1.3 Billion Cubic Meters on Hold: U.S. Sanctions Halt Turkmenistan's Gas Exports to Turkey

Central Asia Column “Steppe Ahead”

Turkmenistan was supposed to supply 1.3 billion cubic meters of gas per year to Turkey. The deal has been on hold since October 2025, and now Ankara is revealing the real reason for the first time: The U.S. sanctions authority OFAC halted the barter trade via Iranian pipelines. As a result, Turkmenistan’s only functioning export route to the West is blocked indefinitely.

Bayraktar Cites U.S. Sanctions as the Real Reason

Turkish Energy Minister Alparslan Bayraktar spoke to journalists on November 6. According to the British news portal Middle East Eye, he said: “We halted the project because of OFAC, which was somehow involved here. Although we didn’t pay anything to Iran, the situation between Iran and the U.S. escalated.” OFAC is the sanctions enforcement agency of the U.S. Department of the Treasury. According to Middle East Eye, the Turkish Ministry of Energy added that Ashgabat fears punitive measures because the shipments use Iranian infrastructure.

The deliveries began in March 2025 as a barter arrangement. Turkmenistan feeds gas into the Iranian grid, and Iran delivers the same amount at the Turkish border. The Turkish state-owned importer Botaş held a license for this until 2033. In October 2025, Ashgabat halted the deliveries. Officially, the only thing missing at the time was a contract specifying volumes and prices. According to the regional business newspaper *The Times of Central Asia*, approximately 1.3 billion cubic meters had been delivered by the end of 2025. Turkmengaz CEO Maksat Babaev remained calm at the time, stating that there were other buyers and “that’s the market.” The deal had political backing at the highest level: President Recep Tayyip Erdoğan announced in May 2025 that he would extend the contract by five years. In early 2026, Bayraktar held out the prospect of resuming the deal. It never happened. According to Middle East Eye, the conflict between the U.S. and Iran, which escalated in February, derailed all plans.

Production is declining; China remains the dominant buyer

The suspension of deliveries is hitting a sector that is already in decline. According to the Azerbaijani news agency Trend, which cites the World Energy Report by the Italian conglomerate Eni, Turkmenistan’s gas production fell by 1.4% in 2025 to 72.48 billion cubic meters. This is the lowest level since 2019 and the fourth consecutive year of decline. For 2026, however, Ashgabat reports that it has met its targets: According to Trend, the sector fulfilled 108.3% of its production plan from January through October. This figure cannot be independently verified, as Turkmenistan does not publish absolute production data.

This makes the country’s dependence on its main customer, China, all the more pronounced. In April 2026, the Chinese state-owned company CNPC began the fourth phase of development of the massive Galkynysh field. According to The Times of Central Asia, the project will cost $5.1 billion, funded by Turkmenistan itself. This phase is expected to increase capacity by 10 billion cubic meters per year. The additional gas is destined for the Central Asia–China pipeline, which runs through Uzbekistan and Kazakhstan to western China. Galkynysh is one of the world’s largest gas fields and underpins Ashgabat’s entire export strategy. However, every additional cubic meter sent to China further cements Beijing’s pricing power. China pays less than European buyers and, in the past, has sometimes offset payments for deliveries with loans for pipeline construction.

Without a pipeline, the western route remains a mere declaration of intent

Despite the halt, Bayraktar promoted Turkmen gas in Europe. According to Middle East Eye, he pointed to spare capacity in the TANAP pipeline: Turkey could double its gas exports to Europe. Azerbaijan’s reserves are slowly running out, he said, and Turkmen gas is the alternative. The only thing missing is the pipeline. A Trans-Caspian pipeline has been stalled for years due to unresolved maritime borders and resistance from Russia and Iran. As early as October 2025, the Turkish Ministry of Energy stated, according to The Times of Central Asia, that it intended to source Turkmen gas via the Caspian Sea in the future. Nothing has happened since then. The swap via Iran was small, but it was the only viable western route. Its end pushes Turkmenistan back toward China and smaller volumes to Russia and Uzbekistan.

Measured against annual production of 72.48 billion cubic meters, exports to Turkey accounted for less than 2%. The significance lay in the signal it sent: Turkmen gas had reached a new market, with Botaş as a financially strong buyer. For Ankara, its own plan to become a hub for Central Asian gas is also at stake. Furthermore, Turkey’s gas contracts with Iran expire in November. If Ankara does not renew them under U.S. pressure, the technical basis for the swap will also disappear. The economic toll on Ashgabat is severe: The country is investing billions in new production capacity but is losing its only Western market. As long as Washington blocks every Iranian route, Turkmenistan’s diversification remains a paper project.

Source: Middle East Eye, Azernews, The Times of Central Asia (supply halt), The Times of Central Asia (Galkynysch), Trend (Eni data), Trend (plan fulfillment) (all EN)