Energy and Natural Resources Ministry Fatih Dönmez said Monday that the subsidy amount for natural gas in Türkiye has reached TL 150 billion ($8.2 billion) in the first six months of this year as the government tries to shield citizens from globally rising energy prices.

"We contributed around TL 1,800 to TL 2,000 per person," in the period, the minister said.

Pointing out that Türkiye used approximately 60 billion cubic meters of natural gas last year, Dönmez emphasized that all of this was met from imported sources.

Explaining that energy is at the top of the agenda throughout the world, Dönmez said there is currently no problem with supplying the energy in the country but the global price increase in energy is very high.

"I have been in this sector for about 25-30 years. I follow prices and markets closely. I do not remember such an increase," he said.

"Two years ago, a thousand cubic meters of natural gas was $150. Now it is about $2,500. The barrel prices of oil fell below $50 during the pandemic period, it went up to $140, now there is a price trend in the $90-100 band" the minister said.

However, he said, since the first day, they tried not to reflect these price increases on the citizens.

"The amount of subsidies we applied for electricity and natural gas last year reached TL 100 billion. This year, in the first six months, our subsidy amount was TL 150 billion only for natural gas. It will continue in the same way," Dönmez said.

President Recep Tayyip Erdoğan last week said he did not expect Türkiye to experience any energy shortages this year, as he blamed Europe’s energy crisis on the sanctions imposed on Russia.

Türkiye’s underground natural gas storage is also expected to reach its full capacity by the end of the month. The volume at its underground facilities will have reached 5.6 billion cubic meters (bcm) – some 10% of Türkiye’s annual gas consumption.

In an effort to diversify its energy sources, officials have said Türkiye has acquired sufficient supplies to cope with demand. The country imports natural gas from Iran, Azerbaijan and Russia through pipelines, and buys liquefied natural gas (LNG) from Qatar, Nigeria, Norway, Algeria and the U.S.

The country is also preparing to use its own natural gas it discovered in the Black Sea as soon as the first quarter of 2023.

Türkiye’s annual gas consumption rose from 48 bcm in 2020 to a record 60 bcm in 2021 and is expected to reach 62 bcm to 63 bcm this year, according to official figures.

Oil prices down

Oil prices declined on Monday amid demand worries as China's strict zero-COVID-19 policy continues to weigh on market sentiment along with fears of an economic slowdown.

International benchmark Brent crude traded at $92.29 per barrel at 10:03 a.m. local time (7:03 a.m. GMT) for a 0.59% loss from the closing price of $92.84 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $86.11 per barrel at the same time for a 0.78% decrease after the previous session closed at $86.79 a barrel.

Oil investors started the week with unfolding demand fears caused by China's strict pandemic measures, as the country last week extended lockdown measures in the western city of Chengdu, a city home to almost 21 million people.

"Hundreds of millions of Chinese who typically hit the roads and domestic flights during the Mid-Autumn Festival - falling on Sept. 10 this year - and early October's Golden Week holidays are expected to stay home to avoid being ensnared by sudden lockdowns to curb the spread of COVID-19," said Mukesh Sadhav, head of downstream and oil trading at consultancy Rystad Energy.

Sadhav said lockdowns in key cities such as financial hub Shanghai have already hurt China's oil demand in the second quarter, while recovery for the rest of the year is expected to be slow as China adheres to its zero-COVID policy.

"This could cap intake of the world's top crude oil importer and dent global oil prices," he added.

Investors are monitoring how EU sanctions and recent price caps on Russian oil exports will reshape the supply map and impact geopolitics.

In line with the sixth sanctions package, EU leaders agreed earlier in July on a 90% reduction in Russian oil imports by the end of the year.

The plan also includes phasing out Russian crude oil supplies by Dec. 5 and the supply of refined products by Feb. 5.

The EU's plan to partially ban Russian oil was followed by the bloc's recent move to cap Russia's crude oil export prices. Russia, however, retaliated by closing its key Nord Stream pipeline that supplies gas to Europe "due to a technical issue."

Investors will be keeping tabs on the latest demand and supply data to be published by the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) on Tuesday and Wednesday, respectively.