AGP Executive Report

Energy & Mining: Türkiye and Syria signed a phosphate cooperation MoU in Damascus covering phosphate production, mining-site development and transport infrastructure, with plans that include a railway to the port; Turkish firms also signaled broader energy ambitions as TPAO and private players prepare seismic surveys and exploration drilling in Syria. Maritime Defense & Industry: Türkiye’s TEKNOFEST Blue Homeland kicks off this week in Kocaeli, with a major Turkish Navy maritime and aerial display featuring the TCG Anadolu and domestically developed drones ahead of the four-day maritime tech showcase. Trade & Regional Investment: Moldova’s President Maia Sandu met Turkish MP Kürşad Zorlu to deepen economic ties, highlighting that trade has topped $1bn and pointing to Turkish opportunities in infrastructure, energy and Gagauzia, where Turkey has backed hundreds of projects. Security at Borders: Bulgarian customs seized 45 combat pistols hidden in a Turkish fig lorry headed for Germany, underscoring ongoing arms-smuggling risks along the Turkey-EU corridor. Construction Tech for Mining: Karmod installed modular container structures at a manganese mining site in Gabon, pitching climate-controlled, fast-deploy units for Africa’s mining operations. Labor Market: TurkStat reported Türkiye’s unemployment fell to 7.9% in Q2 as employment rose to 32.48m, with services adding jobs while industry employment declined.

Middle East Security: Israel said it struck a Syrian air base near Aleppo after Turkish forces were allowed to deploy there, while Syria and Turkey condemned the attack as a sovereignty violation. Regional Defense Pact: Saudi Arabia, Türkiye and Pakistan signed the Mecca Joint Defense Pact, with an “attack on one is an attack on all” clause that raises NATO-style comparisons and new security expectations across the region. Iran-Hormuz Pressure on Trade: Erdoğan urged Trump to keep Iran talks alive to ease tensions; Trump meanwhile insisted no Iran talks are planned and posted the Strait of Hormuz as “new US territory,” as shipping remains disrupted. Energy & Logistics: Iraq approved a three-month framework from Sept. 1 to export crude via specialized local and international firms and multiple outlets, aiming to cut reliance on Gulf routes and keep flows moving through alternatives including Turkey and Syria. Turkish Industry & Tech: Türkiye launched its 2026-2030 AI Action Plan, targeting AI models for healthcare, agriculture, energy and industry plus robotics and smart manufacturing, with a push for at least $10bn in mostly private investment. Maritime Defense Showcase: TEKNOFEST’s Blue Homeland opened in Kocaeli, featuring tours and demonstrations of domestic naval platforms and underwater units. Business Links: A Turkish business delegation met Iraq’s PM to discuss investment in airports, rail, metro, power, dams and agriculture.

Maritime Security: A ship was hit by an unidentified projectile while transiting the Strait of Hormuz off Oman; the engine room was damaged and a crew casualty reported, with no environmental damage so far—underscoring how shipping risk is rising as Iran keeps the strait effectively shut. Regional Defense: Saudi Arabia launched the Saudi-led Multinational Maritime Defense Coalition in Riyadh, with Turkey among 14 endorsers, aiming to secure the Red Sea and Gulf of Aden amid Houthi attacks. Aegean Tensions: Turkish media revived an “Imia-style crisis” narrative over Greece’s military presence and new facilities on Ro (Kara Ada) near Kastellorizo, framing it as a provocation. Trade & Industry: Turkey’s exports grew nearly ninefold over 25 years to $273.3bn in 2025, while services exports rose to $122.6bn, supported by TURQUALITY and broader export financing. AI & Governance: Turkey officially launched an AI action plan through 2030, pushing tech sovereignty and new governance steps. Energy/Geopolitics: BRICS condemned the EU carbon border tax (CBAM) as protectionist, warning it could undermine developing countries’ climate efforts.

