STEVE INSKEEP, HOST:
Low oil prices have led to low gas prices in the United States, but not in Turkey, where gas is about $10 per gallon. Why would that be? We find out now from NPR's Peter Kenyon.
PETER KENYON, BYLINE: After climbing back over $60 a barrel, crude oil prices fell again Monday on news that Saudi Arabia is pumping huge amounts of oil, with March exports the highest in nearly a decade. That means more pain for oil producers Russia and Iran, which depend on high oil revenues. It also means better times for oil-importing countries like Turkey, but consumers here aren't feeling it, at least not at the pump.
At a recent energy conference in Istanbul, I ran into Mustafa Karahan, a well-connected energy trader. He says sure, at the national level, lower energy prices are good news. Inflation is starting to come down, and the nagging foreign trade deficit is shrinking. But Turkish motorists can't get a break on gasoline prices. The culprit is the Turkish lira. Karahan says Turkey's currency has been falling against the dollar - not as sharply as the Russian ruble perhaps, but more than enough to wipe out any relief at the pump from the lower cost of imported crude oil.
MUSTAFA KARAHAN: And that actually is preventing the prices to go down for consumers.
KENYON: As for where oil prices are headed, that depends to some extent on hard-to-predict things, like those American and Iranian warships floating in the Persian Gulf, where much of the world's oil supply has to transit. But barring a sudden disruption in supply, economists are looking for lower oil and gas prices to continue for some time. Fatih Birol is chief economist and director of the International Energy Agency in Paris. He's tracking one major effect of the Saudi decision to keep on pumping crude in the face of sagging demand - a global slashing of investment in future oil production. Birol says if and when the economy and energy demand do pick up, suppliers may have a hard time keeping up.
FATIH BIROL: Worldwide, the investment in oil and gas 2015 will be about 20 percent less than 2014. It's a big drop, which has never been the case in the history of oil.
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UNIDENTIFIED MAN: (Foreign language spoken).
KENYON: With elections coming up here next month, campaign buses are blaring out slogans about the economy, which is faltering, but still out-performing most of Europe. As Turks make up their mind about whom to vote for, they'll continue to dig deep at the gas pump. And judging by Istanbul's traffic, it'll take more than double-digit gasoline prices to keep them off the road.
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KENYON: Peter Kenyon, NPR News, Istanbul. Transcript provided by NPR, Copyright NPR.
