Russia’s crude oil exports dip…
The global oil markets have…
Turkey’s President Tayyip Erdogan and Russia’s President Vladimir Putin agreed on Friday to bolster cooperation after a four-hour meeting, a joint statement from the two nations has revealed as cited by Reuters.
As part of the deal, which would increase cooperation in the transportation, agriculture, finance, and construction industries and present a seemingly united front against “terrorist organizations” in Syria, Turkey agreed to change how it pays Russia for natural gas. Under the new agreement, Turkey has agreed to pay Russia partially in rubles, Deputy Prime Minister Alexander Novak said after the meeting.
Russian President Vladimir Putin announced months ago that unfriendly nations would be required to pay for Russian energy through a rubles account to insulate Russia from the effects of Western sanctions. While Russia would not consider Turkey an unfriendly nation, Turkey’s payment in rubles for Russia’s natural gas would protect those payments from sanctions, and could smooth things over with Moscow, who might otherwise frown on Turkey’s activities in Syria.
Last month, Turkey also helped broker a deal to ship grain between Russia and Ukraine, further strengthening ties between Russia and Turkey.
Turkey opposes the Kurdistan Workers’ Party (PKK) and its affiliate, YPG—long considered by Turkey, the United States, and the EU to be a terrorist group—which has waged an insurgency for decades against the Turkish government in support of Kurdish minorities in Turkey. Russia has strong ties with Syrian President Bashar al-Assad, who controls most of the airspace in northern Syria.
Erdogan, facing an election next year, is in a complicated situation, with Turkey experiencing skyrocketing annual inflation of nearly 80%. This economic crisis would no doubt intensify without Russian gas supplies.
Turkey imports nearly half of the gas it uses from Russia.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
Turkey is currently facing a severe economic crisis with annual inflation hitting 80%. This crisis would no doubt intensify without Russian gas supplies.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert