An escalation in Turkey's most violent anti-government protests in years may complicate an already tense backdrop for energy security in the Middle East, possibly adding to the risk premium in benchmark oil prices, strategists told CNBC this week.
Although Turkey produces only negligible quantities of oil and natural gas, the country represents an "energy crossroad" – Russian energy exports from the Black Sea port of Novorossiysk flow though the strategic Turkish Straits to markets in Europe and the U.S. Turkey is also an important conduit for oil transported via pipeline from northern Iraq.
"This conflict within Turkey has geopolitical importance," said Bill Witherell, Cumberland's chief global economist in a commentary published on June 4.
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"Turkey, a member of NATO [North Atlantic Treaty Organization] and important ally of the United States, has a strategic location between Europe, the Middle East and Asia. It shares a border with Syria. The civil war in that country presents significant dangers to Turkey. Iran and Iraq are also on its border. It is not only global investors that will be closely watching developments in this country," Witherell wrote in a client note.