Russia and Turkiye: The 2023 Trade and Investment Dynamics

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With Presidents Putin and Erdogan about to meet, we discuss the bilateral trade dynamics 

By Emil Avdaliani

The Russian President Vladimir Putin is meeting the Turkish President Recep Erdogan at south Russia’s Sochi, a resort town on the Black Sea. The main thrust of the meeting will be discussions concerning the Black Sea grain deal, which Moscow walked away from in July, while Ankara is keen to broker a revival. In addition, Putin and Erdogan are set to discuss numerous other issues related to trade and bolstering bilateral relations. Russia-Turkish trade has jumped by 57% since the conflict in Ukraine broke out. Both will be looking to further expedite these relations. In this article we examine the current state of Russia-Turkish trade and investment dynamics.


Western sanctions imposed on Russia have redirected global trade flows, with Turkiye becoming one of Russia’s key trading partners. In its efforts to build closer trade links with the Middle East and the Global South at large, Russia has paid special attention to fostering greater trade and economic ties with Turkiye, the key nodal state with the potential to alleviate Moscow’s trade and financial isolation from the West. As has occurred with most of the Middle Eastern and Asian economies, Turkiye has greatly benefited from re-orientation of trade. As the country’s economy experiences a difficult period, ties with Russia offer the potential to minimize negative economic trends. The booming relations between Russia and Turkiye touch upon an increasing number of sectors, from the expected launch of a joint nuclear power plant project in Turkiye later in 2023, to the work on the Turkish Stream gas pipeline and the sale of S-400 air defence systems.

Russia-Turkiye Bilateral Trade

In 2022, trade between the two countries amounted to US$62 billion. This represented a significant increase over the previous year, with the 2021 trade turnover between Russia and Turkey standing at US$33 billion. In 2022, exports from Turkiye to Russia increased by US$3.5 billion, reaching US$9.3 billion, 60.3% higher than in 2021. According to the Turkish Statistical Service (TURKSTAT), in the first quarter of 2023, Russia’s share in Turkish exports reached 5%  of the total – against 1.9% in the same period in 2022.

Due to the doubling of Turkish exports to Russia, in 2022, Turkiye ranked second (after the EU as a whole) in terms of the size of its trade deficit with Russia. Energy exports traditionally form the basis of Russian deliveries to Turkiye. In particular, in 2022, almost 40% of Turkish pipeline gas imports (or 21.6 billion cubic meters from a total of 54.7 bcm were provided by Gazprom.

A closer look at the structure of the bilateral trade reveals that Russia mainly imports from Turkiye raw food and beverages, boilers, machines and mechanical devices, spare parts, edible fruits and nuts, plastics and products made from it, electrical machinery and equipment, and organic chemicals. Exports from Russia to Turkiye primarily consist of gas, oil, mineral fuels, mineral oils and products of their distillation. A significant part of Turkiye’s imports from Russia are mineral fuels which in 2021 amounted to US$14.3 billion and grew during in 2022 to US$41.8 billion, representing 71% of the total Russian exports to Turkiye.

Russia also exports grain, copper and copper products, precious stones and metals, and pearls. Agricultural and food products from Russia into Turkiye increased from US$2.5 billion in 2021 to US$3.1 billion in 2022. In 2022, Turkiye purchased over US$473 million and US$355 million worth of organic chemicals and fertilizers.


Russia and Turkiye are also connected via the TurkStream natural gas pipeline. It begins at the Russkaya compressor station near Anapa in Russia’s Krasnodar Region, crossing the Black Sea to the receiving terminal at Kıyıköy in Western Turkiye. The pipeline feeds Turkish needs, however, gas also flows onwards to Serbia, and probably in future to Hungary. The 2022 Russia–European Union gas dispute cut off deliveries to Bulgaria, but these will likely resume with the new Bulgarian government having a more pro-Russian energy stance.

