Will Aramco throw a lifeline to cash-strapped Turkish economy?

Oil giant Saudi Aramco met with around 80 Turkish contractors this week to discuss $50 billion worth of potential projects in the kingdom, Bloomberg reported Thursday.


The head of the Turkish Contractors Association, Erdal Eren, told Bloomberg that potential projects are planned through 2025.

“Aramco wants to see as many Turkish contractors as possible in its projects,” Eren said. “They are planning refinery, pipeline, management buildings and other infrastructure construction that will be worth $50 billion in investment.” Aramco will soon draw up a list of contractors that will work on the projects, and the parties will reconvene again soon in Saudi Arabia, according to Jack Dutton of al-Monitor.

The move marks a significant moment for both countries’ economies. Aramco is the third most valuable company in the world and has an unparalleled influence on global oil markets. Turkish businesses, meanwhile, have been hit hard by the war in Ukraine and several deadly earthquakes earlier this year that claimed the lives of around 50,000 people.


Over the years, the two major regional powers had grown more distant over Erdogan’s ties to the Muslim Brotherhood and the 2018 killing of the Saudi journalist living in US Jamal Khashoggi. Khashoggi was killed in 2018 at the Saudi consulate in Istanbul by government agents from the kingdom. His murder created a rift between Riyadh and Ankara.

But experts tell Al-Monitor that this new financial agreement could be part of an effort to reset ties and establish Ankara’s economic independence from the West.

Imdat Oner, a former diplomat and senior policy analyst at Jack D. Gordon Public Policy Institute of Florida International University, said that Aramco’s interest in engaging Turkish contractors can be seen as part of the ongoing reconciliation efforts between Ankara and Riyadh.

“The transfer of the Jamal Khashoggi case from Turkey to Saudi authorities, following the Turkish court’s decision to halt the trial of the 26 Saudis accused of his murder, was a significant step in this process,” he told Al-Monitor. “Closing the Khashoggi investigation was a key demand of Riyadh before any reconciliation.”

The Turkish economy is going through a significant currency crisis, with the lira devaluating and with Erdogan only winning his third term by a narrow margin. He has no choice but to change his approach.

Soner Cagaptay, the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute, said that Saudi Crown Prince Mohammed bin Salman (MBS) has been “very generous” toward Erdogan “for over a year now.”

“As a result, last year, the crown prince gave $5 billion to put into Turkey’s economy with no strings attached,” Cagaptay said. “That money I think together with other monies from the Gulf, UAE and Russian money coming in helped Erdogan stabilize the lira, which was in freefall, and also hand out some of these monies in the form of very generous social security handouts.”


He added, “Wage increases, loan forgiveness and cheap credit and all of that, so you could say that together … Putin and Gulf monarchies have helped Erdogan win elections, and I think this is the next stage.”


Cagaptay noted that Erdogan mentioned only two foreign actors — Russia and the Gulf states — in his most election campaign which saw him get elected for a third term, and he said he would reward them.  Erdogan repeated the same promise in his speech given during the presidential  ball.  As per demands from Gulf Arab states, he mended fecnes with Egypt’s al Sisi, with both countries possibly exhcnaing ambassadors within three months.


Turkish media frequently reports speculative stories about Gulf Arabs being ready to gobble up cheap Turkish real assets, such as the flag carrier, and the telecoms twins Turkcell and Turk Telekom.  Arab companies may also be interested in some media outlets, such as Dogan Group papers Hurriyet and Milliyet, as well as Ciner’s Haberturk Media Empire.

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.