several Russian contracts come up for renewal between late 2025 and early 2026.
•The new US LNG contract enters into force in 2026.
This period offers Türkiye perhaps its best opportunity in a decade to renegotiate prices, secure more flexible terms and diversify its supply portfolio.
Four Major Shifts Reducing Gas’s Dominance
Despite its strategic importance, natural gas will inevitably play a smaller role in Türkiye’s energy mix over the coming decades. Four key trends are driving this shift:
1.The rise of renewables: By 2024, renewables accounted for nearly 45 per cent of electricity generation, while gas fell to around 25 per cent. At this pace, gas could drop below 20 per cent by 2030.
2.The nuclear factor: The first unit of the Akkuyu nuclear power plant will go online in 2026, with additional plants - including small modular reactors (SMRs) - further reducing gas demand.
3.Energy efficiency: Investments in industry and buildings will structurally lower consumption.
4.AI and smart grids: Digital optimisation of demand, production and storage will further reduce the need for gas.
These forces will not eliminate gas but will reposition it as a balancing, backup and strategic fuel rather than the system’s main pillar.
Iraq, Syria, the East Mediterranean Frontiers
Türkiye’s energy vision must not be limited to current contracts. Over the next decade, the natural gas chessboard could be redrawn:
•Iraqi and Syrian gas could enter the mix once political stability is achieved. Delivering gas from northern Iraq and Syria to Europe via Türkiye would transform the country from a mere transit route into a strategic hub.
•Eastern Mediterranean dynamics may shift as new fields off Israel, Egypt and Cyprus come online, creating opportunities for Ankara to leverage its geography as the most viable export corridor.
•A joint LNG trading and distribution hub with Greece could emerge in the Aegean and Eastern Mediterranean, making Türkiye not just a conduit but a price-setting energy centre for the region.
Important but Not the Only
Natural gas will remain strategically vital to Türkiye’s energy security and economic competitiveness for the next 10-15 years - that much is clear. But it is no longer the sole axis. The rise of renewables, the arrival of nuclear power, advances in efficiency and AI-driven technologies will help Türkiye build a far more diversified, flexible and sustainable energy system.
The essence of this transformation is balance: securing cost advantages through cheap pipeline gas while gaining geopolitical autonomy through LNG; managing demand with new technologies while guaranteeing supply through long-term contracts.
Turkish Interests First
Give credit where it’s due. Ankara has, by and large, crafted and executed its natural gas strategy with intelligence and foresight. Going forward, the priority should not be “What Washington wants?”, “What Brussels demands?” or “Whether Moscow or Tehran will be offended.”
Türkiye must act according to its own national interests and long-term strategic imperatives. Because natural gas is no longer just an energy commodity; it is a strategic lever in the great power game of the 21st century. How Türkiye plays that lever will shape not only its energy future but also its geopolitical destiny and economic competitiveness on the global stage.
