Analysis |

Sanctions on Russia Sap Its Power to Influence the Middle East

Turkey’s approval for Finland and Sweden’s entry into NATO shows how the war in Ukraine has shortened Putin’s reach, forcing Moscow to rely on Iran to skirt sanctions

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Russian President Vladimir Putin, right, speaking with his Iranian counterpart,   Ebrahim Raisi, in Ashgabat, Turkmenistan, on Wednesday.
Russian President Vladimir Putin, right, speaking with his Iranian counterpart, Ebrahim Raisi, in Ashgabat, Turkmenistan, on Wednesday.Credit: Mikhail Klimentyev/Sputnik/AP
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

Leonid Slutsky, the chairman of the Russian parliament’s Committee on International Affairs, had something to say to Turkish President Recep Tayyip Erdogan on Wednesday. Slutsky, who heads the right-wing Liberal Democratic Party and was mired in a sexual harassment scandal four years ago, was the first to respond to Turkey’s decision to lift its veto on Finland and Sweden joining NATO.

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“If I were Turkey, I would not be too flattered about the assurances I received in exchange for not vetoing the Finns’ and Swedes’ accession to NATO,” he wrote on his Telegram channel. He didn’t say what he meant by the word “assurances,” but U.S. President Joe Biden, who met with Erdogan for about an hour during NATO’s summit in Madrid, has said he supports selling F-16 fighter jets to Turkey.

Nor is this the only benefit Turkey is expected to reap from withdrawing its threat to veto the two countries’ membership. And Erdogan gained a nice political reward, since in his grappling with the White House and Europe, he once again proved his skill at imposing his will.

Sweden and Finland are now likely to hand over dozens of Kurdish activists whose extradition Erdogan demanded in exchange for lifting his veto. For this to happen, both countries will have to change their extradition laws in a way that wrecks their status as safe havens for political refugees. That would presumably draw public scrutiny and could even spark a political crisis.

In other words, Erdogan has managed to force countries that assail him on human rights to take a step that could destroy them as standard-bearers in this field.

The four hours Erdogan spent with Finland’s president and Sweden’s prime minister in Madrid on Tuesday were also nerve-racking for Vladimir Putin. The Russian president apparently thought Erdogan would remain his bulwark against NATO expansion, just like Ankara refused to join the sanctions Western countries imposed on Russia. This assumption rested on two foundations that Moscow deemed stable enough to ensure Turkish support.

Three weeks ago, Russian Foreign Minister Sergey Lavrov visited Turkey at the head of a large delegation. Officially, the purpose was to discuss a Black Sea passage so that Ukrainian wheat could get to Turkey and then on to the Middle East and Africa, mitigating the global wheat shortage and the threat of famine in Africa. Such a route would require a military escort and supervision to prevent arms transfers, as well as acceptable payment arrangements.

A Kurdish checkpoint in northern Syria last month.Credit: Stringer/Reuters

But the deal, which would also pay economic and political dividends to Turkey, was dependent on Ankara acquiescing to Moscow’s demand that it not invade Syria to expand its security zone in the Kurdish region and further its goal of ousting the Syrian Kurdish fighters, whom it deems terrorists. This, incidentally, is an issue where Russian, Iranian and American interests overlap; Washington vehemently opposes a Turkish invasion of the Kurdish region, since it views the Kurds as essential allies.

For now, Erdogan has rejected both the Russian request and the American pressure and merely “listened” to Iran’s objections. Tehran fears that a Turkish invasion would undermine Syrian President Bashar Assad’s ability to control all of his country.

Still, Ankara managed to extract a Russian statement that Moscow “understands” Turkey’s security concerns. That statement offered more than a hint that Russia would accept a limited Turkish incursion into Syria.

Russia thought this limited support would suffice to extend Erdogan's veto of Finland and Sweden's entry into NATO. But Turkey also has other weighty considerations.

Its renewed diplomatic relations with Saudi Arabia and the promises of billions of dollars in investments from both the Saudis and the United Arab Emirates, its need for 40 American F-16s and 80 kits to upgrade its older planes, and the chance to repair ties with the White House combined to tilt the balance.

Saudi Arabia and the UAE, like Turkey, haven't applied sanctions on Russia, and Russian oligarchs have taken over the real estate markets in both countries. Still, Riyadh and Abu Dhabi are deeply afraid of Russia’s improving position in the Ukraine war and its close ties to Iran.

Biden’s planned visit to Saudi Arabia in two weeks also contributed to the Saudis’ diplomatic efforts. At Washington’s request, Riyadh coordinated with Ankara on their diplomatic positions toward Russia.

