Russia and Turkey restoring ties to gain political, economic and strategic advantages


As Russian Minister for Economic Development Alexey Yulukaev visits Turkey on Aug. 6, there are hopes that a number of factors will encourage both the Russian and Turkish sides "restoring their bilateral ties in sphere of economy, energy, agriculture, transport and other sectors", Ekho Moskvy reported today citing Russian Deputy Foreign Minister Alexei Likhachev.

Both Russia and Turkey are seeking to restore relations for gaining political, economic and strategic considerations. They will also like to improve their bargaining position vis-a-vis the European Union and also to release pressure from Brussels which is posed in the form of many demands and regulations posed by the EU.

Russia is recalculating its considerations in view of falling energy prices, lesser market share and reduced revenues, Economy Professor Pavel Rodkyn told Daily Vzglyad Tuesday. For that reason Russia will prefer to have a significant deal with a major buyer. Having the option of the Turkish Stream as a southern outlet will improve Russia's gas supply options outside the preview of the stricter EU regulations.

Turkey is looking to improve its bargaining prospects to ensure an important role in the future energy landscape, extract concessions for future gas purchases and secure uninterrupted supplies to meet domestic needs. Moreover, the prospects of increased sales of Russian grain to Turkey are quite high. Nikolai Protsenko wrote in Vzglyad, Aug 2nd.

Moscow is also mindful that in recent months Gazprom faced a 0.8 percent decline in its exports to the CIS countries, noted Daily Vzglyad on Tuesday.

Russia will prefer to have a pipeline extended through Turkey to increase its prospects for delivering more gas to Europe before competitors such as Azerbaijan via Southern Gas Corridor or Iranian and Turkmen suppliers find their way to reach the European markets, Ilgar Grabunov wrote for Eurasia Monitor Tuesday.

Russia is prepared to restore economic ties with Turkey seeking better alternative prospects. This is because Moscow will prefer to wriggle "out of the arrangement with Ukraine as the contract expires in 2019" and instead invest in Turkish Stream an option which will bring higher returns, Pavel Felgenhauer wrote for Eurasia Monitor Tuesday. In the long term, Turkey will be a major purchaser and when it comes to extending gas supply lines for Russia there will fewer regulatory bindings and less hassle as compared to options passing through European territories.

"To have a bigger share in Turkey's energy market Russia is interested to bypass the Ukraine transit pipeline system by sending gas to Southeastern Europe through a hub in Turkey," added Felgenhauer.

In recent months, circumstances have lead both Turkey and Russia to scale down the plans for the Turkish Stream project to make it a smaller, quicker and more affordable option. Such an option might prove attractive not just for Turkey but also for countries in South-East Europe who may find themselves better off to receive gas from an alternate other than Ukraine, Yuri Zainashaev wrote in Vzglyad July 26.