Iran unable to replace Russia in Turkey’s international market

Despite being on opposing sides of Syria’s civil war, Turkey has been an important trading partner for Iran. However, Iran also shares a strategic relationship and deep ties with Russia, with both countries being aligned on many geopolitical issues in the Middle East. Due to the strong ties Iran shares with both countries, increased tensions between Turkey and Russia have put Iran in an uncomfortable situation.

Iran is a neighbouring country of Turkey, making them both traditional trading partners. Both countries are a part of the Economic Cooperations Organization, and have seen their trade relations steadily increase over the past decade. By 2005 trade between the two nations had increased to 4 billion USD, from 1 billion USD in 2000, by 2010, two-way trade reached 10 billion USD, and by 2014, had reached 13.7 billion USD. Turkey is Iran’s only significant non-Asian gas export market and has helped Iran evade implemented international sanctions.

Despite good trade relations between both Tehran and Ankara, since tensions between Russia and Turkey intensified over Turkey’s shooting down of a Russian Su-24 fighter jet on 24 November 2015, Iran has stated that in case of a possible gas shortage in Turkey, Iran will not increase its gas supply to Turkey.

Turkey gets 56 per cent of its gas from Russia, with Iran providing another 18 percent. Yet, during a conference in Tehran on 28 November 2015, Iranian Oil Minister Bijan Zanganeh, said that Tehran is only capable of delivering gas to Turkey within the framework of an existing contract with Ankara. Iran is committed to delivering up to 10 billion cubic meters of gas per year, and if Turkey’s gas demands increase due to its increased tensions with Russia, Iran has stated that it will not be able to supply more than the already existing agreed amount.

Given Iran’s close ties to both countries, it has attempted to remain neutral in the situation that has seen Russia place a number of sanctions on the trade relations it shares with Turkey. After the shooting down of the plane, the Russian government announced that it will soon ban imports of certain products from Turkey, including several types of meat products, milk, dairy products, fish, seafood, fruits and vegetables. As Turkey’s exports of agricultural goods to Russia equate to around 1.3 billion USD, Russia is also expected to feel the blow of this loss. However, Iran is refusing to make things worse, and has also stated that it will be unable to replace Turkey as an exporter of cultural goods to Russia.

In spite of the increase in tensions between Ankara and Moscow, and the uncomfortable position it has forced Iran into, trade relations between Teheran and Ankara have remained unscathed and continue to prosper. On 1 December 2015, it was announced by the Managing Director of Maku Free Trade Zone, that Turkish companies have expressed interest in constructing a 6 billion USD petrochemical project in the Iranian city of Maku – highlighting one way in which trade relations between both nations continue to grow.