AGP Executive Report

Turkey–Israel Syria Tensions: Israel says it hit Syria’s Abu al-Duhur airbase to stop Turkish forces; Turkey and Syria deny any plan, but the dispute has escalated into harsh public exchanges and reports of naval course changes in the Mediterranean. SCO Summit in Bishkek: Leaders including Erdoğan, Putin, Xi and Modi backed a “Bishkek Declaration” on security and trade as the bloc pushes a more multipolar order. Turkey–Russia Nuclear Cooperation: Erdoğan and Putin signaled further Russian-built nuclear projects after talks tied to Akkuyu timelines. Shipping Risk for Turkish Trade: Turkish shipping firms suspend services to Russia over heightened Black Sea dangers after attacks and losses, raising costs and disruption fears. Turkey Economy Watch: Unresolved war pressure shows up in August PMI, while GDP growth and inflation signals remain in focus for markets. Fintech Expansion: Kazakhstan’s Kaspi expands in Turkey after acquiring a Rabobank unit, aiming to add more financial services via Hepsiburada. Aviation/Travel Deals: Turkish Airlines launches a Miles&Smiles economy award sale (30% miles off) on select Middle East & Africa routes.

Turkey-Russia Energy: President Erdoğan signaled more nuclear projects with Russia after talks with Putin, saying Akkuyu is in its final stages and Ankara will pursue additional power plants together. SCO Summit & Regional Trade: At the SCO in Bishkek, Erdoğan framed the bloc as a driver for transport corridors and energy security, while Pakistan PM Shehbaz Sharif stressed water must never be weaponised. Security & Organized Crime: Turkey and Georgia pledged tighter operational cooperation against cross-border organized crime, citing digital-enabled fraud, drugs and violence. Justice & Rule of Law: Turkey marked the new judicial year with a push for “terror-free Türkiye,” while court proceedings continue in high-profile cases. Defense Industry Showcase: ASELSAN displayed unmanned naval systems at TEKNOFEST Mavi Vatan, including kamikaze underwater and surface platforms now in serial production. Shipping & Costs: A new report links delays and rising costs for Turkish-built CalMac ferries to an extra ~£20m bill in Scotland. Cyprus Ferry Disaster: Turkish search-and-rescue located the wreck at deep-water depth off Kyrenia as investigations and detentions continue. Business & Markets: Turkey’s factory activity hit a 3-month high, and the country’s banking sector net profit topped 596 bln liras in Jan–July.

Makkah Defence Alliance: Turkey, Saudi Arabia and Pakistan moved to institutionalise their joint defence framework, agreeing to set up a permanent secretariat in Saudi Arabia with Pakistan’s first secretary general for a three-year term, as the pact’s operational structure takes shape. SCO Summit Diplomacy: Turkish President Erdoğan joined leaders in Bishkek for the 25th Shanghai Cooperation Organisation summit, where Russia, China and India also held bilateral talks amid US-Iran tensions and a push for a more multipolar order. Cyprus Ferry Fallout: A ferry disaster off northern Cyprus left at least eight dead and 20 missing; the captain and crew were detained and appeared in court as divers try to retrieve data from the vessel. Regional Air-Defence Race: Israel and Greece signed a roughly $3.6bn “Achilles Shield” multilayer air-defence deal, a move widely read as aimed at regional threats as Turkey-Greece tensions rise. Turkey in Space: Türkiye signed the Artemis Accords at NASA, reinforcing its push to deepen space cooperation. Turkish Defence Exports: Five Turkish defence firms made Defense News’ Top 100 list, with Aselsan leading and overall 2025 sales up strongly.