Libya Diplomacy: Turkish FM Hakan Fidan met Khalifa Haftar in Benghazi, giving Ankara rare access to both sides of Libya’s split and adding pressure to regional energy and maritime plans in the Eastern Mediterranean. Energy & Trade Corridors: Türkiye is pushing to reopen and secure the Strait of Hormuz via talks with Iran, while Ankara also looks at alternative routes that could route oil flows through Turkey as shipping risks rise. Renewables Deal: Turkey and Saudi Arabia plan to expand renewable cooperation by 3,000 MW, taking the framework to 5,000 MW, with signing expected around COP31 in Antalya. Border Infrastructure: Türkiye is expanding and modernizing multiple customs crossings with Syria to boost trade and transit, including lane and yard upgrades at Cilvegözü, Akçakale and others. Defense Industry Watch: Turkey’s role in the wider Middle East security shift continues as Erdogan urges de-escalation in US-Iran tensions and highlights Ankara’s mediation capacity. Digital Economy: YouTube will switch to first-frame view counting from Aug. 24, changing how engagement metrics are reported for long-form content. Aviation/Logistics: Lufthansa rolls out new economy amenity kits on long-haul flights, part of broader passenger-experience upgrades.

Turkish Defense Tech: Türkiye’s Marlin unmanned surface vehicle has entered operational service with smart mine-laying capability after integration of domestically developed Malaman sea mines, marking a step up in autonomous naval warfare. Automotive Industry: Türkiye’s auto output fell 8% year-on-year in the first seven months of 2026 and exports by volume dropped 14%, though industry says the dip partly reflects production-line transitions for new models and capacity investments. Renewables & Energy Cooperation: Ankara and Riyadh are set to expand renewable energy cooperation toward 5,000 MW, aligning with broader regional energy plans. Digital & AI Ecosystem: GITEX Ai Türkiye is set to debut in Istanbul as a Eurasia bridge for global capital and Türkiye’s AI startups, with industry leaders pitching industrial AI, defence tech and energy tech as VC targets. Maritime Security: Pirates seized a cargo ship off Somalia amid renewed attacks in the Horn of Africa, adding pressure to already strained shipping routes. Earthquake Resilience: A new report says 42% of Türkiye’s homes still lack earthquake insurance 27 years after the Marmara disaster. Agriculture & Land Use: Antalya is converting agricultural land near the COP31 EXPO site into a parking lot, drawing criticism from agricultural engineers. Geopolitics Impacting Trade: The US-Iran MoU talks missed their 60-day deadline as the Strait of Hormuz remains a key risk for global shipping and energy flows.

Earthquake Risk: Turkey’s DASK says 42% of homes still lack compulsory earthquake insurance, with coverage lowest in the Black Sea (45%) and highest in Marmara (65%), as the 17 August 1999 Marmara anniversary renews pressure for wider take-up. Defence & Industry: The Saudi-Türkiye-Pakistan “Mecca” joint defence agreement signed on Aug. 7 is being hailed by US President Trump as a “big, bold, important first step,” with plans for collective deterrence, coordination, joint exercises and defence-technology cooperation. Energy & Shipping: Erdoğan says passage through the Strait of Hormuz should be free of charge, as the waterway remains disrupted and Turkey also works on a Kirkuk-Ceyhan pipeline backup with Iraq. Oil Transit: Iraq’s SOMO puts the Kirkuk-Ceyhan pipeline tariff at $1.62 per barrel under a one-year extension, keeping crude flows moving after the long-term deal expired. Aerospace: Türkiye’s Bayraktar Kızılelma unmanned combat aircraft reportedly completed a new test firing from its internal weapon station, underlining the push for defence self-reliance. Tech & Consumer Demand: Omdia reports smartphone shipments across the Middle East (excluding Turkey) fell 19% in Q2 2026 to 10.6m units, hit by higher prices, supply constraints and uncertainty.

