31.03.2024 Author: Alexandr Svaranc

Turkey abandons oil trade with Russia?..

Turkey abandons oil trade with Russia?..

Against the backdrop of the secondary sanctions adopted by the United States against countries that violate the embargo regime imposed on Russia, since the beginning of 2024 Turkey has started to take actions that are inconsistent with the course of the strategic partnership (at least in the sphere of trade and economic relations), willingly or unwillingly. In particular, we have witnessed the refusal of Turkish banks to accept payments from Russian legal entities and now from Turkish exporters of goods to the Russian market (except for agricultural products). Finally, some Turkish terminals have been refusing to accept Russian oil since March, which is actually a new approach by Ankara to comply with the anti-Russian sanctions regime.

It is clear that Turkey, which is particularly pragmatic when it comes to trade, is unlikely to act to the detriment of its current and future interests. Another issue is that Ankara may temporarily accept or reject certain proposals (projects and shares), but at the same time raise the stakes of its interests in negotiations with a partner.

A good example of this is the months-long Turkish-American ‘haggling’ over Finland’s, and especially Sweden’s, accession to NATO. As we recall, Ankara has literally pushed its interests before the collective West on various issues (including the re-election of Recep Erdogan, toughening relations on the Kurdish issue, providing financial and credit assistance to the failing Turkish economy, concluding a “military deal” on modernised F-16 Block70 fighter jets, accelerating or facilitating Turkey’s European integration process, etc.). And it should be recognised that, with the exception of integration with the EU, Ankara has actually achieved the resolution of other issues for itself at this stage.

At the same time, Turkey does not always compromise with its external partners (including its main ally, the US) when it comes to its security issues. In the mid-1970s, after the Turkish naval landing in Northern Cyprus as part of Operation Attila, Ankara did not agree with Washington on a political settlement of the Cyprus issue and continues to occupy this part of the Turkish-populated Greek island.

At the same time, while maintaining its NATO membership, Turkey even went so far as to deteriorate its relations not so much with Greece as with the United States. In response to the American military embargo, the Turks began manoeuvring with the USSR in those years on the subject of supposedly possible military-technical cooperation and the purchase of Soviet weapons. In reality, Turkish covert diplomacy used intelligence channels and leaked information to influence the US to lift military sanctions and resume full cooperation within NATO on the condition of freezing the political settlement of the Cyprus problem.

Returning to the issue of anti-Russian sanctions and US pressure on Turkey, another example can be given. In particular, after Erdogan’s positive decision on the “Swedish case” and Joseph Biden’s response on the delivery of 40 upgraded F-16 Block 70 fighter jets with the approval of this deal by Congress, the US, as is known, made a new offer to Turkey. Thus, US Deputy Secretary of State Victoria Nuland, who was on a working visit to Ankara, announced Washington’s readiness to return to the F-35 project in order to include Turkey in the production programme of the modern fifth-generation fighter. However, the main condition for Turkey’s entry into the programme is that Washington once again refers to the Turks’ refusal to use Russia’s S-400 Triumf air defence systems, which was in fact the main reason for Turkey’s exclusion from the project in 2019.

Meanwhile, Turkey has so far publicly refused to accept the US conditions for the F-35 in exchange for the S-400. For example, the US ambassador to Ankara, Jeffry Flake, believes that Washington’s attempts to solve the “problem” of the availability of S-400 air defence systems in Turkey have so far been unsuccessful. In an interview with NTV, Flake said: “During Turkish Foreign Minister Hakan Fidan’s visit to the United States on 7-8 March, the issue of the F-35 was raised. As we have said many times, the S-400 remains a problem. We want to find a solution to this problem. Under Secretary of State Victoria Nuland has already made proposals in this regard. We want to solve this problem, but so far we have not succeeded”.

Turkey believes that it has had to spend a lot of money on the S-400 deal, as well as on the development of its own defence programmes (e.g. new HISAR air defence systems and the KAAN fighter jet). Moreover, Ankara rejected Washington’s offer to transfer S-400 air defence systems to Ukraine in exchange for F-35 fighter jets, as the Turks do not want to spoil relations with Moscow and acquire security problems.

In particular, according to Reuters, such talks are taking place between the United States and Turkey. This exchange was discussed during a visit to Turkey by US Deputy Secretary of State Wendy Sherman. Meanwhile, according to Sky News Arabia, an unnamed Pentagon official said: “We are in ongoing discussions with Ankara about giving up the S-400 and sending it to Kiev in exchange for Turkey’s return to the F-35 programme and the lifting of sanctions.

Thus, if necessary, Turkey can make independent decisions without having to rely on the opinion or pressure of the same US. However, the recent statement by Hakan Fidan after his return from Washington that Ankara is interested in receiving F-35 fighters leaves many questions unanswered about the firmness of the Turkish position on the issue of S-400 air defence systems. Moreover, it is difficult to say whether this issue was on the agenda of the negotiations between R. Erdogan and V. Zelenskyy during the latter’s recent visit to Istanbul. However, it is not difficult to imagine how Russia would respond to its Turkish partners if, by some strange coincidence, this “Triumf” one day ended up in the hands of the Ukrainian Armed Forces, which would no longer accept cargoes from Russia.

What is the reality of the oil trade situation? At the beginning of March, the media reported that some Turkish terminals were refusing to accept Russian oil. According to Reuters, on 5 March, the Turkish oil terminal of Dörtyol (“Dörtyol” – “Four Roads”, located in the city of the same name in the province of Hatay on the Mediterranean coast on the border with Syria), one of the medium-sized oil ports in the region, which received record volumes of Russian oil in 2023, refused to receive oil products from Russia due to the intensification of sanctions pressure from the United States. Specifically, Global Terminal Services (GTS), which operates the Dörtyol terminal, said it had informed customers that it would no longer accept cargo from Russia.

