Turkey Requests U.S. Exemption as Sanctions on Gazprombank Strain Energy Ties

Turkey is in talks with the United States seeking an exemption from sanctions imposed on Russia’s Gazprombank, a key financial institution for energy transactions, to maintain gas payments to Russia, Energy Minister Alparslan Bayraktar said on Tuesday.

The U.S. sanctions, effective November 21, targeted Gazprombank, Russia's third-largest bank. Since April 2022, the bank has facilitated payments for Russian gas under the "gas-for-rubles" scheme, enabling European and Turkish buyers to settle gas bills amid Western restrictions on Russian financial institutions.

Turkey, with an annual natural gas demand of approximately 50 billion cubic meters (bcm), relies heavily on Russian gas. The TurkStream and Blue Stream pipelines supply the bulk of this demand, making Russia Turkey's largest gas supplier.

"Our discussions with the U.S. are aimed at ensuring the continuity of payments and avoiding any disruption in our energy security," Bayraktar said, highlighting Turkey’s critical dependency on stable energy imports.

Hungary, another significant consumer of Russian gas, also criticized the sanctions. Hungarian Foreign Minister Péter Szijjártó, speaking on November 22 at the Istanbul Energy Forum, labeled the U.S. move a "deliberate attempt to jeopardize the energy security of certain Central European states." Hungary meets over 80% of its gas needs through Russian supplies.

Turkey’s plea underscores the complex energy dynamics in Europe and its neighbors, as countries dependent on Russian gas navigate sanctions-induced challenges. Analysts note that disruption in payment mechanisms could exacerbate Turkey's energy vulnerability, particularly during the high-demand winter months.

Despite efforts to diversify, including investments in renewable energy and liquefied natural gas (LNG) imports, Turkey remains closely tied to Russian energy infrastructure. The U.S. has yet to respond publicly to Turkey's request for a sanctions exemption.