Levent Gürses
A ceasefire was declared 40 days after the war launched by US-Israeli aggression against Iran on 28 February. In fact, a ceasefire was declared, but the war is not over. Although commodity, stock and other markets have calmed down, the eyes of the entire world remain fixed on the Strait of Hormuz… Iran has realised that Hormuz, which has become the world’s energy lifeline, is more effective than weapons or missiles, and is using it as a powerful bargaining chip.
Following the agreement between the US and Iran on a two-week ceasefire, stock markets are rising and oil prices have fallen by 10 per cent. However, given the demands of both sides, it remains unclear how a lasting peace can be achieved. Ultimately, who wins this war will depend on who controls the Strait of Hormuz, and at present, that control lies with Iran.
All eyes are on the Strait of Hormuz during this fragile ceasefire
The Strait of Hormuz, through which 20 million barrels of oil passed daily before the war, has not been fully reopened. On the second day of the ceasefire, Iran closed it again, citing Israel’s attack on Lebanon as justification. As of 16:00 on Wednesday 9 April, only nine ships had managed to pass through the Strait of Hormuz since the ceasefire was declared on Tuesday night. Before the war, an average of 138 ships passed through the strait every day. It is estimated that around 800 ships are currently stranded in the strait. According to a BBC report, maritime experts stated that “in reality, nothing has changed yet”, noting that it would take time for ship crews to be convinced they could pass through safely. Richard Meade, editor-in-chief of Lloyd’s List, also says that this remains a “very dangerous” period for shipowners and that uncertainty remains at a high level.
The economic winner of the war was the US
In fact, it is becoming clear that the winner of the war is the US, which initiated the attack. It is understood that the aim of the war was to protect the petrodollar system and to increase US exports, as the US has become the largest player in oil and gas production.
Whilst reducing the flow of oil and gas to its biggest rival, China, it also increased its energy sales as the world’s largest producer. By restructuring global energy flows, it has become the world’s energy reserve power. According to the International Energy Agency (IEA), 72 energy facilities were damaged during the war.
In the last month, US exports of refined petroleum products hit a record 3.1 million barrels per day, crude oil exports rose by 38 per cent, the UK began sourcing jet fuel from the US, and there has been an 82 per cent increase in Asia’s demand for crude oil from the US. According to commodities expert Jack Prandelli, as of 9 April, 68 tankers are heading towards US ports, which is more than double normal levels…
Furthermore, with facilities in Qatar suffering damage, the US has seen opportunities open up in the LNG market. While exports to Europe and Asia have reached their highest levels, the US aims to increase capacity for 2026–27.
With 17 per cent of Qatar’s LNG capacity currently offline, repairs are expected to take 3–5 years. It seems certain that QatarEnergy’s supply will not return to full capacity any time soon, and US LNG export giants such as Cheniere Energy and Venture Global stand to benefit from this. Venture Global, one of the US’s largest natural gas companies, announced in its first-quarter 2026 financial results that LNG sales had doubled year-on-year to 480 million Btu, with revenue reaching $13.8 billion.
A significant drop in production in Gulf countries
In particular, Gulf countries—where government revenues in some nations are 90 per cent dependent on oil—have been thrown into disarray by the war. Oil exports from the region fell by 44 per cent overall between February and March. Iraq’s exports fell by 82 per cent, and Kuwait’s by 75 per cent. While Qatar’s oil and LNG exports fell by 70 per cent, Saudi Arabia’s exports dropped by 34 per cent despite its pipelines operating at maximum capacity. In Saudi Arabia, operations were partially suspended due to attacks on energy facilities; a pump station on the East-West oil pipeline was damaged, resulting in a daily loss of approximately 700,000 barrels of oil flow.
Sharp fall in oil prices; Brent at $96.7
The two-week ceasefire caused sharp fluctuations in oil prices. Oil prices fell by over 16 per cent. Whilst a barrel of Brent crude had risen to $111 in April, it fell to $91.7 by 8 April following the ceasefire. On 9 April, following Israel’s attack on Lebanon and Iran’s closure of the Strait of Hormuz, prices rose to $99; by midday on 10 April, they were trading at $96.70, having lost 10 per cent of their value on a weekly basis.
European natural gas prices, having fallen by approximately 20 per cent to below 43 euros, were trading below the 45-euro level on 10 April.
