The threat of new US sanctions affects trade between Türkiye and Russia

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Seven informed sources said that the US threat to impose sanctions on financial companies that deal with Russia has cast a shadow over trade between Türkiye and Russia, disrupting or slowing some payments for both Russian oil imports and Turkish exports.

The sources said that the US executive order issued in December didn’t explicitly target energy, but it complicated some Turkish payments for Russian crude as well as Russian payments for a wide range of Turkish exports.

The US sanctions aim to limit the Kremlin’s revenues and disrupt its war in Ukraine without stopping the flows of Russian oil to global markets, to avoid a jump with political repercussions in US gasoline prices as President Joe Biden seeks re-election in November.

According to oil market traders, payment problems similar to those Türkiye is now facing have already disrupted Russian oil supplies to India and complicated its supplies to the UAE and China.

Russia is the largest exporter of crude oil and diesel to energy-scarce NATO member Türkiye, supplying 8.9 million metric tons of crude oil and 9.4 million tons of diesel to its Black Sea neighbor in the 11 months to November.

Four of the sources said that the emerging payment problems are due to Turkish banks reviewing business and tightening dealing with Russian customers.

Two oil industry sources said that these problems didn’t disrupt Turkish crude supplies, as they only delayed a small number of shipments.

A source at a major Russian oil company said that Russian oil exporters had not received payments from Türkiye for two to three weeks.

A Turkish source familiar with the payments issue said, “It has become difficult to make some energy payments to Russia, especially after the threat of new sanctions at the end of December; Some payments were disrupted”.

He added, “The originally agreed-upon method had to be changed or payment postponed, but the shipment continued… There may be issues on a shipment-by-shipment basis”.

“Payment problems started after December,” a Turkish oil industry source said.

The focus isn’t on oil imports, but it’s worrying.

“It didn’t affect daily performance, but it reminds us that a problem may arise at any time”.

Ankara opposes Western sanctions on Moscow, although it criticized the Russian invasion of Ukraine two years ago.

It managed to maintain close relations with both Moscow and Kiev throughout the conflict.

Although Ankara has said sanctions won’t be circumvented on Turkish soil, Washington intensified pressure last year to halt the passage of dual-use goods that Russia could use on the battlefield, and warned that Turkish banks and companies could be exposed to US sanctions.

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