Offshore Wind Push: Turkey set a clear path for its first offshore wind tender, targeting a ~1GW YEKA auction in Q1 2027 with 5GW offshore by 2035, after a consultation and draft rules including ~25% local content. Renewables Deal: Türkiye and Saudi Arabia will expand renewable cooperation by 3,000MW at COP31 in Antalya, lifting the planned total in Türkiye to 5,000MW. Energy Security & Exports: With Strait of Hormuz risks, Ceyhan is being positioned as a “Rotterdam” for crude and products, supported by BTC and Iraq–Türkiye pipeline flows. Domestic Oil & Gas Output: Energy ministry data shows H1 output at 23.1m barrels of oil and 1.641bn bcm of natural gas, with Gabar and Black Sea fields driving growth. Health Localization: Turkey plans to boost local production of vaccines, medicines and strategic medical devices, including contracts for at least six domestic vaccines and a list of 45 priority devices. Aviation & Cargo: Istanbul Airport keeps climbing as Europe’s busiest by passengers, while Navi Mumbai expands international freighter operations—Turkish Airlines plans to relocate freight there. Airline Pressure: Pegasus reported a loss in Q2 as Middle East disruption hit demand and fuel costs rose. Digital for Industry: Havelsan launched ORION, a domestic AI-ready data management platform aimed at unifying fragmented enterprise data. Earthquake Coverage Gap: About 42% of Turkish homes still lack compulsory earthquake insurance, despite DASK coverage expansion.

Makkah Joint Defence Agreement: Turkish President Erdoğan said Egypt could join the Türkiye–Saudi Arabia–Pakistan Mecca pact, which treats an attack on one member as an attack on all—while Ankara also pushes to reopen the Strait of Hormuz amid ongoing regional tensions. Ukraine War & Turkish Link: Russia demanded explanations from the US and Turkey over reports that US weapons and ammunition held in Türkiye could be transferred to Kyiv, warning it would “seriously harm” bilateral ties as Ukraine carries out long-range strikes. Energy Trade Watch: Türkiye let the Kirkuk–Ceyhan pipeline deal expire, then signed a short-term transit arrangement for 750,000 bpd pending a broader energy cooperation deal. Industrial & Tech Signals: Turkey’s AKP marked its 25th anniversary with a 25-year vision document focused on high-value production and digital sovereignty, while Ryanair signed a five-year Google Cloud AI partnership—an efficiency push relevant to regional aviation operations. Food & Agriculture: Morocco’s steel demand is forecast to rise 7–8% in 2026, and Indiana regained HPAI-free status after 28 days without new detections, easing trade prospects for poultry.

Urban Renewal & Housing: Istanbul is demolishing and rebuilding nearly 10,000 unsafe buildings a year under Turkey’s earthquake-risk overhaul, with “Yarısı Bizden” grants and loans pushing residents to apply fast. Energy & Oil Exploration: Diyarbakır’s planned horizontal drilling trials could boost output to 2–3 times the Gabar field if successful, while Turkey also keeps expanding its renewables and EV plans. Transport Regulation: Turkey set new rules for short-term car rentals from Jan. 1, 2027, including vehicle age and mileage caps, operator licensing, and deposit limits. Maritime & Trade: Syria and Turkey discussed free zone development and port operations, with talks focused on cargo handling, logistics tech, and investor attraction. Tourism Demand: Iran-war pressure is pulling down hotel prices on Turkey’s coast, with last-minute bookings and discounts helping recovery. Defense Industry: A review of Türkiye’s 25-year defense build-up highlights MILGEM, TF-2000 air defense plans, and the Steel Dome layered architecture. Tech & AI: Ryanair signed a five-year Google Cloud deal to deploy Gemini Enterprise for back-office automation across 35,000 employees. Local Enforcement: Istanbul arrested 37 over alleged bulk visa appointment reselling using bots, with authorities citing large transaction volumes.

AK Party 25th Anniversary: President Erdoğan marked the Justice and Development Party’s 25 years, calling it a “historic transformation” and pointing to gains in defense, infrastructure, public services and Türkiye’s growing regional role. Defense & Regional Security: Turkey, Saudi Arabia and Pakistan’s “Mecca” joint defense pact continues to draw scrutiny, with Greece weighing implications and Egypt signaling it will study legal and constitutional issues before any participation. Black Sea Energy & Shipping: Reports say Black Sea disruptions are reshaping oil supply routes, while Turkey’s stance on ship transits and ceasefire proposals remains a key regional flashpoint. Air Defense Pressure: Coverage highlights how the Iran war is shrinking US Patriot and THAAD stocks, raising questions for allies’ air-defense planning. Aviation Industry Watch: Airbus is pushing faster A350 output, but delivery readiness and airline slot timing are creating a new industrial-operational mismatch. Oil Markets: Iraq’s August oil exports reportedly hit the highest daily level since the conflict began, supported by multiple export routes including via Turkey’s Ceyhan.

