For the first time since the beginning of the war, Turkey drastically reduced exports to Russia

The boom in mutual trade between Russia and Turkey, which began against the background of the war in Ukraine, has stalled after the United States and the European Union threatened retaliation against countries violating the sanctions regime.

According to official statistics published by the country’s Ministry of Commerce, the volume of exports from Turkey to the Russian Federation fell by 20% in January. Within a month, goods worth USD 1.043 billion arrived in Russia from Turkey, compared to USD 1.313 billion a month earlier.

After more than tripling its exports to Russia to a historically high level, Turkey became the second largest supplier to the Russian market last year, displacing Germany, the Kremlin’s once largest trading partner in the EU.

But now Turkish exports are shrinking for the first time since the beginning of the war, said the chief economist of the Institute of International Finance (IIF).

Shipments to Russia simply “are not worth the trouble they can bring,” Brooks argues: they are too small to solve the Turkish economy’s balance of payments deficit, and the associated sanctions risk is significant.

Turkish authorities have been warned of these threats by US officials who have traveled to Ankara at least three times over the past year to discuss sanctions policy.

The last such visit, attended by US Treasury Secretary Brian Nelson, took place in February. The United States demanded an end to the supply of sanctioned goods to Russia, including towards the military-industrial complex. According to US data, in the period March-October the value of such exports reached USD 800 million, including equipment worth USD 300 million and electronics worth USD 80 million.

Turkey’s response was almost immediate. From March 1, Turkish customs services stopped processing documents for the transit of goods to Russia. Parallel import channels, which Russian companies had been building with difficulty for almost a year, were attacked: the supply of goods imported to Turkey from third countries for subsequent re-export to the Russian Federation was blocked.

The transit halt is related to the sanctions, a senior Turkish official explained to Bloomberg.

According to the Turkish Ministry of Commerce, Russia ranked third on the list of Turkey’s largest export markets in January, behind Germany ($1.826 billion in January) and the United States ($1.186 billion).