Turkey, India, China – Russia is frantically looking for someone to replace the West as a trading partner, but its new “friends” are not selfless. They do not hesitate to bargain, and their positions are increasingly strengthened.
Turkey knows these things – it not only positions itself as a mediator in the conflict between Russia and Ukraine, but also takes advantage of the opportunities that the war provides, writes the German “Di Welt”. For example, Ankara has demanded from Gazprom a more than 25 percent discount in the price for energy supplies in 2023, as well as for part of last year’s, reports the Bloomberg agency.
But Turkey is not the only country in such a strong negotiating position vis-a-vis Moscow – China and India are also benefiting from the tectonic changes in the Russian economy and are increasingly dictating terms and prices to Moscow.
Doubling trade between Turkey and Russia
Due to the restriction of energy exports to Western Europe, Turkey has become the largest consumer of Russian gas. It covers 45 percent of its domestic consumption. Trade volumes between Russia and Turkey have doubled and Moscow has become Turkey’s largest trading partner, displacing Germany.
Ankara, for its part, is already Russia’s third largest importer after China and Belarus. However, not all goods that officially enter from there are Turkish – some of them are from Europe or the USA and officially cannot be imported due to the sanctions.
In an analysis of the huge change in Russia’s economic positions, the American magazine “Foreign Policy” states that in 2021, 83 percent of Russian gas went to European countries. And the total export of oil and gas brought about half of the revenues to the treasury. As the anniversary of Putin’s invasion approaches, however, it becomes apparent that Russia has finally lost its former economic power, the publication commented.
Europe cannot be replaced so easily
Putin has no leverage and cannot replace Europe as a trading partner, writes “Foreign Policy”: “He is finding out the hard way that it is much easier for consumers to replace unreliable suppliers of raw materials than for suppliers to find new markets “.
Russia’s previous annual revenues of 150 billion cubic meters of pipeline gas to Europe have been replaced by only 16 billion to China, as well as small profits from sales of liquefied natural gas on the world market, the publication also writes. China does not have sufficient pipeline capacity to absorb more quantities for at least another decade, and prefers local and diversified energy sources.
The publication also draws attention to another important foreign policy aspect: the Kremlin is unable to force Saudi Arabia to seriously reduce OPEC+ production quotas, as it did in October last year. The reason is that Washington has frozen the implementation of arms and technology deals important to Riyadh.
“Unilateral dependence on several countries”
“If there has always been mutual dependence between Russia and its traditionally most important trade partner – Europe – now the country is falling into unilateral dependence on several countries,” commented Mikhail Krutichin from the consulting company “RusEnergy” to Die Welt.
In the first ten months of 2022, trade between Russia and China reached a record $153.9 billion, an increase of one-third. Beijing can replace a lot, but it is not as technologically leading as the West, Alexander Shirov, director of the Institute for Economic Forecasts at the Moscow Academy of Sciences, commented on this occasion.
Before the war, China accounted for about a quarter of Russian imports, while now that share should be “much more than a third, maybe 40 percent,” according to Ika Korhonen, director of the Institute for Economies in Transition at the Central Bank of Finland. According to him, this means that no country is as dependent on its imports from China as Russia. The only exception is probably North Korea.
Even stronger positions for the new “friends” of the Kremlin
India is also buying more and more oil and gas from Russia – including because of its dissatisfaction that Western sanctions have failed to account for developing countries and raised energy prices, writes Die Welt. After all, New Delhi’s purchases of Russian oil have exceeded one million barrels per day, or about 10 percent of Russia’s energy supply. Thus, Moscow has succeeded in displacing Iraq and Saudi Arabia in the Indian market.
But since the European Union imposed an embargo on Russian oil exports by sea and a price cap in early December, demands for concessions from Moscow’s new partners have become increasingly insistent. And from February 5, another measure of the West comes into force – a ban on the export of Russian oil products. It will further strengthen the price negotiating positions of China, India and Turkey.
.
