Turkish minister warns Middle East war to reshape regional economy, security

Treasury and Finance Minister Mehmet Simsek said Saturday that the war in the Middle East would fundamentally reshape the region's economic and security landscape, triggering a supply shock twice as severe as the 1973 oil embargo while accelerating efforts to reduce strategic dependencies and diversify trade routes.

Energy shock exceeds 1973 crisis

Speaking at the TRT World Forum panel "Towards a Rocky Recovery: National Economies After the Wars in the Middle East," Simsek warned that the conflict has caused disruption seven times greater than the Russia-Ukraine energy crisis. "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, noting that much of the region was already experiencing recession while global growth has slowed amid higher inflation. Citing an International Monetary Fund (IMF) study examining 170 conflicts since 1946, he added that wars typically resulted in output losses of between 3% and 7%, stating, "If there is no durable peace, it would be very hard to talk about a durable recovery."

Regional trade and defense

Simsek argued that the conflict would prompt countries to reconsider reliance on critical maritime routes such as the Strait of Hormuz, pushing governments to invest in alternative trade corridors and energy security. While trade within Europe accounts for approximately 67% of regional commerce and reaches 59% in East Asia, the figure stands at just 15% in the MENA region, according to comparisons he presented. He highlighted Türkiye's role in connectivity projects including the Middle Corridor and the Development Road project, while stressing that investing in peace must accompany strengthened defense capabilities — noting that Türkiye's defense industry secured orders worth roughly $18 billion last year, ranking the country 11th among global exporters.

Ankara's diplomatic push

Simsek said Türkiye was pursuing diplomatic initiatives including work on the Armenia-Azerbaijan peace agreement, facilitating negotiations between Russia and Ukraine, and efforts to achieve peace in Gaza. He pointed to Ankara's potential role in postwar reconstruction, estimating that needs in conflict-affected neighboring regions could reach at least $1 trillion over the next decade, while noting that Türkiye maintains 54 free trade agreements covering nearly 70% of its exports. "Wars are not in our interest. We benefit most from stability, peace, and prosperity in the region," he said, adding that Ankara remained committed to rules-based trade despite growing protectionist tendencies worldwide.