EV Manufacturing: Hyundai has started mass production of the fully electric IONIQ 3 at its İzmit plant after a €250m investment, making it the first time a foreign automaker produces a fully electric passenger model in Türkiye; initial output is 30,000 units a year. Energy & Trade Disruption: Turkey cut Russian oil purchases after Black Sea disruptions tied to drone strikes, with Reuters citing a drop in July volumes and expectations of further reductions in August as importers look to Brazil and Guyana. Gas Supply Shift: Azerbaijan overtook Russia to become Türkiye’s top pipeline gas supplier in June, sending about 1.01 bcm, while total gas imports fell year-on-year. Infrastructure & Construction: Turkish and Bulgarian companies are set to take part in building the Black Sea motorway between Varna and Burgas, with Turkish contractors expected to lead parts of the corridor. Water Resilience for Agriculture: Villagers in Kahramanmaraş are learning rainwater harvesting and soil-water retention methods as Turkey faces worsening water stress. Defense Industry Milestone: Türkiye’s defense sector has grown from a licensed, foreign-dependent model to a major exporter over 25 years, with exports reaching $10.05bn in 2025. AI & Tech Push: GITEX Ai Türkiye 2026 will be held in Istanbul on Sept. 9-10, spotlighting Türkiye’s $58bn ICT/AI growth ambitions and data-centre buildout. Power Market Update: Licensed electricity generation rose 6.51% in June, led by hydropower and wind, according to EPDK data. Security & Land Reuse: Turkey identified 46,490 unexploded mines in Hakkari and is continuing clearance so cleared areas can return to agriculture and livestock.

Trilateral Defense Deal: Turkey’s Defence Ministry says Türkiye, Saudi Arabia and Pakistan will set up high-level political and military mechanisms, run joint drills and deepen defence industry cooperation under the “Makkah Joint Defence Agreement,” with unmanned systems, air defence and AI/autonomous tech flagged as priorities. Energy & Industry: Turkey’s central bank lifted its end-2026 official inflation forecast to 28%, while oil prices stayed below $100 as demand softened amid ongoing Middle East logistics strain. Aerospace & Space Tech: Industry and Technology Minister Mehmet Fatih Kacır says Turkey plans a lunar spacecraft launch in early 2027 using a domestically developed hybrid propulsion system, and is working on an equatorial spaceport in Somalia. Transport & Connectivity: Turkey and Bulgaria discussed new rail links and green energy transmission corridors, aiming to boost Asia-Europe trade and energy transit. Aviation/Travel Impact: Pegasus Airlines reported a tough Q2 hit from geopolitical instability, with international passenger demand down 11% but improving trends. Regional Diplomacy: Turkish FM Hakan Fidan met Egypt’s Arab League chief and intelligence director in El-Alamein, pushing investment and defence-industry cooperation.

Mecca Defense Pact: Türkiye, Saudi Arabia and Pakistan formalized the “Mecca Joint Defense Agreement,” with Ankara saying it will set up senior minister and military coordination, joint exercises, and deeper defense industry cooperation—while stressing the pact is defensive and names no common enemy. Eastern Mediterranean Energy: An analysis revisits how offshore gas pipelines are reshaping power in the Eastern Mediterranean, with projects like EastMed still uncertain and Turkey’s planned undersea links adding leverage. ICT & AI Push: Istanbul will host the inaugural GITEX Ai Türkiye on Sept. 9-10, spotlighting AI, cybersecurity, data centers and smart manufacturing as Türkiye targets rapid growth in its $58bn ICT market by 2031. Petrochemicals Outlook: Petkim/SOCAR Türkiye’s general manager highlights Türkiye’s petrochemical potential, arguing competition is shifting toward supply security and efficiency. Medtech Compliance: HPO.TECH says it completed the EU MDR transition early for its hyperbaric chamber systems, aiming to stay on the market under stricter EU rules. Energy Security Talks: Turkish FM Hakan Fidan met Egypt’s Arab League counterparts in El-Alamein, discussing hydrocarbons, electricity grid integration, mining and defense-industry cooperation.

