New Phase of Russo-Turkish Relations

-Dr. Abdul Ruff

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From traditional rivals to regional partners, Russia and Turkey have come a long way for fruitful relations by mutual understanding, now focusing on deepening collaboration in energy sector. Today, essentially Russian-Turkish relations in the energy sector have risen to a strategic level.

With all powerful Recep Tayyip Erdogan having moved from being prime minister to president and former Foreign Minister Ahmet Davutoglu taking over the premiership, Turkey seems likely to sustain its current policy toward Moscow, and Russia under another powerful president Vladimir Putin willingly reciprocates.

Russia and Turkey have had a long, often tumultuous relationship, and some of their difficulties are not so distant. Their current relations are of particular significance in the context of the tense confrontation between the United States, the European Union and Russia over Ukraine. 

After Ukraine

Turkey has abstained from Western efforts to punish Moscow over Ukraine, maintaining a rather moderate tone. Even before Moscow annexed Crimea earlier last year, Russian-Turkish relations had been on a dramatic upswing, with two-way trade reaching some $32 billion in 2013 (mostly Turkish imports of Russian natural gas) and Russia becoming Turkey’s No. 2 trading partner, behind Germany. Turkey had also emerged as Russia’s No. 1 trade partner in services. Two years ago, Russia and Turkey agreed on visa-free travel for their citizens.

On the political front, Russia and Turkey established the High Level Cooperation Council in 2010. Although Moscow and Ankara do not always agree on how to proceed on issues, their communications appear to be far more regular and substantive than Putin’s exchanges with any other NATO member, especially after the alliance shut down the NATO-Russia Council early 2014.

For Russia, the advantages of an improving relationship with Turkey are powerful and multidimensional. Turkey has got a well-developed NATO infrastructure and it’s unwillingness to participate in such a confrontation would sharply limit NATO’s options. The symbolism of Turkey’s unwillingness to join the US-European effort to isolate Moscow and to impose costs for the Kremlin’s conduct in Ukraine allows Russian leaders to assert their independent views.

The combination of Russia’s energy resources and Turkey’s location straddling three continents is appealing to Russia, and Turkey provides state-owned Gazprom with yet another route around Ukraine to Europe. Turkey also appears to share some of Moscow’s perspectives on the need to reform the international financial system to accommodate emerging economies.

South Stream project

Pressed by European and American economic sanctions over Russia's actions concerning Ukraine, Moscow appears to be opting for a traditional strategy toward the West: divide and conquer. Russia has left behind all bad tensions with Turkey and has forged fruitful energy ties.

Russian involvement in Ukraine has harmed the economic interests of both Europe and Russia, however left USA largely unaffected. Annexation of Crimea generated chain reactions leading to vital policy changes in the Kremlin. Moscow has been making efforts to punish European nations for siding with USA in crippling Russian economy. Putin said last week Russia was dropping the South Stream project that would cause serious economic jerks in Europe and was instead planning to build a pipeline to Turkey and could set up a gas hub on the Turkish-Greek border to supply Europe with gas.

During a visit to Turkey on Dec. 1, President Vladimir Putin described Turkey as a "strategic partner" and proposed a new, 63 billion cubic meters per year gas pipeline running under the Black Sea from Russia via Turkey to the Greek border, which would serve as a forwarding point to Europe. Russia pledged a 6 percent discount on the price of the 14 billion cubic meters of gas available for sale annually to Turkey from the pipeline. President Putin announced in Istanbul that the pipeline project was off, doomed by a legal dispute with the European Union that has its roots in a deepening standoff between the West and Russia. Russian state gas company Gazprom said January 12 that it would set up a company to build a gas pipeline to Turkey, days after President Vladimir Putin announced the new project.

South Stream represented the biggest infrastructure investment in Serbia in Europe in the almost 15 years since the former Yugoslav republic emerged from international isolation with the fall of late strongman Slobodan Milosevic. The cancellation deprives southeastern Europe of an alternative supply of energy to the disruption-prone route through Ukraine, but there was a financial cost too. States along the route with fragile economies were banking on a big payday from construction, shipment fees and cheaper gas. For Serbia, which has long touted its ties with fellow Orthodox Christian nation Russia, the blow is particularly bitter.

Both given to a robust disdain for the West, Putin and Erdogan share a strong personal chemistry, which has helped them manage regional differences in the past. Turkish Energy Minister Taner Yildiz called the new pipeline plan "Turkish Stream”.  Turkey could now propose to Russia the construction of an integrated energy complex including an LNG terminal at its border with Greece, as part of talks for a planned new natural gas pipeline with its northern neighbor.

Russian Energy Chess

The Russians are trying to find ways to put pressure on EU members because Austria is very keen to get South Stream gas. There is desire on the Russian side to establish a closer relationship with Turkey and eventually leverage energy ties to pull Turkey away from Europe and closest to the Russian position. That is definitely a motivation for canceling South Stream and for directing huge flows of gas to Turkey's direction. Now the proposed new pipeline would increase Turkey's gas dependency on Russia, one of its largest trade partners, to over 75 percent, and would place the country more firmly inside the Russian energy camp. 

The BP Statistical Review of World Energy says Turkey has long been keen to wean itself off Russian energy, which currently accounts for an estimated 57 percent of its gas needs, Although Turkey stands to benefit from Moscow's surprise decision to drop the $45 billion South Stream natural gas pipeline project, it raises questions about whether Turkey will become a pawn in the broader energy contest between Russia and the European Union.

While the EU-backed Trans-Anatolian Pipeline (TANAP) as has long been seen as the best bet to supply Turkey and, ultimately, Europe, with non-Russian gas, "only limited" Azerbaijani gas currently is available. On Dec. 8, just a week after Putin's visit, the EU's foreign policy chief, Federica Mogherini, came to Ankara to underline Turkey's strategic importance for Brussels. Obviously, EU does not want strong turkey-Russia ties.

The deal has caught EU’s attention. So far, EU officials have not publicly commented on the Russian-Turkish initiative. Both the Turkish government and the European Union had seen gas imports from Azerbaijan, a cultural cousin and close ally of Ankara's, via the TANAP as the answer to decreasing their level of energy dependency on the Kremlin. Russian President Vladimir Putin has other ideas.

Turkey strives to turn itself into an energy hub, not just serve as a transit country, but, until now, Moscow has never allowed Ankara to resell its gas. Being an energy hub means going beyond a transit state, so it will not be just a bridge, but also distribute gas and make money out of these deals. The price of the Russian gas remains a potential stumbling block. While gas prices are usually pegged to oil, each deal is unique. With oil prices falling by nearly a third in the last three months, Ankara insiders were looking for a discount of about 15 percent, rather than 6 percent. The Russian president has indicated a further cut could be in the offing. So far, only a memorandum of understanding has been signed between Moscow and Ankara.

For all the talk of a Russian-Turkish pipeline partnership, a rising geopolitical rivalry exists between Moscow and Ankara that could hamper deal-making. They disagree very fundamentally on Syria and Ukraine, especially Crimea, where there is a Tatar minority. These are relatives of the Turks. And the two countries do not agree on the Cyprus issue because Moscow is known to stand behind the Greek Cypriot administration. Such matters are minor ones and may not necessarily undermine the new Putin pipeline initiative.

Russia is proving it was a super power and has not lost all tools of international politics. As Europe began playing the politics of economic hit on the Kremlin, Russia turned to s rival in the region Turkey, the only Muslim nation in Europe, and cemented its ties with it.

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