Target $150 for Oil: Şimşek’s Economic Program is Dead | Atilla Yesilada
mehmet simsek2
According to President Trump, the war with Iran will last at least six weeks, but independent military experts are now projecting a conflict of at least three months. During this period, Iran is not only targeting U.S. and Israeli military assets but is also striking critical energy production and distribution facilities while effectively blocking all tanker traffic through the Strait of Hormuz. The Qatari Energy Minister has warned that within a single week, the production of oil, natural gas, and chemical fertilizers in the Gulf could grind to a complete halt. The Minister further cautioned that Brent crude could skyrocket to $150 per barrel.
The Greatest Energy Shock Since the 1970s
The global economy, followed closely by Turkey, is about to be hit by the most significant energy shock observed since the 1970s. As the world drifts toward stagflation, inflation in Turkey is set to flare up once again. Under these conditions, the Central Bank of the Republic of Turkey (TCMB) has lost its window to cut interest rates. Furthermore, the re-implementation of the “Eşel Mobil” (sliding scale) system for fuel and the continued subsidization of natural gas prices will inevitably cause the budget deficit to spiral out of control.
Markets in the Crosshairs
While the TCMB is expected to hold the Turkish Lira steady against the USD even in the worst-case scenarios—preventing a currency collapse—the cost will be felt elsewhere. Significant losses are mounting in the Borsa Istanbul (BIST) and Domestic Government Debt Securities (GDDS) markets. Investors are bracing for a prolonged period of high volatility as the “rational” economic program led by Mehmet Şimşek faces its most existential challenge to date.
