Economy
Gold’s safe haven status challenged amid Middle East war
Gold is known as a top safe haven asset in times of volatility, but with the war in the Middle East, this classic standing has been challenged as investment volumes fell in the first quarter, industry data showed Wednesday, as the conflict forced some investors to liquidate holdings to raise cash.
Investment volumes fell by 5% during the quarter, according to the World Gold Council (WGC), despite gold having set a record high in January as investors sought refuge from a weak dollar and U.S. President Donald Trump’s erratic policy shifts.
“Hefty outflows in March reversed much of the sizable January and February inflows” into gold exchange-traded funds (ETFs), an easy means to invest in the precious metal, the council said in its quarterly report.
And that was linked in particular to North American funds.
“Oftentimes, because gold is so widely accepted, it is the first thing that you sell when you need a certain access to cash or to liquidity,” said World Gold Council expert Juan Carlos Artigas.
Following the U.S.-Israeli attacks on Iran at the end of February, Tehran closed traffic through the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas (LNG) normally flows.
That sent oil and gas prices rocketing higher and disrupting markets, forcing many investors to raise cash to settle their positions.
The prospect of the U.S. Federal Reserve (Fed) raising interest rates in response to higher inflation boosted the dollar, making gold more expensive for investors who don’t hold dollars.
If demand for gold dropped by volume, the value of purchases jumped by 62%.
Gold touched a new record just shy of $5,600 per ounce at the end of January, and averaged $4,873 per ounce over the quarter.
High prices, driven largely by investment holdings, hit demand for jewellery, however.
The jewelry market was also disrupted by the war, with the Middle East a key shipping hub.
Türkiye has informed Canada that it will participate in the Defense Security and Resilience Bank (DSRB) as a founding member, a report said on Monday
Canadian Prime Minister Mark Carney said at a NATO summit in Ankara last week that nine countries, including Türkiye, had committed to the bank, in what was seen as a boost for the multilateral drive to help rearm allied nations.
Defense Ministry sources said over the weekend that Türkiye was still evaluating possible participation.
“Türkiye has informed Canada that it will participate in the bank,” a Turkish official told Reuters on Monday.
According to Carney’s statement last week, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Türkiye and Ukraine had all pledged their support to the bank, which will be based in Canada.
The roster contained no heavyweight G-7 nations other than Canada, potentially limiting the bank’s financial firepower, although Canada’s foreign minister, Anita Anand, told Reuters it would remain open to new members.
The bank’s purpose is to bolster the defense of like-minded allied nations by raising up to 100 billion pounds ($134 billion) in cheap financing.
Carney is promoting the DSRB as part of his call this year for an alliance of “middle powers” to combat what he sees as the fracturing of the traditional U.S.-led world order.
A group of former NATO security advisers, senior ex-military personnel and bankers proposed the bank in 2024.
NATO nations and their allies are grappling with rising defense demands linked to the war in Ukraine, growing tensions with Russia and concerns about China’s military expansion.
NATO leaders agreed in June 2025 to spend 5% of GDP on defense and security-related investments by 2035.
Top banks, including JPMorgan, Deutsche Bank, Commerzbank and ING, have joined the project alongside Canada’s RBC, BMO, CIBC, National Bank of Canada, Scotiabank and TD Bank.
Europe has relied on jet fuel imports from the U.S. and Asia, boosted refinery output and tapped stockpiles to keep aircraft in the air. And yet it remains the region most vulnerable as renewed tensions in the Middle East increase the risk of further supply disruptions.
Britain, France and Germany are particularly exposed in a continent where decades of refinery closures left it more reliant than most on Middle Eastern shipments via the Strait of Hormuz.
The Strait, conduit for around a fifth of the world’s seaborne oil and liquefied natural gas until U.S.-Israeli airstrikes unleashed a war on Iran at the end of February, partly reopened in June.
In July, however, a fragile truce has come under threat from strikes by both sides.
Data from consultancy Energy Aspects dated June 18 already anticipates a supply deficit across Europe of nearly 600,000 barrels per day in the third quarter, against surpluses of 116,000 bpd in the United States and 425,000 bpd in Asia-Pacific.
Inventories stood at 38 million barrels at the start of June, compared with 99 million in the United States, Energy Aspects said. That leaves Europe with less than 30 days of demand cover, Reuters calculations show – the tightest of the major jet fuel markets.
The most recent data available from the International Energy Agency’s (IEA) latest monthly report, showed provisionally jet fuel stocks were 10% higher year-over-year at the end of May, while refinery output rose 30%. The figures also implied only a month of leeway.
