Recent threats from the US to impose sanctions on financial institutions conducting business with Russia have reverberated through Turkish-Russian trade, causing disruptions and delays in payments for imported oil and Turkish exports, exclusive insights obtained by Reuters indicate.
This is based on a Reuters report.
The US executive order, issued in December, has cast a shadow over energy transactions between Turkey and Russia, complicating payments for Russian crude oil and hampering the smooth flow of Turkish exports, according to sources cited in the report.
These sanctions, while targeting Russia’s revenue streams, have inadvertently affected the intricate web of financial transactions between the two nations, with Turkish banks tightening compliance measures with Russian clients.
Turkish banks, under increasing scrutiny due to the threat of sanctions, have adopted a cautious approach, leading to delays in payments to Russian oil exporters, causing disruptions in the energy supply chain.
Sources reveal that payments have been stalled for weeks, highlighting the growing complexity of conducting financial transactions amid geopolitical tensions.
Despite Ankara’s opposition to Western sanctions on Moscow, Turkish banks have been compelled to review their dealings with Russian clients, underlining the precarious balance Turkey seeks to maintain in its diplomatic relations.
The Turkish Treasury and banking watchdog have refrained from commenting on the issue, while Washington continues to exert pressure on Turkish institutions to comply with sanctions.
Russian and Turkish officials have acknowledged the challenges posed by the sanctions, with the Kremlin expressing awareness of the tightening regulations imposed by Turkish banks.
Meanwhile, a senior US State Department official spoke on the importance of foreign financial institutions adhering to sanctions and reiterated ongoing discussions with Turkish counterparts.
Preliminary trade data reveals a significant decline in Turkish exports to Russia, signalling the initial impact of the sanctions on bilateral trade.
Machinery exports have been particularly affected, raising concerns about the broader implications for non-oil trade.
(With inputs from Reuters)
