The recent outbreak of the Ukraine war has created a security hazard in the energy domain. The price of energy has gone up quite high as the Western nations put sanctions on Russia which is one of the largest energy suppliers in the world. Russia supplied 40 percent of Europe’s gas before February 2022. However, since the war began, the major energy pipelines from Russia to Europe have been dysfunctional, substantially cutting the supply. It has forced Russia to look for alternatives to supply its energy to Europe bypassing enemy states. Turkey, a NATO member, has come up with the best alternative for Russia with its geostrategic location lies between Europe and Asia. With the help of Russia, Turkey can fulfill its dream of becoming a ‘gas hub’. But no doubt, this will have some major geo-political and geo-economic implications. For now, it is safe to say that Russia will do anything to export its gas to Europe with the help of Turkey, while Turkey will carefully maneuver the opportunity at hand to make the most out of it.
The Ukraine War and Turkey-Russia Energy Cooperation
About 40% of the gas the European Union used came from Russia through pipelines, but those exports have been cut by 7.5%. Russia is also suffering from the Ukraine war as it is facing a relative decline in total energy export. In turn, it is said to be weakening Russia’s ability to finance the war. In this context, Turkey has emerged as a lifeline for Russia to export its gas and oil outside. Turkey, despite being a NATO member, has been trying to maintain an independent foreign policy in terms of its interaction with Russia. Unlike its other NATO partners, Turkey has been maintaining a neutral position and trying to mediate between Russia and Ukraine for a peaceful settlement. Turkey is important for Russia both as a destination and transit country. It is the second-largest market for Russian gas after Germany. On the other hand, Turkey largely depends on Russia to meet its energy requirement. In 2021, Turkey brought in a record 60.1 bcm of gas from Russia. Furthermore, compared to only 98,000 barrels per day (bpd) for the same time in 2021, Turkey raised its oil imports from Russia, including Urals and Siberian Light grades, to more than 200,000 bpd so far despite the Ukraine war. Both countries have already signed a number of bilateral agreements and pipeline projects to strengthen their cooperation in the energy sector. The inauguration of the TurkStream Pipeline shows that the Turkish government is now growing more comfortable with Russia’s role as its primary energy supplier.
Amid the Ukraine war, both countries have come together once more as the Russian energy supply has been halted by Western sanctions and complex geopolitical calculations. Recently, Russian President Vladimir Putin has suggested increasing gas exports to Turkey through the TurkStream gas pipeline that runs under the Black Sea, following the suspension of gas supplies to Germany via the Nord Stream pipeline located in the Baltic Sea. Turkish President Recep Tayyip Erdogan reacted swiftly by directing the relevant agencies to start working on the technical details of a Russian proposal that would convert Turkey into a gas hub for Europe. Both sides will consider a suitable location to establish a distribution center in Turkey in order to export additional gas to Europe via the TurkStream gas pipeline. However, speculations persist on the prospects of Ankara-Moscow cooperation in making Turkey a ‘gas hub’ and its implications.
Idea of the ‘Gas Hub’ in Turkey
Turkey has been on a mission to become an energy transit state or hub since the idea of an East-West energy corridor was proposed to produce and transport Caspian Sea oil and gas via Turkey instead of Russia in the 1990s. Turkey has exclusive access to the Black Sea region since it controls the Bosporus and the Dardanelle Straits. Additionally, it is close to 73% of the oil reserves and 72% of the known gas reserves in the globe. Turkey naturally forms an energy bridge between the source and destination countries. Over the years, Turkey has also built its capacity to import energy well beyond its domestic requirement to fulfill its long-term goal of becoming an energy hub. Excluding the TurkStream Pipeline, Turkey now has the ability to import up to 46.6 bcm of gas yearly through four pipelines, which are 30 bcm from Russia via Blue Stream, 14 bcm from Russia via Trans-Balkan Pipeline, 10 bcm from Iran via Tabriz-Ankara Pipeline, and 6.6 bcm from Azerbaijan via South Caucasus Pipeline. Besides its growing energy demand, Turkey has also a rich reservoir of natural gas and oil which makes it more competent as a hub for energy connectivity.
