Oil and gas is Erdogan's trump card against Europe

When Turkish President Recep Tayyip Erdogan wanted to threaten the Kurdistan Regional Government (KRG) days before its planned independence referendum in September 2017, he only needed to remind the Kurds that their treasured oil revenue reaches the market via Turkish territory. “We have the tap. The moment we close the tap, then it’s done,” Erdogan said at the time.

With the completion of the TurkStream pipeline, Erdogan now holds a similar political and economic trump card which he can use at will to turn the pressure on and off on Europe.

For Russian President Vladimir Putin, the TurkStream pipeline is an industrial love letter, signaling the alliance between the two leaders is as strong as ever since their public reconciliation in 2016. Russia — the world’s second largest oil producer and instigator of an OPEC debacle that has sent global oil prices into a nosedive — now has a coveted connection to European markets, with Turkey holding the keys.

When coupled with contracting demand under COVID-19 lockdowns, a wise observer should take note of how quickly an oil and gas hub like Ukraine was checkmated by an economic sea change and some cunning political maneuvering.

For European leaders seeking to steer the bloc away from reliance on Russia’s resources following its annexation of Crimea in 2014, the opposite has come to pass — not only is the EU now reliant on Moscow for 40 percent of its natural gas imports, but the success of the TurkStream project demonstrates that governments need natural resources far more than they need European unity.

But for Europe’s populist strain, however, seeking fruitful alliances beyond the continent-wide bloc has earned an eager ally in Erdogan. Multiple European leaders, notably Boyko Borisov of Bulgaria and Aleksander Vucic of Serbia – two figures who, like Erdogan and Putin, have built their presidencies on the back of populist, strongman rhetoric.

Controversy surrounded the project long before Turkey’s involvement. Previously named South Stream, an identical pipeline had been planned to bypass Ukraine, connecting to Russia via Bulgaria, but a flurry of EU sanctions in response to Russia's annexation of Crimea saw the project buried in late 2014 — only to be quickly replaced with the announcement to build TurkStream. On the very same day, Russia announced the partnership with Turkey – opening the floodgates to Russia’s oil without the worry of sanctions.

TurkStream is not one pipeline but two pipes: one exclusively servicing the Turkish market, while the other has become the gateway for gas to much of southern and eastern Europe, generating billions of euros in transit tariffs for the Turkish economy. And the pipeline is expanding rapidly. It will be operational in Serbia by December, while extensions are already being planned towards Austria and Slovakia.

This puts Erdogan in a powerful geopolitical position – the growth of the pipeline will not only lead to further revenue, but also provide industrial leverage which Turkey can use against any number of international bodies, from NATO to the EU. Ankara’s regional ambitions, already eyeing Africa and the Middle East, will grow.

However, Erdogan’s budding partnership with Putin causes complications for his relations with Europe. The pipeline deliberately bypasses Ukraine – redirecting transit tariffs previously circulated into Ukraine’s economy to Turkey’s. It also causes discomfort for NATO, an organization that publicly condemned Russia’s annexation of Crimea and sided with Ukraine in the ensuing diplomatic spat – the very country that stands to lose the most from the opening of TurkStream. The pipeline allows Putin to entice Erdogan away from NATO – traditionally opposed to Russian expansionism – with promises of an economic partnership that could succeed at Europe’s expense.

However, recent violence in Syria, which saw at least 59 Turkish soldiers killed in Russian-sanctioned clashes before the announcement of a ceasefire, exposes the frailty of the relationship between the two countries even amidst economic success. Erdogan needs to toe the line between Russia and NATO carefully, lest he worsen relations with both, but he will be hopeful that the benefits of projects such as TurkStream will significantly lessen Turkish economic dependence on its allies.

The European Union finds itself in a weak position where it cannot definitively retaliate against Turkey, Russia or the pipeline. One of its member states, Bulgaria, has been actively involved in the project’s development, and now seeks to profit as a transit point to the rest of Europe. Another member, Hungary, has engaged with Moscow to extend the pipeline, while it is expected that others will do the same in the near future. Meanwhile, Germany has pushed ahead with the construction of Nord Stream II, another major link to Russia, which also bypasses Ukraine.

There’s little that the EU can do to deter its member states from purchasing gas through TurkStream. Russia is second only to America in terms of global gas production, and Russian gas was already cheaper for European leaders to import even before the construction of new infrastructure. To protect American companies in the European market, the US Senate has attempted to retaliate against Russia’s gas expansion, most notably through the recent sanctions passed by the House of Representatives, which penalize companies developing both TurkStream and Nord Stream II. However, these sanctions are rendered effectively meaningless since TurkStream was completed before the cutoff date in the law.

Putin has been a man determined to lessen Russia’s dependence on Ukrainian infrastructure, and he was going to make it happen with or without European approval. From a Turkish perspective, it’s difficult to argue against the advantages of TurkStream regardless of sanctions. Turkey has benefited in every facet from the development of the pipeline: the project is immensely profitable, provides a resource that’s sorely needed, and puts Erdogan in a powerful political position.

Erdogan stood victorious while opening the pipeline, alongside the leaders of Russia, Serbia, and Bulgaria. Right-wing leaders are famously against European regulations and in favor of the free market, two conditions that have been met with TurkStream where they weren’t with South Stream. The image of the four men standing before a physical monument to their success sent a clear message: this is a new power, one which can defy European regulations and succeed regardless. Meanwhile, for those on the losing side of this project – Ukraine, the EU and NATO – new strategies are required to counter the Russian industrial juggernaut, lest it carry Turkey and its eccentric leader further to the East.

Ause Abdelhaq is a Dublin-based writer focusing on international relations and global industrial politics, and has worked with the United Nations on humanitarian response coordination in Somalia. He has a degree in Law from University College Dublin.

The views expressed in this article are those of the author and do not necessarily reflect the position of Rudaw.

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