Gold’s ‘ceasefire’ uncertainty: trading sideways after sharp rise
Gold prices are trading sideways following a sharp rise, influenced by uncertainties surrounding the ceasefire process between the US and Iran. The price of gold, which had fallen to $4,621 per ounce on 7 April prior to the ceasefire, rose above $4,850 on 8 April following the announcement of the ceasefire. The spot price of silver also gained more than 5 per cent, rising above the $77 level.
However, following Israel’s attack on Lebanon and Iran’s closure of the Strait of Hormuz, the price fell to $4,708 on 9 April. As of midday on 20 April, it is trading at $4,743.
Meanwhile, banking giant UBS has released a new forecast for gold prices. Stating that a new record for gold will be seen by the end of the year, the bank has set its year-end gold target at $5,600 per ounce.
City hospitals, bridges and motorways: $1.2 billion in the first quarter
Whilst the war with Iran has inflicted major damage on the economy, and a wave of price hikes has swept across fuel, food and electricity, and foreign exchange reserves are dwindling, the continued guarantee payments for bridges, motorways and city hospitals are once again causing significant public outrage during such a period. In the first quarter of the year, the total payments made for city hospitals, bridges and motorways amounted to 55 billion lira, or 1.2 billion dollars at an exchange rate of 10 to the lira.
5 billion TL in March alone
Under the build-operate-transfer model, a Treasury-guaranteed payment of 5 billion TL was made for bridges and motorways in March alone. Whilst the total amount for the first quarter reached 18–19 billion TL, the sum due in 2026 is expected to exceed 101 billion TL. According to a report in Birgün newspaper, substantial payments for bridges and motorways operated under the BOT model are set to be on the agenda in April.
As is well known, the Yavuz Sultan Selim, Osmangazi and 1915 Çanakkale bridges, along with the Istanbul-Izmir, Northern Marmara, Malkara-Çanakkale, Ankara-Niğde, Menemen-Aliağa-Çandarlı and İzmir-Çeşme motorways, were constructed by the private sector using the BOT method. The state provided a vehicle traffic guarantee for these projects. Traffic volumes were set in foreign currency. If vehicle traffic falls below the guaranteed threshold, the state covers the difference.
35.2 billion TL for 18 city hospitals in the first quarter
The 18 city hospitals with patient guarantees, having received 111.1 billion TL in 2025, continued to drain the budget in 2026. The Ministry transferred 35.2 billion TL to city hospital contractors during the January–March 2026 period.
Total tax debt written off over 18 years amounts to 200 billion dollars
Another cause for concern is that the total amount of tax debt written off for affiliated holding companies over the last 18 years has reached 200 billion dollars… Yİ Party Bursa MP Selçuk Türkoğlu revealed that the total tax debt of five major companies, amounting to 200 billion dollars, had been written off over the last 18 years. Türkoğlu stated, “Tax exemptions were granted to Kolin 36 times, Cengiz 30 times, Makyol 24 times, Kalyon 19 times and Limak 19 times.”
25 per cent increase in electricity and natural gas prices
Last week, consumers’ budgets were shaken once again by increases in electricity and natural gas prices. In a statement from the Energy Market Regulatory Authority (EPDK), it was announced that a 25 per cent increase had been applied to household electricity, a 17.5 per cent increase to low-voltage commercial premises and offices, a 5.8 per cent increase to medium-voltage industrial subscribers, and a 24.8 per cent increase to medium-voltage agricultural activity subscribers.
The statement cited an example, noting that “the electricity bill for a household consuming 100 kWh would amount to 323.8 TL”.
The same statement noted that BOTAŞ had also published its monthly tariff, announcing that an average increase of 25 per cent had been applied to natural gas used by residential consumers, 18.61 per cent for industrial subscribers, and 19.42 per cent for natural gas used by electricity generation plants.
The 25 per cent increase in electricity and natural gas prices is expected to drive up the costs of goods and services, whilst the rise is also expected to intensify inflationary pressure. However, due to a change in the weighting within the Consumer Price Index (CPI), its impact on inflation will decrease from 0.92 percentage points to 0.59 percentage points.
