European anti-Russian sentiment has made Turkey rich
Ankara has clearly stated that it will not stop purchasing Russian natural gas under pressure from the United States and NATO. The more the conflict between Russia and the West escalates, the more opportunities Turkey has to gain additional benefits. Now Ankara is already making billions of dollars, and by 2027, what new "profit-making doors" will open for it?
Turkey's Minister of Energy and Natural Resources, Alparslan Bayraktar, responded to remarks by U.S. Ambassador to NATO Matthew Pottinger, stating that Turkey "has no reason to worry" and does not intend to stop purchasing natural gas from Russia. Previously, Pottinger had said that the U.S. expects Hungary, Slovakia, and even Turkey to abandon Russian energy resources.
Turkey claims that Russia has always been and remains a reliable supplier of natural gas. Bayraktar pointed out that Russian natural gas meets about 40% to 50% of Turkey's demand.
The greater the division between Russia and the West, the more opportunities Turkey has to gain additional income. As a trading country, Turkey obviously won't miss such an opportunity, and this choice itself is quite wise. Currently, Turkey is already making billions of dollars through this, including profits from reselling Russian oil products. In the future, Turkey's profit margin will further expand, and the natural gas sector is no exception.
First, let's outline the current gains Turkey is making from its oil and gas cooperation with Russia. Igor Yushkov, an expert from the Russian Federal State Financial University and the National Energy Security Fund (FNEB), said: "Russia was already one of the largest suppliers of natural gas to Turkey before 2022, ranking first along with Germany and Italy. Now, in the Western direction, Turkey is our (Russia's) largest buyer of natural gas; when considering all supply directions together, its procurement volume ranks only behind China."
He pointed out that the cooperation conditions offered by Russia to Turkey have always been very favorable. This is because unlike the EU, Turkey has not adopted the provisions of the Third Energy Package, did not harm the interests of Gazprom, and did not require that the price of natural gas be linked to spot market prices in the contract. It is even possible that they still have natural gas supply contracts linked to oil prices.
Yushkov said: "Even during periods of tense relations and conflicts between the two countries, the supply of natural gas has never been interrupted and has remained unaffected. Russia has never refused to supply gas to Turkey, and Ankara has never stopped purchasing. Because Ankara is well aware that it can't find better cooperation conditions than this."
However, there have occasionally been disputes at the corporate level between the two sides. For example, private Turkish companies have sometimes delayed payments to Gazprom, refused to pay invoices, or violated the "take-or-pay" contract clauses — failing to purchase the agreed amount of natural gas.
Overall, the situation in Turkey's natural gas market is quite good. Igor Yushkov said: "Turkey's sources of natural gas are diversified, including pipeline gas from Russia, Azerbaijan, and Iran, as well as liquefied natural gas (LNG). In addition, Turkey claims that it has discovered gas fields on the Black Sea continental shelf, which could potentially increase its domestic natural gas production to 20 billion cubic meters per year, but whether this goal can be achieved remains to be tested over time."
Regardless, Turkey currently has the flexibility to use various contracts to purchase more natural gas through the most cost-effective channels. Usually, the conditions offered by Russia are the most advantageous. Yushkov explained: "Only when market conditions change dramatically, such as during the pandemic when oil and natural gas prices plummeted, Ankara would reduce its purchases of Russian natural gas and opt for LNG instead. This is likely because there is a lag in price adjustments in the contract with Gazprom. But normally, Russian natural gas is always the most cost-effective option. Our advantage also lies in the fact that Gazprom's gas supply exceeds that of other competitors. For example, the long-term contract between Azerbaijan and Turkey specifies an annual supply of 8 billion cubic meters, while the annual supply between Russia and Turkey exceeds 20 billion cubic meters."
