Despite EU sanctions, TurkStream pipeline deliveries continue

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Despite the new EU sanctions imposed earlier in the month on TurkStream operator South Stream Transport B.V., which revoked the pipeline's operator of its export license, South Stream Transport issued a statement saying gas transportation would continue uninterrupted.

"As a result of the introduction of new sanctions, on September 18, 2022, the export license of South Stream Transport B.V., the operator of the TurkStream offshore gas pipeline, through which Russian gas is transported through the Black Sea to consumers in Turkey and European countries, was prematurely revoked," the statement read.

However, the company said, "The imposition of new sanctions does not preclude South Stream Transport B.V. from continuing to transport gas."

The operator emphasized that the gas supply of various industries and millions of households in Turkey and European countries would not be affected in the short or long term.

South Stream Transport B.V. has applied for the renewal of its export license and is currently awaiting a response from Dutch authorities, as per the company.

Earlier this month, Turkish President Recep Tayyip Erdogan pointed fingers at Europe's sanctions against Russia as the reason behind their energy crisis. 

In June, Turkey announced it would not be joining the West in enforcing sanctions against Russia.

Kremlin Spokesperson Dmitry Peskov blamed sanctions imposed on Russia for its halt of gas deliveries to Germany via the Nord Stream pipeline. Russia accounted for approximately half of Turkey's own natural gas purchases last year, with Turkey vowing to gradually pay for Russian imports with rubles at a summit between the Turkish and Russian leaders in Sochi earlier this month.

Turkey's payment of Russian gas in rubles, avoiding the dollar, will protect the Turkish economy from its diminishing hard currency reserves. 

Analysts believe the deal will guarantee Russia's continued supply of gas to Turkey through the TurkStream pipeline running under the Black Sea, however, Erdogan disclosed that he did not expect Turkey to experience any energy deficits this year. "I think Europe will have serious issues this winter, we do not have such a situation," he said.

Global energy price surges caused by Russian supply interruptions themselves caused by the draconian EU sanctions on the country contributed to the economic crisis in Turkey that has witnessed annual inflation skyrocket to 80% and the lira plunge in value. 

Turkish officials so far have brushed off the inflation impacts, calling the price gains transitory and blaming the war in Ukraine for causing the global increase in food and commodity costs. Nevertheless, Turkey has the world’s deepest negative interest rates when adjusted for inflation, and with the lira down approximately 27% against the dollar this year, Turkey has become the worst performer in emerging markets.