Washington’s push to isolate Iran could cost Turkey one of its biggest gas suppliers

Turkey’s Iranian gas habit is about to collide with Washington’s Iran sanctions push. The US has threatened economic penalties against countries that continue doing business with Tehran — putting Ankara’s Iranian gas imports at risk, Bloomberg reports. Turkey sourced nearly 7.7 bcm from Iran last year— around 13% of its gas imports — and the flows have continued even after the two countries’ 25-year supply contract expired at the end of July.

The business lens: diversification is paying off for Washington

Turkey has been steadily reducing its reliance on Iranian gas, widening both the number of suppliers and the range of contracts. State-owned Botas has built a wide LNG portfolio, including around 15 bcm of supply under 2025-2028 agreements with eight global suppliers — the likes of Germany’s Sefe, Japan’s Jera, Norway’s Equinor, and Italy’s Eni — while a new 15-year agreement is set to bring another 2.2 bcm a year of Azerbaijani pipeline gas from the Absheron field starting in 2029.

The shift has brought US suppliers deeper into Turkey’s gas mix. The country signed its second long-term US LNG offtake agreement last December — a nine-year Woodside agreement covering 5.8 bcm over nine years from 2030. It also secured a 20-year Mercuria agreement for around 4 bcm a year from 2026, as well as LNG supply contracts with ExxonMobil for 2.5 mtpa and Shell for 4 bcm a year.

That gives Washington an economic lever as well as a sanctions tool. Ankara has committed to take nearly 1.5k US LNG cargoes over 15 years as it targets USD 100 bn in bilateral trade — making Turkey a major buyer of American energy just as the US pushes it away from Iranian supply.

But replacing Iranian gas will still come at a cost: “Initially, much of the shock would probably sit with Botas. But ultimately there are only several places for that cost to go: the Botas balance sheet, the government budget, industry, or consumers,” CEO of Global Resources Partnership Mehmet Ogutcu tells EnterpriseAM.

Higher imported-gas costs would feed through electricity prices, industrial costs, and inflation, Ogutcu says. Turkey still subsidizes around 45% of residential natural gas bills, and its Energy Minister Alparslan Bayraktar said in April that the government’s 2026 electricity and gas support program could rise from TRY 305 bn to roughly TRY 925 bn if elevated energy prices persist through year-end. However, Turkish President Recep Tayyip Erdoğan has signaled that Ankara will not jeopardize ties with Washington over Iranian gas — even if that means securing more expensive replacement supply before winter.

The systems lens: new suppliers don’t ensure a new route

Turkey has diversified its gas supply, but its transport network remains more concentrated. Ankara started importing Turkmen gas in March 2025, with 1.3 bcm delivered via an Iranian swap. Turkey was still considering higher volumes through the same route last year, before the swap was suspended after just a month or two, Iranian energy analyst Dalga Khatinoglu tells us.

Why this matters: It indicates why adding suppliers doesn’t necessarily remove the risks attached to them. Washington last year refused to approve Iraq’s plan to import Turkmen gas through Iran, despite Baghdad arguing that the gas itself was Turkmen, because the swap arrangement would still economically benefit Tehran.

The bigger question for Turkey is whether each new source comes with an independent route. “Having five suppliers instead of two doesn’t necessarily give you five independent supply corridors,” Ogutcu argues. True diversification means reducing exposure not just to individual suppliers, but also to the routes, contracts, infrastructure, financing arrangements, and political risks that underpin those supplies. “Turkey has made impressive progress on the first. It still has work to do on the others,” he adds.

The resilience lens: Turkey has the backup — but not all of it is ready

Turkey has built a buffer against losing Iranian gas, but some of the capacity is still catching up with the country’s plans. Turkey has around 161 mcm / d of LNG regasification capacity, while its roughly 6.3-6.5 bcm of gas storage is full. Domestic production is helping as well, though the Sakarya region was still producing around 9.5 mcm / d, against earlier targets of roughly 20 mcm / d by 4Q 2026.

Turkey’s LNG capacity and rising domestic production leave it with enough supply options to withstand the loss of Iranian gas, Khatinoglu says. But the real stress test “is not whether Turkey can buy another LNG cargo. It is whether Turkey can land it, regasify it, inject or withdraw it when necessary and move those molecules to the right part of the country on the coldest day of January,” according to Ogutcu.

The bottom line: Turkey has spent two years building genuine optionality — LNG contracts, Azerbaijani pipeline gas, domestic production — but the Turkmen gas-via-Iran swap shows that optionality on the molecule doesn’t fully insulate Ankara from Washington’s transit-route logic.