Russia is the world’s largest exporter of natural gas worldwide. Gazprom, a state-owned enterprise in Russia, earned close to 5.7 trillion Russian rubles in natural gas sales last year. However, the war in Ukraine has significantly reduced Russia’s natural gas export revenue. Due to the war, most of the routes through which Russia sends its gas to Europe such as the Ukrainian gas system (100 bcm per year), Yamal-Europe pipeline (33 bcm per year), Nord Stream I and II pipelines (55 bcm per year) have been blocked. So, the only viable option that Russia currently has is the TurkStream gas pipeline, which has an annual capacity of 31.5 bcm. However, one of its two strings is dedicated to the Turkish market, leaving just 15.75 billion cubic meters of capacity accessible to Europe. Turkey also facilitates a portion of the Southern Gas Corridor (SGC), which transports gas from Azerbaijan to Southeast Europe.
The real prospects lie in the actual demand of European countries to import Russian energy via Turkey. As Putin stated clearly that if only European countries are interested to buy Russian gas via Turkey, his country will think of constructing another gas pipeline and setting up a gas hub in Turkey. Russia has earned an estimated €85 billion in revenue from its fossil fuel exports to the EU since the war in Ukraine began which shows European countries still consider Russia as an important source of their energy. But growing dissatisfaction and fear among European nations against Russia due to its continued military offensive in Ukraine and use of energy as a foreign policy tool to gain concessions have forced them to reduce their dependency on Russian gas and oil. Over the last few years, the US and its European allies have been trying to diversify their energy sources in Central Asia, the Middle East, and elsewhere as a result. They always see the Russian energy cooperation with Turkey with suspicion. In the West, there is a widespread belief that the TurkStream Pipeline would increase Europe’s reliance on Russian gas while bypassing Ukraine.
Risks and Way Forward
Russia has proposed to make Turkey a ‘gas hub’ which if fulfilled will have geo-political and geo-economic implications. A closer tie between Russia and Turkey indicates a growing distance between Turkey and the West in their relations. We can already see both sides have their divergences over the issues in Egypt, Israel, Libya, Palestine, and, most prominently, Syria. Moreover, the US and its European allies often express their dissatisfaction regarding the deteriorating human rights condition in Turkey. In response, anti-Western rhetoric has become quite popular in Turkey. Nonetheless, the deepening friendship with Moscow may hurt its credibility as a neutral mediator in a conflict situation. Despite all these, it is unlikely that Turkey would walk away and halt its relations with its Western partners. Rather, it seems that Turkey wants less dictation from the West in its foreign policy decision-making while maintaining balanced relations with both the East and the West.
Despite geopolitical risks, Turkey is looking to extract maximum benefits out of this ongoing energy cooperation. The partnership with Russia will enable Turkey to purchase Russian gas at a lower cost, enabling Turkey to direct its money toward new investment opportunities. Domestically, it will help Erdogan to secure public support and confirm victory in the upcoming national election in 2023. Moreover, Turkey will become a significant global actor with which European nations will need to establish new power relations if it is successful in becoming the most important conduit for the transportation of energy from Russia to Europe. Nonetheless, it can play an important mediation role between conflicting parties like Ukraine and Russia for a peaceful settlement.
For Russia, the deepening cooperation with Turkey means it will have more leeway to blackmail Europe and Western nations by maneuvering its close ties with a NATO member. Turkey has provided Russia with an alternative to export its gas via the TurkStream pipeline instead of German gas pipelines which were blocked as a reaction to the Russian aggressive stance in Ukraine. No doubt, the Ankara-Moscow cooperation would boost Russian confidence to withstand the Western sanctions and to continuously pursue its foreign policy ambitions without considering the repercussions.
Energy has become an important aspect of international relations. The recent proposal of Moscow to make a gas hub in Turkey has generated widespread speculations. The demands of European nations for Russian gas are quite important to realize the actual prospects of the proposal. From the cooperation, Turkey will try to maximize its benefits and transform itself into an energy hub, while Russia at the same time, will be happy to export its gas to Europe and gain more leverage against its Western counterparts.