Turkey taps Austrian bank for Russian gas payments to skip sanctions

Turkey has found a workaround to continue paying for billions of dollars in natural gas imports from Russia after a US sanctions exemption expired, a senior Turkish official told Middle East Eye on Friday.

Last year, Washington imposed sanctions on Gazprombank, a key financial institution through which countries such as Turkey and Hungary had been processing payments for Russian energy.

In 2024, Turkey imported 45 percent of its natural gas from Moscow, potentially paying more than $8bn for these imports.

In December, the Biden administration exempted Turkey and other countries from sanctions on Gazprombank, allowing them to establish alternative payment channels.

The Trump administration extended this exemption for two months in March, following a phone call between Turkish Finance Minister Mehmet Simsek and US Treasury Secretary Scott Bessent. That exemption expired on 20 May.

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Turkey will now route its gas payments through Austria’s Raiffeisen Banking Group, which operates a subsidiary in Russia that is not subject to any sanctions, the senior Turkish official told MEE.  The official added that Washington is comfortable with this solution.

Meanwhile, Turkish Foreign Minister Hakan Fidan will visit Russia from 26 to 27 May at the invitation of Russian Foreign Minister Sergey Lavrov, Turkish foreign ministry sources said on Saturday.

During his visit, Fidan will be received by Russian President Vladimir Putin and will hold talks with Lavrov.

He is also scheduled to meet with other high-level Russian officials, including Deputy President Vladimir Medinsky - who led the Russian delegation at the 16 May Russia-Ukraine talks in Istanbul - and Defence Minister Andrey Belousov.

According to Turkish sources, discussions will focus on bilateral relations and potential next steps in areas of cooperation such as trade, energy and tourism.

Turkey has several key joint energy projects with Russia, including its first nuclear power plant, Akkuyu, and multiple gas pipelines running beneath the Black Sea.

middleeasteye.net