With rising global energy demands and its position between producing and consuming states, Turkey is primed to become a regional energy hub. By diversifying energy supplies and transit routes, Ankara hopes to enhance its economic leverage and geopolitical clout while meeting its own growing domestic energy needs.

The problem however, is that Turkey’s energy strategy is clashing with its national-security interests and similarly, its foreign policy is impeding energy-hub expansion. In particular, Turkish Prime Minister Ecep Tayyip Erdogan’s soft-power politics in the Kurdistan Region of Iraq and his sectarian-based agenda have alienated Baghdad — the real source of Iraq’s oil and gas wealth — while encouraging trans-border Kurdish instability. These tensions have been exacerbated by the Syrian crisis, and without readjustment, will ultimately stifle Turkey’s long term energy-cum-political ambitions.

Even though Turkey is already an energy transit zone, it seeks to become a real center where strategic energy sources can be refined, stored and transferred to high-value European markets. Greater supply diversity will also lessen dependency on Russian imports, which source 60% of Turkish and European Union gas needs.

To this end, Ankara has engaged in various Caspian pipeline projects and is pursuing new energy suppliers. One of the most important is Iraq, which holds about 143 billion barrels of oil and 110 trillion cubic feet (tcf) of gas, with another 150 tcf in potential gas reserves, including the Kurdistan Region. Turkey already has private and state companies invested in the northern and southern Iraqi energy sectors respectively, and has stakes in the existing Iraqi-Turkish pipeline that is exporting about 400,000 barrels per day to Turkey’s Cehan port with transit fees paid by Baghdad until 2035.