High oil prices have led Turkey to spend more than ever on oil imports. Following the dramatic rise in prices, oil and other fuel now amount to 22.3 % of Turkey's total import volume cost.
According to data provided by the Turkish Statistics Institute (TurkStat), oil and fuel imports increased by 56 % in the January-March period over the same period of 2007, amounting to $ 11 bn (EUR 7 bn). Total import costs of oil in the first quarter of 2007 equalled $ 7 bn (EUR 4.5 bn) and $ 33.8 bn (EUR 21.7 bn) for all of 2007.

In the first quarter of last year the cost of these products increased by 14 % and their share in Turkey's total imports stood at 20 %. If this dramatic rise of oil prices continues during the rest of the year, the annual cost of Turkey's energy imports is expected to total $ 53-54 bn (EUR 34-34.7 bn).
Turkey's growing oil import costs grew parallel to increasing oil prices and elevated Turkey's foreign trade and current account deficits. Total oil and fuels import volume in2002 was $ 9.2 bn (EUR 5.9 bn), an increase of 10 % compared to 2001. However, this number rose to $ 11.5 bn (EUR 7.4 bn) in 2003, a 26 % hike over the preceding year. Year 2004 saw Turkey spend $ 14.4 bn (EUR 9.3 bn) for oil, but this cost reached $ 21.2 bn (EUR 13.6 bn) in 2005, an increase of 48 %. The accelerated rate increases did not slow down in 2006, with Turkey seeing a 36 % increase and paying $ 28.8 bn (EUR 18.5 bn) for oil imports.

Energy experts claim there could be an increase of 15-20 % in Turkey's electricity prices, paralleling changes in oil and natural gas prices, because more than half of Turkey's electricity production depends on natural gas power plants. If this rapid increase in oil and gas prices continues, Turkey's current account deficit, which has grown rapidly in recent years due to oil prices, will continue to grow.
Oil prices steadied after hitting a record near $ 123 a barrel on worries over supply disruptions. Prices were supported by concerns about supply disruptions inNigeria, where production at a Royal Dutch Shell facility was cut after a weekend attack. The main militant group in Nigeria's oil-rich southern region said it is willing to cease hostilities if the federal government allows conflict mediation by a former US president.

A string of pipeline bombings in recent weeks has cut oil production in Nigeria by tens of thousands of bpd, contributing to the sharp rise in oil prices. The country is Africa's largest producer and a major US supplier.
Light, sweet crude for June delivery rose 5 cents to $ 121.89 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract soared to a record $ 122.73 a barrel before retreating to settle at $ 121.84, up $ 1.87.

"Clearly there's a lot of concerns about supply at the moment. The market's very jittery on any type of news, particularly supply disruptions," said Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne.
"There are many in the market who think these prices are as good as it gets and are positioned to see lower prices but we continue to see one-off supply issues keeping prices high," Pervan said.

Source: www.seeurope.net / Today's Zaman