Russia and Turkmenistan: 2023/24 Trade and Investment Dynamics

Posted by

By Emil Avdaliani


Neutrality and Connectivity

The neutrality of Turkmenistan serves as a favorable basis for the development of economically beneficial relations with the neighboring states as well as bigger actors. Ashgabat’s ties with Moscow fit into this dynamic.

Given Turkmenistan’s favorable geographical location and large potential in the development of transport and transit corridor, whether in north-south or east-west directions, Russia, sanctioned by the West, seeking alternative trade routes, and trying to re-route its trade to the so-called Global South, naturally, sees the growing importance of relations with Turkmenistan.

Moscow attaches particular importance to the expansion of international transport routes. Some of them coincide with what Turkmenistan wants. For instance, the two countries stepped up the work on the International North-South Transport Corridor (INSTC) to bring it to full capacity. Ideally, this could open up a wide field of opportunities for businesses related to the construction of infrastructure, service and trade and logistics centers, and the modernization of seaports.

Russia also looks at Turkmenistan as the latter is one of the main gas-producing countries in the world. This could impact Russia’s gas supplies to Central Asia, China and elsewhere. For some time, China held a monopoly on Turkmen gas purchases. However, in 2019, the Russian company signed a contract for the purchase of natural gas from Turkmengas for a period of five years – until June 30, 2024.


According to Russian officials, Russia Turkmenistan 2022 bilateral trade reached US$1 billion. This marks a significant increase from the previous year. In 2021, the trade turnover amounted to US$865 million, having decreased by 10.83% compared to 2020. Russia’s exports to Turkmenistan in 2021 amounted to US$725 million, an increase of 11.68% compared to 2020.  There is continuing growth, as trade turnover between Russia and Turkmenistan for Q1 2023 increased by 10.4%.

Close ties have been established between Turkmenistan and specific regions of the Russian Federation – the Republic of Tatarstan, the Astrakhan and Sverdlovsk regions, as well as St. Petersburg. A significant portion of Russian-Turkmen trade consists of gas purchases. The 2019 contract stipulates that up to 5.5 billion cubic meters of gas are annually supplied from Turkmenistan to Gazprom. For Turkmenistan, this deal is beneficial mainly because it allows them to have more confidence in negotiations with other buyers, primarily with the Chinese.

Major exports from Russia to Turkmenistan consist of machinery, equipment and vehicles, food products and agricultural raw materials, products of the chemical industry, metals and various products made from them, wood and pulp and paper products, mineral products.

Turkmenistan exports textiles and footwear, food products and agricultural raw materials, products of the chemical industry, machinery, equipment and vehicles, vegetables and certain edible roots and tubers, chemical threads, flat and similar threads from chemical textile materials.

Turkmenistan has significantly expanded the product range and is now turning from a single-product exporter of hydrocarbons into a multi-vector trade partner. For Turkmenistan trade with Russia is critical because it guarantees growth in exports of cotton, textile and agro-industrial products, and chemical products to Russia. Turkmenistan, in turn, is interested in cooperation with Russia in the field of the pharmaceutical industry (vaccines), shipbuilding (construction of sea vessels for the Caspian flotilla), machine tool and automotive industries (deliveries of KAMAZ and GAZ trucks) and high-tech products (telecommunications equipment, etc.) and exploration.

Overall, Russia-Turkmenistan trade balance has not yet reached full capacity. For example, the numbers are dwarfed by China-Turkmenistan trade which in 2021 amounted to US$7.35 billion: exports from Turkmenistan to China accounted for US$6.84 billion, of which more than 90% came from natural gas supplies.

Belt & Road, INSTC Transit

According to the preliminary results of last year, there has been a four-fold increase in the transit traffic of Russian goods through Turkmenistan to other countries in the region, and the transportation of containers within the specified transit has also increased by several multiples. In the context of logistical cooperation in the Caspian Sea, both sides emphasize the importance of increasing transportation between Turkmenistan and Russia along the lines of the ports of Turkmenbashi-Astrakhan and Turkmenbashi-Makhachkala.

The growth of bilateral trade is also a result of the greater level of land connectivity between the two countries. Turkmenistan lies on the eastern branch of the INSTC and has already expressed willingness to join the project which ideally would connect north and south part of the Eurasian landmass. Moreover, Turkmenistan, Russia and Kazakhstan signed a memorandum on creating a single logistics operator on the eastern branch of INSTC.

So far, these efforts paid off as the dispatch of container trains along the eastern route of the North-South corridor showed that the cargo is delivered 3 days faster than the traditional sea route from the Black Sea ports. The volume of freight traffic through the Russian-Turkmen line in 2022 increased by 11% compared to 2021- the number of containers transported was up by some 73.6% more than in 2021.


As of now, dozens of large Russian companies operate in Turkmenistan, especially the companies from Tatarstan such as Tatneft, Vozrozhdenie, and KAMAZ. The latter, for instance, with its last contract was for two thousand vehicles, became Turkmenistan’s leading supplier of trucks.

In general, almost 300 international documents have been signed between Turkmenistan and Russia. About 200 enterprises with Russian financial participation operate in the Central Asian country. According to the Russian leadership, by early 2023 more than 20 investment projects with the participation of Russian business in the amount of about US$3.5 billion are being implemented in Turkmenistan.

In January 2023 the Russian-Turkmen business forum took place in Ashgabat. An agreement to hold the event was reached in December 2022 in Moscow as part of a meeting of the Intergovernmental Russian-Turkmen Commission on Economic Cooperation. The goal of the Russian-Turkmen business forum was to deepen trade, economic and industrial cooperation between Russia and Turkmenistan. More than 300 representatives of business circles and organizations take part in the forum from the Russian side. Political willingness to advance the bilateral ties is apparent. At the initiative of the Russian-Turkmen Business Council, the Center of Russian Entrepreneurs was opened in early 2023 in Ashgabat.


Russian and Turkmen cooperation is also unfolding in the oil and gas sector, the electric power industry, in renewable energy sources and nuclear power. Russian companies provide their services in modernizing the Turkmenistan’s electric power grid with the involvement of domestic contractors for the supply of equipment. For example, the Russian company Power Machines (based in St. Petersburg) is involved in the modernization of the Mary hydroelectric power station and a thermal power plant in Turkmenbashi, the strategic Caspian port city. Russian oil companies are ready to participate in joint projects to develop fields in Turkmenistan, the construction of gas infrastructure in the Caspian Sea.

Challenges however remain. Geographic distance is one of them. Currently poor trans-Caspian connectivity is also a bottleneck to trade and logistics as is the inadequate condition of Turkmenistan’s highway networks throughout the country. Another issue is the uncertainty over Turkmenistan’s neighbour Afghanistan, and the distrust which exists between Iran and Turkmenistan. Yet, overall incentives to bigger trade prevail and Russia’s look eastward serves as a driver behind traditionally considered as inconspicuous Russia-Turkmenistan trade relations.

Emil Avdaliani is a professor of international relations at European University in Tbilisi, Georgia, and a scholar of silk roads.

Related Reading


About Us

During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.

We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email or visit