Sanctions Cast Uncertainty Over Turkey's Gas Swap with Iran and Turkmenistan

Erdogan’s Visit and Gas Negotiations

On 12 December, President Recep Tayyip Erdogan travelled to Turkmenistan to celebrate Ashgabat’s 30th anniversary of neutrality. While attending the festivities, he held meetings with Turkmen leaders, where the focus was expected to be the expansion of natural‑gas supplies to Turkey. The trip underscores Ankara’s urgency to secure reliable winter gas, especially after the power cuts that hit the country during the 2022 heating season.

Existing Iran‑Turkey Deal and Upcoming Expiry

Turkey has imported 9.6 billion cubic metres (bcm) of Iranian gas annually since 2001. The current contract, which has been extended multiple times, is scheduled to end in July 2026. Throughout its lifespan, the supply has been punctuated by interruptions—often in mid‑winter—when Tehran diverts gas to meet domestic demand or when sanctions impede infrastructure maintenance. These disruptions have highlighted the need for a more resilient supply chain.

Swap Arrangement with Turkmenistan

In March 2025, Turkey and Turkmenistan launched a swap agreement aimed at cushioning Turkey against Iranian supply volatility. Under the deal, Turkey would receive 1.3 bcm of Turkmen gas each year via the existing Iran‑Turkey pipeline. In return, Turkmenistan would deliver a slightly larger volume of gas to north‑western Iran, with the difference covering Iran’s transit costs.

The swap began smoothly: Turkey received 112 million cubic metres (mcm) of Turkmen gas in March and a cumulative 465 mcm by June. However, supplies halted abruptly despite Botas, the state gas importer, having secured monthly pipeline capacity. The reasons remain unclear; Turkmen officials cited “technical reasons,” while Turkish sources hinted at payment issues. Many analysts now point to sanctions as the underlying cause.

Sanctions Landscape and Potential Impacts

The U.S. and EU have intensified sanctions against Iran over the past year. In June, the Trump administration broadened sanctions to cover barter trades for gas, and the EU followed suit in September. The current Turkey‑Iran deal enjoys a waiver from Washington, which is expected to continue if the agreement is renewed beyond 2026.

Turkmenistan, however, faces a different reality. The likelihood of receiving a waiver to ship gas through Iran is slim, as U.S. officials appear to use the sanction regime to pressure Ashgabat into fully committing to the trans‑Caspian pipeline project. While Turkmen leaders have praised U.S. support for the TAPI (Turkmenistan‑Afghanistan‑Pakistan‑India) pipeline, they have also criticized Washington’s immigration restrictions on Turkmen citizens.

Future Outlook

Despite the uncertainty, Turkish Energy Minister Alparslan Bayraktar remains optimistic. He stated that the first year of the swap saw Turkey import gas from Turkmenistan for the first time and that the next step is to increase volumes. The Turkish government’s ambition to bring the long‑standing trans‑Caspian pipeline to fruition remains unchanged, with the swap deal serving as a stepping stone.

The situation remains fluid. If sanctions tighten further or a waiver is denied to Turkmenistan, Turkey could face renewed supply gaps during the critical winter period. The outcome will hinge on diplomatic negotiations and the evolving U.S. and EU sanction policies.

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**Key Facts**

• Turkey imports 9.6 bcm/year of Iranian gas since 2001; contract ends July 2026.
• Swap deal: Turkey receives 1.3 bcm of Turkmen gas via Iran‑Turkey pipeline.
• March‑June 2025: 112 mcm (Mar) and 465 mcm (by Jun) of Turkmen gas supplied.
• U.S. sanctions expanded in June (barter gas) and EU in September.
• Turkey’s deal has a U.S. waiver; Turkmenistan’s waiver is unlikely.
• Turkey seeks to revive trans‑Caspian pipeline; TAPI pipeline also under discussion.