Russia’s Return to Grains Deal Is a Sign of Turkey’s Growing Influence

Having refused to join Western sanctions against Russia, Turkey has become the only remaining window to Europe for Russian businesses and individuals.

After Moscow pulled out of the Ukrainian grain deal, it took Turkish President Recep Tayyip Erdogan just two days for Russia to revert to the deal and drop the idea of ​​blocking grain export Ukrainians. The speed of this reversal shows how much Ankara’s influence over Moscow has grown over the past eight months, dramatically shifting the balance of relations in favor of Turkey.

Moscow initially agreed to unblock Ukrainian ports to allow the export of grain in the summer, when Russia seemed to have the advantage in the war. The Kremlin has been invited to sign the agreement by Turkey, major importers of Russian and Ukrainian grain in the Middle East, and the UN.

It was also in Russia’s interest to accept the deal. The simultaneous easing of sanctions to allow grain and fertilizer exports from Russia was not formally billed as part of the deal, but was agreed with the US and EU.

The grain deal also provided the Kremlin with a valuable additional lever of influence over the West. Russian President Vladimir Putin began hinting that Russia could pull out of the deal in September, shortly after the successful launch of the Ukrainian military’s counteroffensive.

The Kremlin’s official reason for criticizing the deal was that Ukrainian grain was supposed to be largely sent to Europe, rather than to the poorer countries where it was most needed, although the destination of the Ukrainian grain did not matter. part of the terms of the agreement.

In reality, Putin was irritated that despite the lack of formal sanctions, European companies had not resumed business as usual with their Russian counterparts. Banks continued to delay transactions or simply refused to work with Russian entities; several shipments of fertilizers remained stuck in Baltic ports; and foreign buyers sought alternatives to Russian suppliers.

Russia found an excuse to use the grain deal as leverage over the West on October 29, following an attack on the Crimean port of Sevastopol. The Russian military said Ukraine launched a drone attack from a civilian ship sailing in the designated corridor for grain shipments and ships escorting grain shipments were damaged in the attack. Moscow called it a terrorist attack and suspended its participation in the deal.

In return for returning to the deal, Putin demanded written security guarantees for military and civilian vessels in the grain corridor. There were also non-public demands, such as other banks restoring their relationship with the state-owned Rosselkhozbank (Russian Agricultural Bank). The bank had previously played no significant role in the international grain and fertilizer trade, but the Kremlin reportedly decided to make it a one-stop shop for agricultural export payments, protecting it from sanctions in the same way as it protected Gazprombank by funneling payments for gas exports there.

Within days of Russia’s withdrawal from the deal, Erdogan announced that the grain could be exported without Russia’s involvement and spoke to Putin on the phone, after which Moscow suddenly backtracked. and reneged on the deal.

Moreover, the Russian President promised that “in any case” Russia would not prevent the export of Ukrainian grain to Turkey. In other words, even if Russia pulls out of the deal again, it will still be possible to ship Ukrainian grain out of Black Sea ports. There was much talk in diplomatic circles that Ankara had “leaned heavily” on Moscow, reflecting the Kremlin’s new weakness.

At the beginning of this year, Turkey needed its partnership with Russia more than Russia. Russians made up the bulk of tourists vacationing in Turkish resorts (about 4 million in the first nine months of this year), and Turkish diplomats were pleading with Moscow to lift sanctions on Turkish agricultural products. It was Russia that laid the TurkStream gas pipeline to Turkey along the bed of the Black Sea; The Russian atomic agency Rosatom is building a nuclear power plant (Akkuyu) for Turkey; and Moscow is Ankara’s key partner in the Caucasus, Syria and Libya.

At the time, Russia could afford to be choosy: in 2021, Turkey was not even among Russia’s top ten foreign trading partners (it was in eleventh place). All that changed with Russia’s invasion of Ukraine. Trade turnover between Russia and Turkey doubled in the first nine months of this year compared to the previous year to reach 47 billion dollars, and at the end of the third quarter of this year, Turkey may well have become one of Russia’s top three trading partners, behind only China and Belarus – and winning over Germany.

Tech goods have seen particularly stratospheric growth: Russia now depends on Turkey for equipment maintenance and other manufacturing processes, as technology imports to Russia from the rest of the world, including China , decreased significantly. Turkey appears to have become a transshipment hub for tech goods shipments from Europe. Italy, for example, has significantly increased its supply of goods to Turkey, while Turkish exports to Russia have increased in similar proportions. Having refused to join Western sanctions against Russia, Turkey has become the only remaining window to Europe for Russian businesses and individuals.

Meanwhile, Turkstream is now the only route for Russian gas to Europe fully controlled by Moscow, following damage to two Nord Stream pipelines from recent explosions. Today, Moscow and Ankara started discussing the creation of a gas hub in Turkey.

Russian propaganda presents the development of cooperation with Turkey as proof that Russia is not isolated on the international scene. But it also has its downside. The Kremlin can no longer ignore Erdogan’s own foreign policy ambitions and interests. Russian companies will have to give their Turkish partners deep discounts to ensure they don’t close the last window in the European market.

There will also be a price to pay at home. Turkey has never been popular among Russia’s ultra-patriots, and now they are outraged by their country’s return to the grain deal, which they see as a sign of weakness.

Western sanctions following Russia’s invasion of Ukraine and the severing of relations with the West have seen Russia’s cooperation with several non-Western states expand dramatically. Compared to the previous five years, Russia’s average monthly trade volumes this year have quadrupled with India, doubled with Turkey and increased by more than 60% with China. However, the possible loss of these partners would not only deprive Moscow of a considerable part of its income in hard currencies, but would also accelerate the rate at which the Russian economy lags behind technologically, due to the lack of imported equipment and components. .

The Kremlin still has various tools to pressure the West in its arsenal, including nuclear blackmail, but Russian demand for imports of various goods and technologies is increasing day by day. As a result, Moscow will increasingly have to consider its few remaining partners, take their interests into account when defining policies, including with regard to Ukraine, and pay a domestic political price, as well as a financial cost. The message from these partners to Putin is clear and clear: now “the time is not for war”, and the conflict with Kyiv has already lasted too long.

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