Turkey's energy security strategy in the emergent global energy outlook.

• Author: Guney, Nursin Atesoglu
• Position: COMMENTARY

What's New about the Global Energy Market?

Since the 2000s, the global energy landscape has undergone constant change. Various factors have affected both the demand and supply side of the global energy security outlook. In this regard, the period between 2000 and 2014 can be considered as the first turning point; most energy experts are in agreement, describing it as a revolutionary time. This period has become known for the emergence of new, independent energy powers making excessive demands for energy, and for the rise of new independent energy sources, especially the North American shale revolution. This revolutionary 'on the ground' change in the energy field has also transformed previous energy routes as well. As a result of the introduction of new technology in energy explorations in the oil and gas sectors that started at the beginning of the 2000s, the entrance of more hydro-carbon into to both global and regional markets has been guaranteed. In contrast to the situation for developing countries, the Euro-Atlantic world made progress in the field of energy efficiency and this, coupled with the effects of the slowing economies in Europe, resulted in lower levels of energy consumption in the EU. During the same period, the rising demands of emergent independent energy powers in Asia coincided with the effects of shortages of hydro-carbon supplies in countries like Libya, Iraq and others, that stemmed from the instability of the Arab Spring and its aftermath. Global oil production could not keep pace with the increasing demand and hence the price of Brent crude oil spiked at around US $115 per barrel. However, the price of oil since 2010 has remained quite stable for 5 years at around US $100.1

The world witnessed a new tide of change in the global energy market especially after mid 2014 when the price of Brent crude oil dropped nearly 50 percent to $52 per barrel on January 5th, 2015. "This drop in oil prices was associated with four factors. First, the rise in the supplies of oil and gas production came into a being because of oil companies' investments in new exploration techniques like drilling high water, as well as the introduction of the new technique of horizontal drilling and hydraulic fracturing. Of course, one cannot also deny the effect of OPEC's continuous reluctance to cut down production in 2014, which can be counted as a third factor that has led to the accumulation of the present oil supplies in the energy market." (2) The other reason why oil supplies in the global market have increased is related to accomplishments in energy efficiency measures that were previously introduced in the Euro-Atlantic world, and have successfully resulted in 60 percent lower consumption in the IAE countries. Lastly, the Western countries' intense efforts to diversify their energy mixes, which have resulted in reducing the share of fossil fuels and increasing the share of alternative energy sources, like renewables and nuclear, naturally led to an increase in the hydro-carbon sources supplies available in the global market. (3) Consequently, both the main producers and consumers in the global energy market, in the face of these radical changes, have been obliged to adjust both their economies and their energy strategies in order to retain their positions. During this process of adaptation, some major importers of hydro-carbons have been relieved by the falling prices, where others, including the major producing countries, have been hurt by these changes.

A third major breakthrough in the global energy market is expected to occur after the finalization of the Iranian nuclear deal. Recently, the sustainability of the constant flow of hydro-carbon supplies to European addresses has become a renewed concern for the EU, especially in the aftermath of the Ukrainian situation, and the residual security problems that resulted from the weakening states in the post-unfinished Arab Spring. The ongoing civil war in Syria and the current instability in Iraq and Libya have barred the flow of oil and gas supplies from these places. Currently, the geopolitical fault lines that have been manufactured along sectarian and religious lines in the aftermath of the counter-revolutionary Arab revolts have unfortunately given way either to the eruption of continuous brutal civil wars in the MENA region, or led to radical jihadist groups filling the power vacuum resulting from the weakening of central governments in this part of the world. Thanks to the availability of sufficient...