Tüpraş Faces Its Biggest Supply Crisis in Years — Can Turkey's Sole Refiner Weather a Hormuz Shutdown?

Tüpraş Faces Its Biggest Supply Crisis in Years — Can Turkey's Sole Refiner Weather a Hormuz Shutdown?

Shares of Tüpraş surged +1.8% to $262.75 on July 10, capping an 11% rally in just eight trading days, as renewed US-Iran hostilities threw the Strait of Hormuz — and the refiner's crude supply chain — into chaos. The escalation was triggered after Iran attacked three commercial ships on July 6–7, prompting US strikes on over 80 Iranian targets and President Trump declaring the ceasefire "over." For Tüpraş, which buys virtually all its crude from abroad, the implications are immediate and severe.

Turkey's Only Refiner Has Almost No Domestic Cushion

Tüpraş operates four refineries with a combined 30-million-ton annual capacity, three of which process imported crude.

Turkey produces only about 15% of the crude oil it consumes , meaning Tüpraş is essentially a pass-through business: if imported barrels stop arriving, the plants idle. The company sources from 11 countries and 18 crude types , but roughly 25% of the world's seaborne oil trade transited Hormuz before the conflict began — a corridor Tüpraş's Iraqi and Gulf suppliers depend on.

Oil Prices Jumped Nearly 10% in a Week, Squeezing Refining Margins

Brent crude sat at $76.80 per barrel on July 10 , after hitting $79.25 on July 9.

Brent rose 6% in a single session after Trump's ceasefire remarks. For a refiner, what matters is the spread between crude input costs and product selling prices — the "crack spread." When crude spikes faster than product prices adjust, that margin compresses, directly hurting profits. Even before the latest strikes, war-risk insurance premiums for Hormuz transits surged from 0.125% to 0.2–0.4% of ship value per voyage , an added cost layer Tüpraş must absorb or pass on.

Diversification Away from Gulf Oil Was Already Under Way — but Not Enough

Tüpraş had been increasing purchases of Iraqi and non-Russian crude, including cargoes from Brazil and Angola , partly to comply with Western sanctions on Moscow. Its London trading arm secured over 9.5 million tons of spot crude in 2025 , showing active hedging. But Iraq's exports via the Gulf remain Hormuz-dependent, and the Kirkuk–Ceyhan pipeline contract expires this month — a worrying timing coincidence.

The Stock Rally May Be Pricing in Higher Product Prices, Not Supply Reality

The recent run-up suggests traders expect Tüpraş to pass higher crude costs to Turkish consumers. But that bet ignores the bigger risk: if crude simply doesn't arrive, Turkey's sole refiner faces production cuts regardless of pricing power. The scale of any oil flow disruption remains unclear, with vessel tracking showing fewer Hormuz transits and limited US-corridor activity. The stock's short-term strength masks a fragile setup where every additional day of strait disruption erodes Tüpraş's ability to keep its plants running.