“We still do expect some tightness through August at this rate,” said Janiv Shah, analyst at Rystad.
The European Commission has also acknowledged the situation could get worse.
EU Energy Commissioner Dan Jorgensen said in June the bloc faced tighter jet fuel stocks toward the end of the summer holiday season and that Brussels would coordinate releases of national reserves if needed.
Cargo from Canada to South Korea
Until war broke out at the end of February, Europe had relied on the Middle East for around half of its jet fuel imports.
In March, analysts had expected African countries, which sourced nearly all their jet fuel from the Middle East, to be the hardest hit.
However, they have managed to increased imports from Nigeria’s Dangote refinery, as well as India and Oman, according to data from commodities intelligence firm Kpler.
Europe, meanwhile, has so far prevented supplies running out by turning to new sellers, such as Canada.
In June, Europe overall imported 673,000 bpd of jet fuel, its highest since October 2025, Kpler data showed.
The U.S. and Nigeria were the biggest exporters to Europe, but Kuwait, Canada, India and South Korea also provided cargoes.
Imports from India in June reached their highest since February and nearly 25,000 bpd Kuwaiti barrels are due to arrive in August for the first time since early March through a ship-to-ship transfer on the ship Proteus Harvonne.
Before flows were interrupted, Kuwait was one of the biggest suppliers of jet fuel to the region.
Among those who increased production to ease the strain, Italian refiners increased jet fuel production by 10% in the first four months of the year.
The countries’ imports fell 6%, enabling domestic production to meet nearly 70% of demand in March and April, according to UNEM, Italy’s fuel producers’ association.
Eni, which accounts for around half of Italy’s jet fuel production capacity, boosted output by importing semifinished products from outside Europe, industry sources said.
Jet fuel prices in northwest Europe, meanwhile, have fallen to around $133.27 a barrel from a record $215.32 at the end of March, easing pressure on airlines. Fuel typically accounts for between 20% and 25% of operating costs.
Immediate discounts to air ticket prices are unlikely, analysts say, as demand is strong and capacity is limited, especially after many carriers cut flights to maximize fuel supplies.
Türkiye’s southeastern Diyarbakır Basin has the long-term potential to produce up to 250,000 barrels of oil per day (bpd), the chair of U.S. energy company TransAtlantic Petroleum said on Monday.
Türkiye currently consumes about 1 million barrels of oil per day, meaning the projected production from the Diyarbakır Basin could cover roughly one-quarter of national demand.
Potential daily gas production from the basin could be around 25 million cubic meters, TransAtlantic Petroleum CEO Malone Mitchell III told Anadolu Agency (AA) on the sidelines of an energy conference in Istanbul.
“Quite nice production, 25 to 50 million. That would be a substantial portion of Türkiye’s internal demand,” Mitchell said.
He said the full potential of the Diyarbakır Basin is difficult to quantify precisely as productivity is expected to vary across different parts of the play, but added that it could ultimately host more wells than all those currently operating across Türkiye.
“It certainly might represent more wells than all of the current wells that are in the country of Türkiye,” Mitchell said, noting that such a scenario would likely unfold over around 20 years.
He added that output is expected to build gradually over the first five years before reaching what he described as “a mature running level.”
The projection highlights the scale of unconventional oil and gas resources that industry players believe could be unlocked in the basin, one of Türkiye’s key exploration areas alongside the Thrace Basin in the country’s northwest.
Last year, Mitchell’s Texas-based oil and gas company entered into a joint venture with state-run Turkish Petroleum Corporation (TPAO) and Oklahoma-based Continental Resources to pursue unconventional opportunities in the Diyarbakır Basin.
Preliminary assessments by the Energy and Natural Resources Ministry and Continental Resources indicate the basin could hold 6.1 billion barrels of oil.
Energy and Natural Resources Minister Alparslan Bayraktar last year said they estimate the Diyarbakır Basin spans around 7,000 square kilometers and noted that they plan to drill 24 wells over three years as part of a horizontal drilling program.
Mitchell said the partnership aims to transfer the know-how, capital and operational experience gained from nearly two decades of unconventional production growth in North America to Türkiye, noting that such developments remain relatively rare outside those markets.
If development proceeds as expected, activity in the Diyarbakır Basin is set to ramp up significantly over the next several years.
“Probably five years from now, we will see 25 rigs drilling in the unconventional,” Mitchell said.
He said horizontal drilling techniques would allow operators to access large underground areas while minimizing the footprint on agricultural land.
“Each rig, because it would be drilling horizontally, would be as productive as four or five vertical wells,” he said.
Türkiye becoming increasingly important
Mitchell said that Türkiye’s strategic location and stability are becoming increasingly important as geopolitical tensions reshape global energy markets.
