Cairo: Hani Kamal El-Din
Türkiye is negotiating with the United States to lift sanctions related to its dealings with Gazprombank (GPB), enabling continued payments for Russian gas supplies, as reported by Bloomberg.
Energy Minister Alparslan Bairaktar emphasized that without exemptions from these sanctions, “we won’t be able to pay Russia.”
“If we can’t make payments, we can’t purchase goods. If no exceptions are made, it could become a major issue for Turkey,” he explained.
Bairaktar also cited previous sanctions exemptions related to Iran as a precedent.
In spring 2022, after the West imposed wide-ranging sanctions on Russia, Russian President Vladimir Putin ordered that “unfriendly” countries settle gas payments in rubles. To facilitate this, buyers were required to open accounts with Gazprombank, one of the few large Russian banks that had not been included in the U.S. SDN list (Specially Designated Nationals List), prohibiting transactions with U.S. residents.
However, on November 21 of this year, the U.S. Treasury Department tightened sanctions on over 50 Russian banks, including GPB, making it impossible for foreign entities to process transactions through it.
What happens now? How will the issue be resolved? How did Turkey even end up on the list of “unfriendly countries” required to pay for gas in rubles, considering its key role as one of Gazprom’s primary customers and a key hub for gas flowing to Europe?
In August 2022, during talks in Sochi, Vladimir Putin and Recep Tayyip Erdoğan agreed that at least 25% of the Russian gas supplied to Turkey would be paid for in rubles, according to Mikail Neyjmakov, Director of Analytical Projects at the Agency for Political and Economic Communications.
These intentions were later reaffirmed at a meeting between the two leaders on the sidelines of the SCO summit in September of the same year. Many observers, as well as Turkish officials, believed this arrangement was beneficial for Turkey. For example, Turkey’s then-Energy Minister Fatih Dönmez in September 2022 noted that this decision would reduce Turkey’s reliance on dollars and lower the overall cost of paying for such supplies.
However, the move raised the risk of future U.S. sanctions on Turkey. In the fall of 2022, a survey revealed that 52% of respondents supported partial payments in rubles, despite the potential for sanctions.
The Impact of U.S. Sanctions on Gazprombank
The latest U.S. sanctions against Gazprombank are part of a broader strategy to increase pressure on Russia’s economic ties with its partners. Initially, Washington had a softer stance on Gazprombank compared to other Western nations like the UK, which included the bank in its sanctions list as early as March 2022.
What’s driving the U.S. to impose these sanctions, and how far will they go to disrupt Turkey’s dealings with Russia? Would the U.S. escalate tensions with Ankara to block gas cooperation?
According to experts, while the U.S. wants to limit Russia’s economic interactions with its partners, any demands Washington makes of other nations may eventually become subject to negotiation.
Regarding the role of Donald Trump, some see him as a defender of U.S. oil and gas interests. In this context, would U.S. pressure increase under his leadership?
Can Turkey Secure an Exemption?
While U.S. sanctions are stringent, there are provisions for exceptions. For example, until June 28, 2025, there is an exemption for the Sakhalin-2 project. A similar exception could be made for Turkey.
If Turkey and the U.S. fail to reach an agreement, alternative payment mechanisms could be used for transactions between Russia and Turkey. Some experts doubt that the sanctions on Gazprombank are aimed specifically at blocking Russian gas buyers, but rather reflect broader strategic goals.
A Delicate Balance Between Political and Economic Interests
While the sanctions are a significant development, the issue might be framed more as a political maneuver by Turkey, seeking to resolve specific domestic challenges.
What could the outcome of the negotiations be? And how might they affect Turkey’s gas trade and relations with the U.S.?
