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Turkey defers $600 million Russian energy payment under deal

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Turkey has deferred payment of Russia $600 million natural gas bill to 2024, two sources said on Wednesday.

First such postponement under a deal which was announced last week underlines deepening ties between Ankara and Moscow.

According to the agreement, up to $4 billion in Turkish energy payments to Russia may be postponed until next year, both sources told Reuters under condition of anonymity.

Turkey, which is preparing for elections on Sunday, depends heavily on energy imports and Russia is its largest supplier.

The gas payments deal relieves some pressure on Turkey’s foreign reserves, which have been depleted by unorthodox economic policies meant to support the lira, as well as rising energy prices after Russia’s invasion of Ukraine last year.

“Officially a payment worth $600 million has been postponed to next year. The increase in energy prices had a huge impact on this,” one of the sources with knowledge of the matter said.

The source said Turkey could push back further such payments in the coming months depending on the course of energy prices.

The Russian and Turkish energy ministries, and their respective energy companies Gazprom and Botas, have not responded to requests for comment on the issue.

Turkish Energy Minister Fatih Donmez said last week that Turkey and Moscow agreed a deal allowing Ankara to defer energy payments up to a certain amount, but did not give details.

Polls show President Tayyip Erdogan could lose the election largely due to a cost-of-living crisis and the sharp depreciation of the lira, largely brought on by his government’s programme of slashing interest rates despite high inflation.

Turkey’s energy import bill hit a record near $100 billion last year and in the 12 months to February, it imported 39% of its total 53.5 billion cubic metres (bcm) of natural gas from Russia.

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