“It is the crossroads of energy, and it has become more important as the conflict in Ukraine and the area cut off part of the northern hub. Then the southern hub became more important,” he said.
He added that ongoing energy crises are fragmenting global energy flows, putting Türkiye in a position to exhibit stability in an increasingly unstable world.
Drawing on nearly two decades of experience in the country, Mitchell said Türkiye offers a reliable environment for international investors.
“What we have learned over 18 years is that the legal system works, the regulatory system works, we can rely on the banking system to be able to transfer money to make payments,” he said.
The CEO said he has advised U.S. policymakers and energy executives that while Türkiye may not have the largest resource base, its stability makes it an attractive hub for regional energy operations.
He added that the company’s operations in Türkiye have helped establish its credibility as it expands into new markets, with potential partners often encouraged to seek references from Turkish authorities.
Mitchell pointed to Uzbekistan as one of the countries the company has moved into, noting that Turkish contractors already play a key role in the country’s economic development, creating opportunities for its services.
Partnership with TPAO top priority
Although the company is exploring opportunities elsewhere, Mitchell said its partnership with TPAO remains its top priority.
He said the joint venture represents the company’s largest global opportunity, prompting it to scale back other activities to focus on the fastest path to success.
“To a certain degree, we are limiting the other things we do so that we can make sure there is the greatest, fastest path to success,” Mitchell said.
“Right now, probably the No. 1 opportunity set we have, maybe worldwide, is our joint venture with Turkish Petroleum,” he said, adding that success could pave the way for further collaboration.
“That is probably the most important relationship that we have and what we see as an opportunity set worldwide for our company right now,” Mitchell added.
Retail sales growth in Türkiye accelerated in May after slowing in April, official data showed on Monday.
Retail sales volume rose 13.7% year-over-year in May, supported by strong growth in non-food purchases, the Turkish Statistical Institute (TurkStat) said.
The volume had jumped 11.7% in April, its weakest pace since March 2025.
Growth in sales of non-food products, excluding fuel, accelerated to 17.5% from 14.8%, the data showed.
Food sales growth picked up to 9.1% from 7.8%. Sales of automotive fuel increased 3.2% from a year earlier.
Sales of computers, books and telecommunications equipment recorded the strongest increase, climbing 23.5%, followed by a 17.6% rise in textiles, clothing and footwear.
Online retail sales rose 16.2% year-over-year, although that was slower than April’s 18.8% increase.
On a monthly basis, retail sales increased 2.4% in May, rebounding from a 1.6% decline in April.
Sales of computers, books and telecommunications equipment rose 3.7%, while textiles, clothing and footwear increased 2.9%.
Despite the strength in retail activity, overall trade sales volume declined 1.4% annually, mainly due to a 7.8% fall in wholesale trade.
Total trade sales increased 0.7% month-over-month, while wholesale trade sales fell 0.6%.
Türkiye’s exports to 18 countries classified under its “Distant Countries Strategy” surged by 12.2% on an annual basis to hit $14.3 billion (TL 671.88 billion) in the first half of the year, according to a report on Sunday.
The countries on the list include major trading partners such as the U.S., but also countries including China, Japan, Pakistan, Canada, India and Australia.
The positive momentum in the shipments to distant markets in the January-June period came despite global tensions and the outbreak of the U.S.-Israel-Iran war, bolstering the overall picture for Turkish exports.
The Russia-Ukraine war, which has now stretched nearly 4.5 years, Israel’s attacks on Palestine and Lebanon to the south, and most recently, the Iran war, have negatively affected the global economy and trade corridors.
Combined with the economic slowdown in Europe, these developments have prompted Turkish exporters to diversify their export markets.
Against this backdrop, the importance of the Trade Ministry’s Distant Countries Strategy, launched to increase Türkiye’s share of imports from 18 countries that together account for more than half of the global economy, has grown further.
Accordingly, Turkish exporters have intensified engagement with these markets under the strategy, and these efforts have been reflected in export figures.
Exports to 18 countries exceed $14 billion
As such, data compiled by Anadolu Agency (AA) from the Türkiye Exporters Assembly (TIM) reveals that exports to the 18 target countries increased 12.2% year-on-year to $14.35 billion, up from $12.78 billion in the same period last year.
The United States ranked first, with exports totaling $6.97 billion, accounting for nearly half, or 48%, of Türkiye’s total exports to the 18 target countries.
The U.S. was followed by China with $1.81 billion, Mexico at $641.7 million, Canada at $640.2 million and India at $580.4 million.
