Türkiye’s Minister Warns Mideast War Shock Is 2x 1973-74 Oil Embargo
(MENAFN) Mehmet Simsek, Türkiye’s Treasury and Finance Minister, said Saturday that the Middle East war will permanently alter the region’s economic and security order, pushing governments to cut strategic dependencies, open new trade routes and deepen regional cooperation.
Addressing a panel at a state broadcaster’s World Forum, “Towards a Rocky Recovery: National Economies After the Wars in the Middle East,” Simsek said the conflict has produced a severe supply shock, hitting energy markets hardest, with effects reaching far beyond the region.
“The one that we have been experiencing is two times the 1973-74 oil embargo and seven times the Russia-Ukraine energy destruction,” he said, referring to the scale of the disruption.
Recession, slower growth and a stark warning on peace
Simsek said much of the region is already in recession, and front-line countries have seen exports and imports fall sharply. Worldwide, he said, growth has cooled and financial conditions have tightened as inflation climbed, driven in part by the fighting.
He cited an International Monetary Fund (IMF) analysis of 170 conflicts since 1946, which found that wars typically cost economies between 3% and 7% of output. He added that a lasting recovery hinges on lasting peace.
“If there is no durable peace, it would be very hard to talk about a durable recovery,” he said.
Shipping chokepoints push governments to rethink
According to Simsek, the war will force countries to reassess their exposure to critical maritime passages such as the Strait of Hormuz. He expects governments to direct more money into alternative trade corridors, infrastructure, energy security and regional connectivity to guard against future shocks.
He also called for tighter economic integration across the Middle East and North Africa (MENA), where trade between countries in the region remains thin by global standards. By his comparison, intra-regional trade makes up roughly 67% of commerce in Europe and 59% in East Asia and the Pacific, but only 15% in Latin America and the Caribbean. He said economic diversification would be key to lifting trade within MENA.
Türkiye’s trade network and diplomatic push
Simsek said Ankara remains committed to rules-based trade and regional economic integration despite rising protectionism worldwide. Türkiye has signed 54 free trade agreements covering nearly 70% of its exports, and is negotiating new-generation deals with Japan, Indonesia, the Gulf Cooperation Council and Canada.
He pointed to Türkiye’s part in regional connectivity projects, including the Middle Corridor linking Beijing to London and the Development Road, which would connect the Gulf and Iraq with Türkiye and European markets.
On diplomacy, Simsek said Türkiye is working on the Armenia-Azerbaijan peace agreement, helping facilitate talks between Russia and Ukraine, and taking part in efforts to end the war in Gaza.
Defense industry cited as a strategic asset
Investment in peace, he stressed, must go hand in hand with stronger defense capabilities. Türkiye’s defense sector, which spans about 4,000 companies and between 1,400 and 1,500 active projects, is gaining weight as a national asset.
Simsek said orders for Turkish defense equipment reached roughly $18 billion last year, placing the country 11th among the world’s defense exporters.
He also flagged a role for Türkiye in postwar rebuilding, estimating that reconstruction needs in conflict-hit neighboring regions could reach at least $1 trillion over the next decade.
Closing his remarks, Simsek said Türkiye’s industrial base, infrastructure and growing services sector leave it well placed to gain from deeper regional integration.
“Wars are not in our interest. We benefit most from stability, peace, and prosperity in the region,” he said.
Addressing a panel at a state broadcaster’s World Forum, “Towards a Rocky Recovery: National Economies After the Wars in the Middle East,” Simsek said the conflict has produced a severe supply shock, hitting energy markets hardest, with effects reaching far beyond the region.
“The one that we have been experiencing is two times the 1973-74 oil embargo and seven times the Russia-Ukraine energy destruction,” he said, referring to the scale of the disruption.
Recession, slower growth and a stark warning on peace
Simsek said much of the region is already in recession, and front-line countries have seen exports and imports fall sharply. Worldwide, he said, growth has cooled and financial conditions have tightened as inflation climbed, driven in part by the fighting.
He cited an International Monetary Fund (IMF) analysis of 170 conflicts since 1946, which found that wars typically cost economies between 3% and 7% of output. He added that a lasting recovery hinges on lasting peace.
“If there is no durable peace, it would be very hard to talk about a durable recovery,” he said.
Shipping chokepoints push governments to rethink
According to Simsek, the war will force countries to reassess their exposure to critical maritime passages such as the Strait of Hormuz. He expects governments to direct more money into alternative trade corridors, infrastructure, energy security and regional connectivity to guard against future shocks.
He also called for tighter economic integration across the Middle East and North Africa (MENA), where trade between countries in the region remains thin by global standards. By his comparison, intra-regional trade makes up roughly 67% of commerce in Europe and 59% in East Asia and the Pacific, but only 15% in Latin America and the Caribbean. He said economic diversification would be key to lifting trade within MENA.
Türkiye’s trade network and diplomatic push
Simsek said Ankara remains committed to rules-based trade and regional economic integration despite rising protectionism worldwide. Türkiye has signed 54 free trade agreements covering nearly 70% of its exports, and is negotiating new-generation deals with Japan, Indonesia, the Gulf Cooperation Council and Canada.
He pointed to Türkiye’s part in regional connectivity projects, including the Middle Corridor linking Beijing to London and the Development Road, which would connect the Gulf and Iraq with Türkiye and European markets.
On diplomacy, Simsek said Türkiye is working on the Armenia-Azerbaijan peace agreement, helping facilitate talks between Russia and Ukraine, and taking part in efforts to end the war in Gaza.
Defense industry cited as a strategic asset
Investment in peace, he stressed, must go hand in hand with stronger defense capabilities. Türkiye’s defense sector, which spans about 4,000 companies and between 1,400 and 1,500 active projects, is gaining weight as a national asset.
Simsek said orders for Turkish defense equipment reached roughly $18 billion last year, placing the country 11th among the world’s defense exporters.
He also flagged a role for Türkiye in postwar rebuilding, estimating that reconstruction needs in conflict-hit neighboring regions could reach at least $1 trillion over the next decade.
Closing his remarks, Simsek said Türkiye’s industrial base, infrastructure and growing services sector leave it well placed to gain from deeper regional integration.
“Wars are not in our interest. We benefit most from stability, peace, and prosperity in the region,” he said.
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