Cyprus Ferry Disaster: Turkish Cypriot authorities arrested the Kyrenia ferry captain and seven crew members after the vessel capsized on the route to Mersin, killing at least eight and leaving 20 missing; survivors described panic, water ingress and the captain allegedly refusing to turn back as relatives wait at the port. Mecca Defense Pact: Turkey’s FM Hakan Fidan said Ankara is working on a roadmap for more countries to join the Pakistan-Saudi-Türkiye Mecca Joint Defense Agreement, while Pakistan and Türkiye agreed to expand defense cooperation through a new strategic committee. SCO Summit Diplomacy: President Erdoğan arrived in Bishkek for the Shanghai Cooperation Organisation summit as Iran’s Pezeshkian urged comprehensive peace in West Asia and welcomed the Mecca pact. Turkey Macro Data: TurkStat reported 2Q GDP growth of 2.3% y/y, with revisions to prior quarters. EU Tech Regulation: The EU designated ChatGPT, Reddit and Roblox as “very large” platforms under the Digital Services Act, tightening compliance timelines. Defense Industry Watch: Greece and Israel signed the €3bn “Achilles Shield” air-defense deal amid rising regional tensions.

Black Sea Shipping Stress: Turkish shipowners warn Ukraine-linked attacks are pushing Black Sea operators toward bankruptcy as vessels are sidelined and insurance, financing and maintenance costs keep climbing. Cyprus Ferry Disaster: A passenger ferry capsized off occupied Kyrenia with about 267 aboard; at least 8 died and dozens were missing, while the captain and crew were detained as rescue teams continued overnight. Regional Defense Push: Turkey will host the first committee meeting under the Makkah Joint Defence Agreement in Istanbul, bringing together Turkish, Saudi and Pakistani foreign and defense officials to set up coordination and defense-industry cooperation. Iran Pressure, Financial Fallout: The US is escalating “economic isolation” of Iran with new sanctions actions targeting banks and Iran-linked financial channels, while military strikes near the Strait of Hormuz signal rising risk. SCO Summit Watch: Putin, Xi and Modi are set for the Shanghai Cooperation Organisation summit in Bishkek, with Erdogan expected to attend and bilateral talks likely to shape trade and security alignments.

Maritime Disaster in Northern Cyprus: A catamaran ferry carrying 267 people from Kyrenia (Girne) to Turkey’s Taşucu sank off the coast near Diana Beach, with at least seven dead and 23 missing as 237 survivors were rescued; Northern Cyprus PM Ünal Üstel said the vessel began taking in water about 15 minutes after departure, while rescue teams and Turkish naval assets continue searching, and officials say the ferry’s black box must be recovered to determine the cause. Regional Security & Defence: Turkey, Saudi Arabia and Pakistan will hold their first committee meeting in Istanbul on Monday under the Mecca Joint Defence Agreement, with foreign/defence ministers and chiefs of staff expected to discuss deterrence, interoperability and defence-industry cooperation. Trade & Growth Watch: TurkStat data shows Türkiye’s July exports hit a record $25.62bn (+2.9% y/y), with Iraq buying $1.113bn of Turkish goods; imports rose to $32.97bn and the trade deficit widened. Defence Industry Update: Roketsan says it has successfully tested the ground-launched ÇAKIR cruise missile striking both land and maritime targets, expanding its multi-domain precision-strike role.

Black Sea Shipping Tensions: Turkey summoned Ukraine’s ambassador after drone strikes hit two Turkish-operated cargo ships (Leader Bordo Mavi and Lider Kocatepe), injuring five crew and damaging vessels; Ankara warned that life, property and freedom of navigation must be protected. Regional Security Talks: An Iraqi pro-Iran militia (Kataib Sayyid al-Shuhada) set 10 conditions for disarmament, led by demands including a complete US and Turkish withdrawal from Iraq. SCO Summit in Bishkek: Leaders from 17 countries and six international organisations will attend the Sept. 1 Shanghai Cooperation Organisation summit, with Erdogan among the expected participants. Turkey’s Diplomatic Push: Turkey’s Halkbank raised $1.1bn after a US case ended, underscoring continued financial momentum amid sanctions pressure in the region. Energy & Industry Watch: Turkmenistan approved steps to expand power generation capacity, including cooperation with foreign firms; Turkey’s Çalık Enerji is linked to a new combined-cycle plant. Tourism Disruption: Nepal reported 261 foreign tourists rescued after the Bhote Koshi flood, with 320 still uncontacted.