TurksStream has changed the regional gas flows in South-East Europe by diverting transits away from Ukraine and the Trans Balkan Pipeline system. In 2022, Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin planned for Turkiye to become an energy hub for all of Europe.  According to Aura Săbăduș, a senior energy journalist focusing on the Black Sea region, “Turkiye would accumulate LNG from various regional producers, including Russia, Iran and Azerbaijan, coupled with its own Black Sea gas – and then sell it on as Turkish supplied. European buyers wouldn’t know the origin of the gas.” Ukraine has threatened to destroy the pipeline, a move that if carried out would seriously damage its relations with Ankara.

In addition, during 2022, over 30 million tons of Russian oil transited through the Bosporus and Dardanelles to Southeast Asia. Trade analysts believe that the trade turnover between Russia and Turkiye may grow to US$100 billion by 2030.

Sanctions Impacts

There are, however, hurdles to Russia – Turkish trade. This includes the Western sanctions imposed on Russia and the attempts by the United States to prevent the re-export of valuable ‘dual-use’, Western manufactured products to Russia. For example, Washington recently imposed sanctions on four Turkish companies for violating US export controls and exporting goods to Russia. In March 2023, Turkiye suspended the re-export of sanctioned goods to Russia following intensive consultations with the West.

Various signs of the negative effects from the sanctions are already visible. For example, the import of goods from Russia to Turkiye in June 2023 amounted to US$2.91 billion, a decline of 43% in comparison with the figures recorded the previous June in 2022.

Overall, in the first half of 2023, Turkiye imported a total value of US$24.7 billion of goods from Russia, being 10.8% lower than registered in the same period of 2022. Russia, however, still remains a leading exporter to Turkiye – in the period of January-June this year, 13.4% of Turkiye’s total imports came from Russia.

That compares with Chinese exports to Turkiye, which currently constitute 12% of the country’s total imports. However, the fall in Russian imports into Turkiye can also be explained not only by the threats of potential Western sanctions but also a relatively difficult economic situation across Turkiye itself. For example, in comparison with June 2022, Turkiye’s total June 2023 imports fell by 17.5%, a decline in value of US$5.5 billion.

Russia-Turkiye Bilateral Investments

The total inflow of foreign direct investment (FDI) into Turkiye during the first six months of 2023 amounted to US$4.8 billion. The Netherlands accounts for 23% of these, while Russia is second at 15%, followed by the UAE and Germany.

In 2022, 1,363 companies with Russian equity were registered in Turkiye. This figure is a 600% increase from that recorded in 2021, when Russian entrepreneurs opened only 177 companies across Turkey, and in 115 in 2020. This is related to a boom in tourism – over 5 million Russian tourists visited Turkiye rather than the EU last year, accounting for about 20% of the total tourist flow. This sector continues to attract Russian private investment.

There are knock-on investment benefits. From late 2022, Russian citizens are the leading investors in Turkiye in terms of purchased properties in Turkey. For example, in May 2023 Russians purchased 991 residential properties, followed by Iranians and Ukrainians. In 2022, Russians made up the biggest share of the number of immigrants (25%) to Turkey, followed by citizens of Ukraine (8.1%) and Iran (6.5%).

The Turkish side is also one of the closest business partners for Russia in the construction industry. For 20 years, Russia ranked first among foreign countries in terms of market size for the Turkish construction business. Out of the ₽10 billion (US$100 million) investments made by Turkish companies into Russia 25% of this goes to Tatarstan – a Russian republic with a historically strong Turkic population.

Overall, the existing trends indicate a similar pattern which dominates Russia’s relations with other Middle East and Asian countries. Russians invest less than the Europeans, and when they do it is mostly in the real estate sector. Moreover, Russia mostly focuses on expanding bilateral trade relations rather than investment growth. These trends were apparent before the conflict in Ukraine began, however have further crystallized since February 2022.

Emil Avdaliani is a professor at European University and the Director of Middle East Studies at the Georgian think-tank, Geocase.

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