The Oil and Gas Mess Near Cyprus
Oil and Gas extraction is becoming an issue between the small Island of Cyprus and Turkey. The later does not recognize the former’s maritime borders leading to international tensions in the Mediterranean.
In early October, the Cypriot government invited tenders for gas extraction in Block 7.1)Ankara believes that this step impairs the interests of both Turkey and the Turkish Cypriots and announced that remedial measures will be taken, which might entail an escalation of tensions in this region of the Mediterranean.
Turkey neither recognizes Cyprus’s maritime borders nor the agreements its exclusive economic zones. Nicosia manages the gas exploration in the waters it considers its own. This leads to a conflict about which the Gefira Team is reporting on a regular basis. In February we described the complex situation in connection with the gas blocks around Cyprus.2)Then the Turkish navy stopped the exploration ship of Italian Eni from entering Cyprus’ territorial waters by threatening to sink it.3)In response, Rome sent its own ships to the region.
The territorial dispute will be something to watch in the future. Oil and gas prices will fluctuate according to geo-political risk, which will in turn raise or lower prices here in the United States accordingly.