Although Turkey has become one of the largest importers and transporters of Russian crude oil and oil products to foreign markets since the start of SMO (Special Military Operation) in 2022. Russia has had to divert its oil supplies from the US and Europe to Asia and Africa as a result of Western sanctions, where Turkey has received special bonuses.

For example, the GTS terminal imports, exports and stores fuels and crude oil. According to the analysis company Kpler, the Dörtyol terminal will receive 11.74 million barrels of Russian crude oil in 2023, which is 7 times the total volume from all exporters in 2021. Exports from the terminal in 2023 increased 5 times compared to 2021 (to about 24.7 million barrels). Normally, GTS re-exports Russian oil from the terminal to the Greek ports of Corinth, Elefsina and Thessaloniki, as well as to Rotterdam in the Netherlands and Antwerp in Belgium.

However, GTS decided to stop all possible operations related to Russian oil without exception. At the end of February, the company informed its customers that it would not accept any products of Russian origin or shipped from Russian ports, even if there was no violation of any laws, regulations or sanctions, as an additional measure to the current sanctions.

It turns out that the Turks follow the famous aphorism: “More Catholic than the Pope himself”. Not only does the Turkish company want to comply strictly with Western sanctions, it also wants to take additional measures on top of the existing sanctions against Russia. It is true that GTS continues to accept cargoes from Russia that were declared before the trade ban was announced. For example, the last tanker carrying Russian fuel arrived in Dörtyol on 19 February, delivering 511,000 barrels of diesel from Primorsk.

Meanwhile, Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, believes that the GTS management’s statement about cutting all ties with Russian oil is just a “loud statement” aimed at diverting the West’s attention from the flow of Russian oil products that the Turks are re-exporting from Russia to third countries at great profit for themselves. Besides, according to I. Yushkov, GTS is only one of many oil terminals in Turkey, but not the largest, while the others continue to work with Russian contractors in the same mode.

Supporters of the “soft parry” of Turkish whims hope that Ankara will not refuse to trade with Moscow, especially in the sphere of energy and oil, but will only have to pretend to support anti-Russian sanctions.

In this regard, Yushkov says: “Turkey is essentially re-exporting Russian oil products, but pretending to comply with the sanctions regime. They also buy Russian oil, from which they produce oil products themselves. If we look at the statistics, we will see that the Turks have increased their exports just as much as they have increased their purchases from Russia. Only re-exports are banned, not imports, but in fact Russian oil products are being sold via Turkey to the very markets to which Russia now has no direct access.

Thus, some Russian experts find a forced justification for the actions of the Turkish side (say, it is not them, the West is to blame for everything, and the same GTS simply resold Russian oil to European countries without unnecessary disguises, which does not fit into the rules established by the United States). But at the same time, it turns out that the Turks are so concerned about saving the face of the EU countries that they pass off Russian oil products as their own.

On the one hand, according to the same I. Yushkov, the Turkish GTS re-exports Russian oil to Europe without any fuss, but at the same time, in order to save its own face, it passes off these goods as its own. However, the West does not seem to “know” the parameters of the physical geography of Turkey, where so much oil comes from. And in this case, too, the Turks are justified: they say that they use the purchased Russian oil products on the domestic market for their own consumption, but they sell the oil and its products purchased in Azerbaijan or Iraq to the EU.

Some people find similar justifications for the actions of Turkish business circles and banks for the allegedly upcoming local elections in Turkey on 31 March (they say that the ruling party and Erdogan himself are being squeezed by the pro-Western opposition, so the authorities cannot exert pressure on private business in trade with Russia and have to take into account the pressure of the USA).

What can I say? In principle, everything can be explained, the question is whether it is worth accepting. Of course, Turkey has increased its exports thanks to the re-export of products from Russia and China, mainly to the European market. However, the USA is not so naive and ignorant that it does not understand where the percentage of Turkey’s income from the export of goods and whose goods is increasing. As a result of this US knowledge, Turkish-Russian trade in 2023 will be 20% lower than in 2022. The beginning of 2024 literally surprises us every month with new variations of Turkey joining the process of compliance with the anti-Russian sanctions regime under US pressure. First banks with payments, now terminals with oil, and then negotiations on the exchange of F-35s for S-400s, as well as the exclusion of “grey tankers” transporting Russian oil to world markets.

We do not find in the press any exculpatory statements by the Turks themselves regarding trade and financial restrictions on Russian partners. Why should Russian experts “care” so much about Turkey’s reputation? Besides, if the Turks are really making “loud statements” with an anti-Russian tone in order to distract the eyes of the West, but at the same time they continue to increase trade and re-export with us, why is our trade turnover decreasing, or why should they “betray” their Turkish partners (especially to experts from pro-government educational and analytical centres)? Who knows, maybe such a revelation on the subject of re-export of Russian oil will do ungrateful Turkish partners a “bearish favour” in terms of serving the United States…?

The US threat of sanctions against Turkish financial and other companies doing business with Russia has already dealt a blow to Turkish-Russian trade, disrupting or delaying some payments for both Russian oil and Turkish exports. Further US sanctions against Russia could affect Russian oil supplies to other large and important Asian countries (e.g. India), complicating annual contracts for Russian crude purchases by Indian state refiners.

Turkey tries to present itself as the most flexible state, able to sit on two or even three chairs. However, it is not always the case that stretching on a string can justify hopes, for there comes a time when the right choice has to be made.


Alexander SVARANTS – PhD of Political Science, Professor, especially for the online magazine «New Eastern Outlook»

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