Companies with most to lose from damaged Russia-Turkey relations

Published Tue, Nov 24, 2015 · 04:13 PM

[MOSCOW] From gas exporters to airlines, Russian and Turkish companies have much to lose should ties between the two nations worsen.

Russia was the biggest source of Turkey's imports in 2014 at about US$25 billion, surpassing China, according to data compiled by Bloomberg. Some 12 per cent of all tourists to Turkey were from Russia last year, second only to Germany, Renaissance Capital said in a research note on Tuesday.

Turkey shot down a Russian jet along the Syrian border on Tuesday. President Vladimir Putin called it "a stab in the back." Stocks, the lira and the rouble dropped the most in emerging markets.

The following companies may suffer from any deterioration in Russian-Turkish relations, according to analysts and money managers:

1. Gazprom

Turkey is Russia's second-biggest market for gas exports, and relies on Gazprom to meet half of its gas needs. Russia plans a gas link to Turkey that would divert some exports away from Ukraine. Those discussions may end if tensions escalate between the two countries, said Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow.

2. Rosneft, Lukoil

Russia's key oil exporters including Rosneft OJSC, Lukoil PJSC and Gazprom Neft PJSC may see the prices of Urals crude blend rise from from recent lows. The face-off "has the potential to disrupt Russian oil supplies via the Bosporus and Dardanelles Straits," Ehsan Ul-Haq, a senior analyst at KBC Energy Economics, said by e-mail.

3. Magnitogorsk Iron & Steel OJSC The Russian steelmaker has invested more than US$2 billion in a Turkish plant since 2007. The unit, which opened in 2011, can produce as much as 2.3 million metric tons of steel products per year. MMK, as the Russian company is known, has been considering the sale of the asset since at least 2012, but hasn't reached a deal.

4. Turkish Airlines

The company became the biggest foreign carrier serving Russia in September and has increased flights to the country by more than 16 per cent in 2015 as international rivals cut services, according to a Bloomberg Intelligence analysis. It expects to carry more than 1 million passengers on Russian routes this year, and is considering an increase in the number of daily flights to Moscow and the addition of six destinations.

5. Sberbank

The lender's Turkish unit Denizbank, which it acquired from Belgium's Dexia SA in 2012, posted a 21 per cent drop in third-quarter profit. Sberbank in July reiterated a plan to continue its international presence and said Denizbank has been demonstrating "significant" financial growth.

6. Yandex

The Russian Internet search provider has a 5 per cent share in Turkey's search market.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to



Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here