Moreover, Nigeria recorded the strongest export growth in the first half of the year, with shipments surging 62.4% year-on-year.
It was followed by Indonesia (57.1%), South Africa (36%), China (32.7%) and Mexico (17.6%), respectively.
Chemicals led exports to the U.S.
Breaking down exports to the U.S. during the January-June period, the chemicals and chemical products sector ranked first with $725.4 million in exports. It was closely followed by electrical and electronics, whose shipment volume totaled $679.2 million and the automotive industry, at $607.2 million.
For exports to China, mining products dominated with $1 billion, followed by chemicals and chemical products ($362.4 million) and textiles and raw materials ($87.8 million).
In Mexico, Türkiye’s third-largest export destination among the target countries, jewelry ranked first with $178.2 million, followed by the automotive industry ($114 million) and steel ($73.1 million).
Launched by the Trade Ministry in 2022, the Distant Countries Strategy covers the U.S., Australia, Brazil, China, Indonesia, the Philippines, South Africa, South Korea, India, Japan, Canada, Malaysia, Mexico, Nigeria, Pakistan, Chile, the island of Taiwan and Vietnam.
The Turkish ship and yacht industry registered $1.5 billion (TL 70.48 billion) in exports in the first half of the year, and the sector leaders aim to catch a new record by the end of the year, according to a report on Sunday.
Mustafa Talha Pepe, chairperson of the Board of the Ship, Yacht and Services Exporters’ Association (GYHIB), said the Turkish ship, yacht and services sector generated $1.5 billion in exports in the first six months of the year, adding that the industry aims to set a new record by reaching between $2.5 billion and $3 billion in exports by year-end.
Speaking to Anadolu Agency (AA), Pepe said the increase in exports was largely driven by deliveries of fishing vessels, special-purpose ships and tugboats to Northern European countries, underscoring that the sector continues to strengthen its competitiveness in international markets.
“We reached $1.5 billion in exports in the first half of the year. By the end of this year, we aim to break a new record and achieve exports of between $2.5 billion and $3 billion,” he said.
Pepe noted that much of the first-half performance stemmed from deliveries under contracts signed two to three years ago, adding that the country’s shipbuilding industry has made significant progress in recent years.
He said GYHIB is actively promoting the sector abroad by participating in shipbuilding and yacht exhibitions across Europe and organizing one-on-one business meetings.
“First and foremost, wherever we see potential, we fly our country’s flag before our association’s flag, and we are proud of that,” Pepe said. “We regularly attend trade fairs across Europe for both ships and yachts, and we do our best to promote both our industry and our country.”
He said the association visited Greece last month and is expected to participate in trade fairs in Germany and France in September and October.
“We try to represent both our country and our sector wherever opportunities arise. Borders and distances are not important to us, as long as there is an opportunity,” he added.
Pepe also pointed to a slight decline in shipyards’ order books compared to previous years, stressing that continued incentives and support mechanisms are essential for the sector to further expand its potential.
High value-added industry
Describing shipbuilding and yacht manufacturing as one of Türkiye’s highest value-added export industries, Pepe said the sector generates an average export value of around $25 per kilogram, making it one of the country’s most valuable export segments.
“I believe our industry is among those with the highest added value and makes a significant contribution to the overall value of Türkiye’s exports,” he said.
Pepe also suggested that export growth has had a positive impact on employment, domestic suppliers and local manufacturing.
Local production strengthens competitiveness
Moreover, he emphasized that increasing the share of locally produced components has significantly boosted the industry’s export performance.
He said the COVID-19 pandemic exposed the vulnerabilities of globally interconnected supply chains, encouraging Turkish shipbuilders to rely more heavily on domestic suppliers.
“In shipbuilding and yacht construction, we are trying to show customers that by maximizing domestic supplier inputs and reducing dependence on imported materials, we can ensure a smoother and more reliable delivery process,” he said.
“As a result, the contribution of domestic suppliers and local production is extremely important and is becoming more valuable every day. End users also appreciate having this option,” he added.
Green shipbuilding gains momentum
Furthermore, Pepe said the industry has rapidly adapted to the transition toward sustainable shipping, noting that more than half of the vessels currently built in Turkish shipyards are equipped with electric or LNG-powered environmentally friendly technologies.
He added that production of green vessels for Northern European markets has increased as Turkish shipbuilders closely follow the global transformation of the maritime industry and adjust their production accordingly.
Looking ahead, Pepe said the industry’s top priority is to preserve the market share it has built in Europe over the years.
He also underscored that continued support for the sector will be crucial to maintaining Türkiye’s strong position in fishing vessels, ferries, tugboats and special-purpose ships.
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