World Economy

IEA Cautions Turkey on Energy Policy

IEA Cautions Turkey on Energy PolicyIEA Cautions Turkey on Energy Policy

Turkey’s economy may face a challenging period in the event of an increase in oil prices, the executive director of the International Energy Agency, Fatih Birol, has said, while urging officials to take measures on their energy policies.

Turkey is among the countries which have secured some “positive effects” over the drop in oil prices but measures should be taken considering that “prices will not remain constant,” Birol, who is also a Turkish economist and energy expert told, Dogan News Agency in an interview on the sidelines of the seventh International Energy and Climate Forum organized by Sabanci University Istanbul International Center for Energy and Climate.

Birol listed countries in three categories, depending on how they were affected by the decrease in oil prices. Birol described the economies of Saudi Arabia, Russia and the United Arab Emirates, which are mostly dependent on oil revenues, as countries which were “negatively affected” by the drop in prices, as their economies had “weakened” after the developments.

He added that Nigeria, Azerbaijan, Venezuela and some other African countries had suffered “the most significant damage,” with many of their economies now going bankrupt.

Birol said Turkey was among the countries that were “positively impacted” by the fall in prices.

“The current account deficit in countries that import oil, including India, Turkey and Japan, have decreased to some extent. The fall in oil prices was a major opportunity for Turkey, whose economy has been going through a difficult time. However, it would not be realistic to figure that these prices, which were $30 and recently reached around $50, would remain constant in the long term,” he said.

According to Birol, Turkey should take as much advantage as it can of the global wave of liquefied natural gas, which is expected to cost little. “A major opportunity fell into our lap,” he said.

Meanwhile, he urged that Turkey should “decrease its dependence on oil and natural gas, and search for cheaper natural gas.”

“Turkey imports natural gas excessively from a certain country. It should diversify its sources, lower prices and encourage competition to achieve that. This would only emerge if Turkey turns toward other alternatives,” he said.  Turkey could also import gas from the United States, Qatar or Canada, he added.

“If we seek alternatives and decrease economic costs, we would also get rid of the downsides of the dependence on a certain country, on a political basis,” said Birol.