Moscow-Baghdad axis

Moscow’s bitter disappointment over Turkey’s decision isn’t the only sign that Russian influence over the Middle East is wavering. Russia also has a raft of economic interests in Iraq, especially in the autonomous Kurdish zone.

Russian oil companies Rosneft, Gazprom and Lukoil have invested billions of dollars in developing Kurdish oil fields. Moreover, they control roughly 80 percent of the pipeline between the Kurdish region and Turkey and have promised to invest another $1.8 billion in expanding it so it can transport a million barrels of oil a day.

In addition, the companies won concessions for five large oil fields in southern Iraq from the Iraqi government and have invested there. All these investments give Russia leverage over Iraqi politics, an issue on which it has coordinated with Tehran.

Iranian President Ebrahim Raisi, left, welcoming Iraqi Prime Minister Mustafa al-Kadhimi in Tehran on Sunday.Credit: Iranian Presidency/AFP

But the long dispute between the Iraqi government and the Kurdish zone’s leaders over how Kurdish oil should be exploited and the revenues divided has convinced Iraq to set up a state-owned company to run the region’s oil fields. The government has also asked the Kurds to send it all the agreements they've signed with foreign oil companies over the last 18 years so it can calculate the revenues it deserves.

If this decision is carried out, the Russian companies’ investments could be nationalized by Iraq, or the Iraqi government could demand that they pay it compensation for the profits the Kurds reaped without paying taxes. But so far, the political crisis in Iraq – no government formed eight months after the last election – has postponed the implementation of the decision.

On the other hand, before that election, at least there was a government in Baghdad with which Moscow could sign agreements and settle disputes.

The shuttle to Tehran

Now the Russian companies will have to decide how to proceed and whether they should even retain their holdings in the Kurdish region.

Russia is also being forced to rely more and more on Iran to circumvent international sanctions. Lavrov, a frequent flier to the Middle East, visited Tehran last week to forge a system of economic cooperation that would get Iranian goods into Russia and Russian goods into India via Iran.

Russia has also been importing reams of electronics from Iran, including U.S.-made appliances, computers and cellphones that apparently reach Iran via the Gulf states. According to Iranian news reports, Russian businesspeople are learning from their Iranian counterparts how to circumvent sanctions and use nonbank payment methods.

Trade between Russia and Iran currently totals some $5 billion a year, but the countries have signed long-term agreements that include Russian commitments for billions of dollars of investments in Iran. They also include the sale of advanced Russian arms to Iran, like S-400 radar systems and Su-35 fighter jets.

On Wednesday, at a summit in Turkmenistan of countries bordering the Caspian Sea, Putin met with Iranian President Ebrahim Raisi; the two announced that they planned to ramp up bilateral trade. Raisi also proposed setting up a financial mechanism for countries in the region that would bypass the Western banking system. This would “prevent a situation in which we’re under pressure.”

Russian Foreign Minister Sergey Lavrov laying a wreath at Martyrs' Lane in Baku, Azerbaijan, late last month.Credit: Russian Foreign Ministry/AP

In addition, Russia and Iran plan to open a route to replace the traditional route for Russian exports to India, which runs through the Baltic Sea to the Strait of Gibraltar, then through the Mediterranean Sea and the Suez Canal. The new route would run south through Turkmenistan to Iran via the Caspian Sea, then continue overland through Iran to the UAE and from there by ship to India. This would reduce transport costs by about 30 percent and cut shipping times in half.

The result of all the above is that Russia, once a great power that could dictate to Iran or at least influence its policy, has now become dependent on Iranian cooperation.

Incidentally, the new export route is also expected to reduce shipping through the Suez Canal, and consequently Egyptian revenues. But with Russia under heavy sanctions, the largely pro-American Arab Middle East is of less interest to Moscow.

The question now is what will happen to the investments Russia has promised in several Mideast countries.

Back in 2015, for instance, it agreed to build a nuclear reactor in Egypt to be paid for with a 22-year Russian loan of around $25 billion. Moscow also pledged to invest in reviving Egypt’s deteriorating railways and help develop an industrial zone along the Suez Canal. Two weeks ago, to show that it plans to keep this promise, Russia announced that it had begun making components for the reactor.

But given Russia’s economic problems and the sanctions, Cairo is dubious about Moscow’s ability to honor these commitments. Granted, at a meeting of the St. Petersburg International Economic Forum in mid-June, Egyptian President Abdel-Fattah al-Sissi praised the “special relationship” between Egypt and Russia to the skies. But meanwhile he's counting more on the investments promised by Saudi Arabia.

Thus if Russia had hoped to exploit American weakness in the Middle East and Biden’s policy of disengaging from the region, all signs seem to show that Moscow's own position is deteriorating.

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