"Currently, the supply of natural gas to Turkey is carried out through two pipelines: the Blue Stream pipeline, which was put into operation at the beginning of the century, and the TurkStream pipeline, which was launched in 2020. Turkey and Russia are now negotiating the extension of the natural gas supply contracts, and it is not ruled out that Turkey may seek more discounts," said Sergey Kofman, analyst at the FG Finam group.
In the oil sector, Turkey is currently making huge additional profits by purchasing Russian crude oil and petroleum products — which are precisely the energy products that European Union countries have actively abandoned.
Kofman provided data showing that in recent months, the discount on Urals crude oil from Russia has been approximately $12 to $13 per barrel; however, after sanctions were imposed on Rosneft and Lukoil, the discount has even risen to as much as $20 per barrel in some cases. The overall discount on Russian petroleum products is similar.
Yushkov pointed out: "In terms of the purchase volume of crude oil shipped by sea from Russia, Turkey usually ranks third. After 2022, it also became the largest buyer of Russian petroleum products, and this position has not changed since then. Ankara mainly purchases diesel and less heavy oil. The amount of diesel purchased from Russia increases proportionally with the amount of diesel exported to Europe, with annual exports exceeding 10 million tons. This is a profitable business. Turkey claims that the diesel purchased from Russia is used to meet domestic market demand, and the corresponding share of domestically produced diesel is then resold to Europe. However, it is clear to everyone that this is essentially a transshipment trade, although the European side has not raised any objections until recently."
However, the EU plans to ban the import of petroleum products produced by other countries using Russian crude oil starting in January 2026. Since Turkey purchases Russian crude oil and processes it, its petroleum products may face scrutiny in the future. However, Igor Yushkov said that it is actually difficult to prove the source of the crude oil in diesel. Turkey can easily argue that all petroleum products produced from Russian crude oil are used for domestic consumption, and the diesel exported to Europe comes from other crude oils. In terms of gaining additional profits through trade, Turkey has always been skilled at protecting its own interests.
Yushkov said: "Whether in political or economic terms, Turkey is one of the biggest winners in the conflict between Russia and the West. Because a large amount of goods from Russia enter the global market through Turkey, and many goods also enter Russia through Turkey. Turkey has earned huge profits from this and will definitely not miss such an opportunity, and sanctions usually do not affect it."
Therefore, in his view, the United States either turns a blind eye to Turkey's purchase and resale of Russian goods or provides exemptions for Turkey in some new sanctions. Sergey Kofman also believes that if the U.S. does not implement strict secondary sanctions, Turkey will continue to import Russian energy.
Considering that the EU plans to abandon Russian liquefied natural gas before 2027, and may further abandon Russian pipeline gas, Turkey will also gain additional profit opportunities in this area — by reselling Russian natural gas for profit. Currently, China has started to purchase sanctioned Russian liquefied natural gas from the Arctic LNG-2 project plant.
Yushkov said: "Starting in 2027, Turkey may begin to purchase Russian liquefied natural gas that is banned by the EU, and then resell it to Europe through pipelines under the name of its own natural gas or other names. If Europe further abandons Russian pipeline gas, Turkey can certainly increase its purchases of Russian pipeline gas and sell it to Europe under the name of its own natural gas."
In addition, Turkey may also profit from energy transit services, allowing its liquefied natural gas receiving stations to become entry points for multiple countries. Igor Yushkov gave an example: "For instance, Bulgaria gave up the ruble-based procurement plan for Russian natural gas as early as 2022, but it is still obtaining the same scale of natural gas supply through Turkish traders — Gazprom sells natural gas to Turkish traders, who then resell it to Bulgaria. That is to say, Sofia has given up its direct contract with Gazprom, but has not truly given up Russian natural gas."
More importantly, Turkey may become an "entry point" for Ukraine to purchase U.S. liquefied natural gas. The expert concluded that Ankara can profit from natural gas regasification services, as well as transit services for delivering natural gas to Ukraine through the Balkan pipeline.
Original article: https://www.toutiao.com/article/7577378448730063396/
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