Mecca Defence Pact: Türkiye, Saudi Arabia and Pakistan signed a mutual defence agreement in Mecca, with Erdoğan saying the vision should expand beyond the three states and Fidan pointing to Egypt as a likely next joiner—an effort to reshape West Asia’s security architecture as US-Iran tensions and shipping risks rise. Patriot Pressure on Ukraine: Reports say EU governments are scrambling to send Patriot interceptors to Ukraine as Western stocks run low, while Trump publicly rejects Zelensky’s push for more missiles and questions local production. Hormuz Deadlock: Iran and the US remain at loggerheads over reviving an interim deal, with Iran insisting the Strait of Hormuz stays blocked until US conditions are met, keeping energy and logistics uncertainty high. Black Sea/Maritime Security: Turkey’s stance on restricting Black Sea shipping and broader convoy/escort practices underline how drone and missile threats are forcing rerouting and new maritime operating models. Turkish Energy Trade Push: Türkiye is pursuing a new electricity corridor linking Saudi Arabia through Jordan and Syria, aiming to boost regional power trade and strengthen Ankara’s energy transit role. Industrial/Tech Signals: Enercon reported a return to profitability on demand in Germany and Turkey, while Cloudflare’s DDoS report flags a surge in large attacks and Turkey’s growing exposure amid geopolitical tensions.

Offshore Wind Push: Türkiye will launch its first offshore wind tender in Q1 2027, targeting 5 GW by 2035, with draft YEKA specs open for feedback until Aug. 17. Energy & Environment: İstanbul’s Çatalca mine expansion was approved, nearly tripling output and potentially affecting 24,536 trees. Regional Security & Trade Routes: Erdoğan said the Turkey-Saudi Arabia-Pakistan “Mecca” defense pact is open to more countries, while Iran-US talks to revive an interim Gulf ceasefire show “no progress,” keeping Strait of Hormuz disruption risks in focus. Shipping/Markets: Diesel shortages hit Ukraine in July despite higher imports, while the IEA cut its 2026 oil supply outlook due to ongoing Hormuz and Red Sea disruptions. Industry & Business: Intertextile Shanghai Home Textiles returns Aug. 18-20 with buyer pre-registrations from 72 markets, including Turkey-focused participation. Local Economy: Trabzon’s business community links Mohamed Salah’s move to Trabzonspor with a tourism demand boost from Egypt and North Africa.

Black Sea Energy & Shipping Security: Romania destroyed two Gerbera-type drones drifting near the Neptun Deep offshore gas project, after Ukraine confirmed they were not theirs—another reminder that the Black Sea’s energy corridors are getting riskier for operators and insurers. Regional Defense Diplomacy: Pakistan’s foreign minister ramped up Gulf calls after the Mecca Joint Defense Agreement with Türkiye and Saudi Arabia, while Qatar welcomed the pact as a stability boost. Hormuz Shock to Markets: Iran reiterated that the Strait of Hormuz stays closed unless Washington accepts Tehran’s conditions, keeping oil near $90 and adding pressure to global crude and LNG flows. Turkey Energy Project Milestone: Turkish Petroleum installed a 96-metre flare tower on the Osman Gazi FPSO at Filyos, aiming to commission it offshore in Q4 and double Sakarya output. Industrial Weakness Watch: A new analysis flags Türkiye’s industrial strength being undermined by heavy dependence on imported steel, aluminium and copper inputs. Health Cooperation: Türkiye and Pakistan discussed expanding technical cooperation in vaccines, healthcare tech, regulation and capacity building.