EMO: Distribution charges have become a veritable black hole
Alongside the 25% increase, which has been criticised by experts on the grounds that “electricity distribution charges are being passed on to the public”, the way has been paved for companies to boost their profits.
The Turkish Chamber of Electrical Engineers (TMMOB EMO) issued a statement regarding the price hikes on energy. According to the Association’s calculations, assuming a family of four would consume 230 kWh of energy per month to maintain a minimum standard of living, the cost of this consumption—which averages less than 8 kWh per day—has risen from 595.8 TL to 744.7 TL following this increase.
The Association’s statement continued as follows: “Whilst subscribers not exceeding the annual 4,000 kWh limit are directly affected by the price hike, the unit price for the higher tier has increased by 17.4% to 1.895808 TL, and the distribution charge has risen by 32% to 2.4249 TL. Consequently, a total increase of 25 per cent has been reflected in residential bills. 744.7 TL According to EMO calculations, the 595.8 TL paid by a family of four for a minimum monthly consumption of 230 kWh has risen to 744.7 TL following this increase. As of April 2026, only 15.2 per cent of the bill consists of the energy charge, whilst 74.8 per cent is made up of the distribution charge. It is unacceptable that the share of the distribution charge, which stood at 22 per cent of the bill in 2022, has risen to nearly 75 per cent.
They have poured billions into street and road lighting
Meanwhile, as the public sector withdrew from electricity generation and distribution following privatisation, attention has once again turned to the funds channelled to electricity distribution companies following the price hike. Between 2018 and 2026, the funds transferred to electricity companies reached 120.2 billion TL.
The funds transferred by the Ministry of Energy and Natural Resources to electricity distribution companies under the heading of “General Lighting Payment” in return for the lighting of streets and avenues reached a total of 120 billion 267 million 534 thousand TL during the 2018–2025 period.
The amount paid from the budget to electricity distribution companies, which stood at 1.8 billion TL in 2018, soared to 36.5 billion TL in 2025.
World Bank lowers growth forecast for Turkey
In its Global Economic Outlook report, the World Bank has lowered its growth forecasts for Turkey due to rising geopolitical risks and global uncertainties. The Bank has revised its 2026 growth forecast for Turkey from 3.7 per cent to 2.8 per cent, and its 2027 growth forecast from 4.4 per cent to 3.7 per cent. Whilst it was emphasised that integration into global markets and a resilient private sector structure were key factors in this performance, it was noted that the share of high-tech products in manufacturing exports having remained flat at around 5 per cent over the past decade indicates that further steps are required to transition to more advanced technology and knowledge-intensive production.
The World Bank has lowered its growth forecast for South Asia this year from 7.0 per cent to 6.3 per cent. The Bank noted that South Asia’s outlook remains fragile due to the Middle East conflict, financial turbulence, climate shocks and risks related to artificial intelligence in services exports. It has kept its growth forecast for China at 4.2 per cent for 2026. India’s economic growth for 2026 and 2027 has been revised upwards from 6.3 per cent to 6.6 per cent.
JPMorgan raises inflation and interest rate forecasts
US-based investment bank JPMorgan, in a report on the Turkish economy, highlighted the risks posed by rising energy prices and predicted that high interest rates could persist for longer than expected. JPMorgan noted that rising energy prices are increasing pressure on inflation and predicted that interest rates in Turkey could remain high for longer than expected. The bank also raised its year-end inflation forecast for Turkey to 28 per cent.
Prof. Dr. Ulusoy: What is happening today is a warning; the good days may be behind us!
Veysel Ulusoy, founder of ENAG, highlighted the high rate of monthly inflation. He noted that energy costs and exchange rate pressures are creating new risks for the economy. Ulusoy said, “What is happening today is, in fact, a warning. And unfortunately, if we do not take this warning seriously enough, the period we refer to as ‘the good days’ may truly be behind us.”
According to a report in Nefes newspaper, Prof. Dr Veysel Ulusoy emphasised that the fact prices are still rising by between 3 and 5 per cent monthly constitutes a very severe situation in itself, adding, “A monthly increase at these levels translates to very significant pressure on an annual basis.” Ulusoy noted that rising energy bills would widen the current account deficit, increase the need for foreign exchange, make price formation more difficult, and lead to a rise in bankruptcies.
