Turkey is strengthening energy ties with Russia

As European nations opposed to Ukraine’s invasion have moved to reduce their dependence on Russian oil and gas, endure soaring prices and possible shortages, Turkey has strengthened its energy ties. with Russia.

Since the start of the war, Turkey’s imports of crude oil and coal have increased dramatically. The presidents of both countries talked about how to turn Turkey into a regional trading hub for Russian gas. And Turkey has proposed building a second Russian-designed and financed nuclear power plant, next to the one that was scheduled to come online next year.

Cheaper energy is helping to keep Turkey’s faltering economy alive at a crucial time. But the maneuvers are also part of President Recep Tayyip Erdogan’s effort to use the energy crisis to promote an age-old dream of the Turks to become a major energy hub. Its location between Europe, Central Asia and the Middle East puts Turkey in a pivotal position.

The ambitious efforts have had some success. Turkey’s growing role in world energy trade was highlighted this week when the European Union’s embargo on Russian seaborne crude went into effect alongside the imposed a US-led price ceiling on Russian oil.

More than 20 tankers, most of which have no ties to Russia, are in Turkish waters, awaiting permission to pass through the Bosporus and Dardanelles straits into the Mediterranean Sea. Turkey has requested additional proof of insurance, saying the price cap has increased the risk for uninsured tankers off its coast.

On Friday, a Russian delegation is said to have visited Ankara to discuss Turkey’s request for a 25% discount on natural gas. At the same time, maritime tracking logs show that large cargo ships loaded with Russian coal or oil are heading for Turkish ports.

Turkey has made clear its opposition to the war in Ukraine, condemning the invasion and offering military assistance to Ukraine. But it has also been careful not to offend Russia, which is helping to provide a financial lifeline at a difficult time. Mr. Erdogan, who made public his birthday phone call in October with Russian President Vladimir V. Putin, did not impose sanctions against Russia and continued to oppose Finland and Switzerland. Sweden became a member of NATO.

The balancing act between Russian and European interests has given Turkey new prominence and leverage but has also created new tensions.

Erdogan took the lead in brokering key deals to allow the safe passage of Ukrainian grain as Russia blocked Turkey’s Black Sea ports to help reduce high and dangerous food prices. global hunger crisis. Turkey also eased prisoner exchanges between the two warring nations. But opposition to NATO expansion has upset political leaders in Europe and in Washington, as well as a tanker bottleneck outside the Turkish strait.

It is not clear whether excessive caution, dysfunction or political posture is behind the stalemate, but it is destabilizing oil markets and irking Turkey’s Western allies, which asked Ankara to allow the ships to pass.

For Turkey, however, its tortured economy is a priority. Henri Barkey, a fellow at the Council on Foreign Relations, said Mr Erdogan’s policy was: “I must do whatever I can to improve the economic situation, and if that means work with the Russians, I will work with the Russians. “

Certainly, the economy is in dire need of improvement. Inflation has soared past 80%, severely denting the president’s credibility and jeopardizing his re-election bid next year. Turkey is also heavily dependent on foreign energy, importing 93% of its oil and 99% of its gas, according to the International Energy Agency, a situation that widens its trade deficit and increases its debt burden.

However, such a bad economy would be even worse without Turkey’s energy trade with Russia and the money it brings.

Turkey does not participate in any Russian energy embargo and has therefore been able to buy deeply discounted Russian oil. The benefits are twofold. Turkey, a country with huge refining capacity, is buying crude oil at a record cut price from Russia, refining it right on its shores and then legally labeling the finished product as yes. Made in Turkey and sold at global market prices. At the same time, it is buying discounted Russian diesel fuel for domestic use.

Over the past six months, Turkey has bought an average of 292,000 barrels of Russian crude per day, compared with an average of 113,000 barrels per day in the same period a year ago, according to Kpler, a company that tracks petroleum shipments.

According to an analysis by the Research Center for Clean Energy and Energy, Russian oil is increasingly being routed through Turkey, “where more and more Russian crude is refined, while the country increases its exports. refined oil products to the EU and the US”. Atmosphere in Finland.

(The European Union’s embargo on refined products using Russian oil is scheduled to take effect in February.)

Coal imports from Russia, which are sold at a discount, also spiked. From August, when the Russian coal import ban took effect until November, Turkey’s monthly imports from Russia averaged 2.1 million tons. According to Kpler, this is more than three times the monthly average of about 630,000 tonnes purchased during the same period last year.

“Turkey has become Russia’s biggest coal buyer,” said Viktor Katona, an analyst at Kpler, who recently returned from a trip to Turkey. “Thanks to Turkey and China, Russia’s coal exports are back to pre-sanctions levels.”

Energy is just one element in a complex array of economic and political interests driving Turkey’s desire for closer ties with Russia. Russians make up the largest number of tourists, a source of foreign exchange that helps support the falling value of the Turkish lira. More importantly, Mr. Erdogan is counting on Russia’s support for his efforts to quell Kurdish separatism in Syria.

But energy tactics have broader resonance.

Turkey’s position among energy-rich and energy-hungry nations has given it strategic importance as a transit point.

Simone Tagliapietra, a senior fellow at the Bruegel Institute in Brussels, said Putin was exploiting Turkey’s desire to become a regional energy hub to “create tension between NATO alliances”. He had doubts that the strategy would work. Given Europe’s determination to end its dependence on Russian energy in the coming years, the idea of ​​an energy hub in Turkey makes no economic sense at the moment, he said.

“Turkey will try to benefit as much as possible to get cheap Russian energy, but I don’t think that will damage the NATO alliance,” he said. Russian invasion.

Elif Ince contribution report.


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