Russia’s military operation and invasion attempt in Ukraine, which is against international law and human rights, will bring along new challenges, regulations, logistics and transportation route planning for the global economic system and global trade. Let's say in advance. The current developments in the north of the Black Sea and the almost complete closure of airspace for Russia toward the West will not only incur an incredible cost hike in passenger and cargo transportation but will also probably be reflected in the prices of land and rail transportation soon.
In the context of all modes of transport from Asia-Pacific to Europe, it will impose important new tasks on the "central corridor," where Turkey is the main collector and distributor.
For this reason, with several significant projects including Istanbul Airport (IGA), the 1915 Çanakkale Bridge, the Yavuz Sultan Selim Bridge and the Osmangazi Bridge, the Marmaray and Eurasia Tunnel projects and the Filyos Port, Turkey has declared a wide area covering northern Aegean, Marmara and the western Black Sea as the “golden ring” in the name of the global supply chain. Turkey's role in the global supply chain may multiply, as the tension between Russia and Ukraine under wartime conditions forces all international companies from food to automotive, from machinery and parts to energy, to supply from different geographies.
For global companies, the fate of their factories in Ukraine and Russia will turn into a complete mystery if the tension is prolonged and the sanctions against Russia are further expanded. This will, in turn, increase the risk of creating a domino effect on supply chains that concern important sectors after the global coronavirus pandemic. Together, Ukraine and Russia control about one-third of the world wheat market, 19% of the world’s corn supply and 80% of the global traded sunflower oil. Moreover, Russia is the third-largest supplier of nickel for lithium-ion batteries. The two countries also lead global copper and platinum production.
At the same time, the global trade of palladium, an essential ingredient for global chip manufacturing, has also been affected by these developments, and its price has increased by 80% since mid-December. Therefore, the prolonged tensions in the region could push the global chip production and supply process into a deeper crisis. While the world economy and the global supply chain have already paid a price due to the pandemic and accelerated its restructuring, the Russia-Ukraine tension is now putting an additional burden on this process and will cause an increase in production costs, especially in Europe and North America.
After the annexation of Crimea, while Russia focused on measures to reduce the share of gas exports to the European Union in its total exports, it was tragicomic that the EU increased its dependence on Russian gas. For Europe, the solution to the liquid natural gas (LNG) problem is not easy at all. Because this requires more facilities and additional contracts with supplier countries, especially Qatar. However, Qatar announced that even if it does its best, its current capacity is fully filled with forward-looking contracts, and it is not possible at this stage for them to supply more gas to Europe.
Therefore, Turkey's indispensable importance for Europe's energy supply security and especially its natural gas supply security comes to the fore once again. An internationally recognized expert, Sohbet Karbuz points out the importance of the acceleration of Europe's work with Turkey for the Turkmen gas flow to Europe via Turkey with the Trans-Caspian pipeline and/or for northern Iraq natural gas as part of the Trans-Anatolian Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects. At this point, I would like to remind the European interlocutors of the critical importance of transporting Israeli, Jordanian, Egyptian and Palestinian natural gas in the Eastern Mediterranean via Turkey, through the Turkish Republic of Northern Cyprus (TRNC), to Europe.