Prof. Dr. Veysel Ulusoy commented on the latest developments in the Turkish economy. Prof. Dr. Ulusoy said, “The vegetable prices we are seeing in the market today are actually just the beginning. A significant part of the problem stems from structural choices that have been accumulating for a long time. Agriculture has been treated almost like a stepchild for years. Producers were not sufficiently supported, no planning was done, and costs could not be brought under control. On top of that, with the addition of a foreign exchange-dependent input structure, every currency movement now directly impacts the dinner table. On the income side, however, people are not being protected at the same pace. Whilst wages may appear to be rising, their real-world value is steadily eroding. Unless strong, long-term policies are implemented to change this situation, the coming period will be even more difficult for citizens,” he said.
Prof. Dr. Yılmaz: There is a 100% deviation in inflation
TEPAV Centre Director and economist Prof. Dr. Hakkı Hakan Yılmaz, referring to the March inflation figures released by TÜİK, stated: “TÜİK announced consumer inflation for March as 1.94 per cent. Accordingly, three-month inflation stood at 10.04 per cent, and the annual inflation rate was 30.87 per cent. ‘In particular, the fact that the increase in food prices—which carry significant weight in the index—stood at 1.80 per cent in March, whilst the housing group remained at 1.90 per cent, raises fundamental questions. In an environment where price increases in the markets are approaching nearly 10 per cent, a 1.80 per cent rise in food prices is simply incomprehensible,’ he said. Recalling that the inflation forecast for 2026 in the Medium-Term Programme (MTP) was 16 per cent, Yılmaz said, “The Central Bank has also maintained this. By the end of the first quarter, there is a deviation of nearly 100 per cent from the target.”
Oil and natural gas prices will have an impact
Drawing attention to the rise in oil and natural gas prices, Yılmaz stated, “If upward movements in the food sector due to rising costs and pricing behaviour in other sectors continue alongside the increase in oil and natural gas prices, it would not be misleading to say that inflation could reach the 30–32 per cent range by the end of 2026, even under the medium-scenario.”
DİSK-AR: Workers are working to keep up with inflation
The DİSK-AR report revealed that workers’ wages eroded rapidly in the first three months of the year, caught between inflation and taxes. As workers’ income evaporated, the total loss reached 393.9 billion lira. A minimum-wage earner lost 2,819 lira in March alone.
The report stated: “High inflation, coupled with unfair taxes and deductions, continues to erode workers’ wages.” Inflation and taxes were responsible for a significant portion of the erosion in workers’ wages. In March alone, the cumulative total cost of inflation on insured workers’ wages amounted to 189 billion lira. The total cost of income and stamp duties also reached 204.9 billion lira.
Minimum Wage Initiative: If everything else gets a pay rise, the minimum wage must be increased again
In a statement made prior to the submission of petitions—which include demands for legislative changes to provide for the minimum wage to be updated four times a year—to the Turkish Grand National Assembly (TBMM) on behalf of the Minimum Wage Initiative, formed by bringing together representatives from numerous political parties and civil society organisations, “We refuse to accept that the cost of fighting inflation is being borne by millions of workers at the expense of condemning them to hunger and poverty. As the Minimum Wage Initiative, we are raising our voices in the struggle for a further increase in the minimum wage: If there are price hikes on fuel, food, rent and everything else, then there must be a further increase in the minimum wage!” it was stated.
Central Bank sold 50 billion dollars in foreign exchange during the war period
Since the start of 2025, following the withdrawal of the vast majority of foreign portfolio inflows into Turkey during the war period, the Central Bank sold 49.2 billion dollars in foreign exchange from its reserves to counter this outflow.
According to a report by Şebnem Turhan in Ekonomim newspaper, the Central Bank, seeking to mitigate the war’s impact on the Turkish lira in the Middle East, carried out substantial foreign exchange sales primarily to counter foreign outflows. According to calculations by QNB Turkey economists, 49.2 billion dollars’ worth of foreign exchange was sold from the start of the war until the week ending 3 April. Although the TL-for-foreign-exchange swap transactions initiated with banks last week led to the first increase in gross and net international reserves since the start of the war, net reserves excluding swaps fell by 1.8 billion dollars last week to 18.4 billion dollars. This level marks the lowest seen since May 2025.
Ali Babacan, leader of the DEVA Party, stated that the Central Bank had sold 49 billion dollars’ worth of reserves over the past 40 days.
The net foreign exchange deficit of firms borrowing from abroad stands at 197 billion dollars
Economist Mustafa Sönmez, however, drew attention to a different issue, questioning whether firms had been caught off guard by the war. In a comment on social media, Mustafa Sönmez said, “Having observed Finance Minister Mehmet Şimşek’s pressure on the dollar, the net foreign exchange deficit of firms borrowing from abroad is close to 200 billion dollars. This figure stood at 72 billion dollars when Şimşek took office. The deficit, which stood at 102 billion dollars in Şimşek’s first year, has now exceeded 197 billion dollars as we enter 2026,” he said.
IMF: War will drive up inflation and slow growth
IMF Managing Director Kristalina Georgieva warned that the war in the Middle East would disrupt energy supplies, thereby driving up global inflation and slowing growth. Georgieva explained that the war would trigger a cycle of higher inflation and slower growth in the global economy. Speaking ahead of the IMF and World Bank Spring Meetings, Georgieva emphasised that the war had caused one of the greatest disruptions to energy supply in history.
Georgieva noted that even if the hostilities were to end swiftly, the IMF would revise its growth forecast downwards and its inflation forecast upwards in the global economic projections to be released next week. Georgieva stated that global oil supply had fallen by 13 per cent, with this also affecting linked supply chains such as helium and fertilisers.
IEA Director Birol: The current crisis is of a more serious magnitude than the sum of all previous crises
IEA Director Fatih Birol stated that the disruption in the Strait of Hormuz is one of the largest energy supply shocks in history, saying, “The current crisis is of a more serious magnitude than the sum of the 1973, 1979 and 2002 crises.” In an interview with the French newspaper Le Figaro, Birol said, “The world has never experienced an energy supply disruption of this magnitude. The sharp rise in energy prices has triggered food price increases and accelerated global inflationary pressures. Low-income economies have been left defenceless against this ‘double shock’.”
Referring to the geographical impacts of the crisis, Birol highlighted Europe, Japan and Australia as countries set to face serious challenges. However, he noted that the greatest risk is concentrated on developing countries.
‘Potential sharp increases in fuel and food prices are cause for concern’
The effects of the war in the Middle East on the global economy and food security are high on the agenda of international institutions. The heads of the International Monetary Fund (IMF), the World Bank and the World Food Programme (WFP) met to discuss the impact of the war in the Middle East. They issued the following statement:
“The war in the Middle East is devastating lives and livelihoods in the region and beyond. It has triggered one of the largest disruptions in global energy markets in modern history. Sharp rises in oil, gas and fertiliser prices, combined with transport bottlenecks, will inevitably lead to higher food prices and food insecurity.
This burden will be felt most acutely by the world’s most vulnerable populations, particularly in low-income, import-dependent economies. Sudden increases in fuel prices and potential sharp rises in food prices are of particular concern where fiscal space is limited and debt burdens are already high; this situation reduces governments’ ability to protect vulnerable households.
“In line with our respective mandates and building on existing intervention mechanisms, we will provide support to safeguard lives and livelihoods and lay the foundations for a resilient recovery that fosters stability, growth and employment.”
IMF: Rise in defence spending fuels inflation and creates significant challenges
The IMF’s World Economic Outlook, April report, to be published on 14 April during the IMF-World Bank Spring Meetings taking place from 13–18 April, highlights the rise in military spending and the resulting fiscal deficits.
In the second section of the report, titled ‘Defence Expenditure: Macroeconomic Implications and Trade-offs’, published by the IMF ahead of the meetings, attention is drawn to the rise in defence spending amidst intensifying geopolitical tensions. This section includes the following statements: “Large surges in defence spending are becoming more frequent, particularly in emerging market and developing economies.
In a typical surge, defence spending rises by approximately 2.7 percentage points of GDP within two and a half years, with roughly two-thirds of this financed by a budget deficit. Whilst an increase in defence spending may boost economic activity in the short term, it also temporarily drives up inflation and creates significant challenges in the medium term. Fiscal deficits worsen by approximately 2.6 percentage points of GDP, public debt rises by around 7 percentage points within three years, and external balances deteriorate. Wartime surges are particularly costly; public debt rises by approximately 14 percentage points and social spending falls.”