Black Sea Shipping Risk: Turkey summoned Ukraine’s ambassador in Ankara after drone attacks damaged two Turkish-operated vessels near Tuapse, raising fresh concerns for civilian shipping safety in the region. Diplomatic Push: Ankara also warned that lives, property, navigation and the marine environment must be protected, while no responsibility was publicly confirmed. Tourism Cost Pressure: Bloomberg reports Turkey’s “cheap holiday” edge is fading as hotel, dining and leisure prices rise with currency policy, pushing some European visitors to look elsewhere. SCO Summit in Bishkek: Leaders of 17 countries plus UN chief António Guterres are set to attend the SCO summit on Sept. 1, with Erdoğan among the expected participants. Halkbank Funding Boost: Halkbank says it raised $1.1bn after a US criminal case ended, improving access to international lenders. Energy Supply Watch: Reports say the US overtook Russia as Turkey’s top crude supplier in June, reflecting shifting energy routes. Legal/Politics: A Turkish court ordered the seizure and ban on sales of Ekrem İmamoğlu’s book “Millet Şahidimdir.”

Strait of Hormuz Talks: Iran says it has agreed with Oman on a temporary corridor through the Strait of Hormuz for ships, but full reopening depends on the US meeting Iran’s conditions, tying maritime access to regional ceasefires. Regional Security & Trade: Pakistan and Kuwait signed a defence cooperation protocol in Islamabad, formalizing training, intelligence sharing, logistics and defence tech links as Gulf tensions ripple from the US-Iran standoff. Turkey-Greece Tensions: Turkey hit back at Greece’s new Aegean industry and supply-chain spatial framework, saying it has “no legal consequences” and reiterating Ankara’s sovereignty claims over Aegean “geographical formations.” Turkey’s Economy Watch: Reports say Türkiye’s economic confidence crossed key thresholds in August, while analysts warn that political pressure on interest rates can worsen inflation and currency outcomes. Business & Industry: Syria’s Damascus fair is drawing foreign firms testing reconstruction opportunities as card payments return after more than 15 years, while Turkey’s manufacturing push includes new financing packages for producers. Health & Consumer Risk: Turkish clinics offering cheaper cosmetic procedures face backlash after patients abroad report severe complications and long recoveries. Transport Incident: A bus crash in Istanbul’s Zeytinburnu left 2 dead and 16 injured.

Economic Confidence: Türkiye’s economic confidence index climbed above 100 in August, reaching 100.6 (+0.8% m/m) as consumer and manufacturing optimism improved, while services, retail and construction stayed mixed. Manufacturing Finance: The government unveiled a 250 billion lira employment-linked financing package for manufacturers, with grace periods up to six months and maturities up to 36 months, and interest support for firms that keep employment levels. Energy Push: Solar and domestic power hit record monthly highs in July, with solar generation rising to 5.37 billion kWh and renewables supplying 58.2% of total electricity. Trade with Syria: Turkey is stepping up commercial ties with Syria, with trade up 42% to $3.75 billion and a focus on Aleppo’s reconstruction through production, investment and export routes. Regional Shipping Risk: Turkish shipowners warn Black Sea attacks could force some operators into bankruptcy as insurance and operating costs rise and vessels face longer disruptions. Tech Industry Scale-Up: TurkStat data shows Türkiye’s high-tech manufacturing production value topped 1 trillion lira in 2025, alongside a jump in the number of high-tech firms and workers. Diplomacy & Business: Turkey’s ambassador to Moldova received a Diplomatic Merit Medal as bilateral trade topped €478 million in the first five months of 2026.

Iran Pressure & Hormuz Risks: Regional powers are looking for an off-ramp as another tanker attack is reported in the Strait of Hormuz, while Iran’s president urged Muslim states not to let their soil be used for attacks and Tehran dismissed the latest US sanctions push. Sanctions & Trade Fallout: A fresh AP report says Iran is scrambling to sustain trade as Washington threatens secondary sanctions on countries that keep financial ties, with Turkey, Pakistan and Iraq seen as key but cautious partners. Turkey’s Finance Watch: Halkbank moved quickly to raise an extra $1.1bn after the US dismissed its long-running Iran sanctions-busting case, signaling renewed appetite for credit and trade instruments. EU Carbon Rules for Industry: Hyundai Steel briefed Turkish clients on the EU’s CBAM, focusing on how tightening carbon-border rules will hit auto parts and other supply chains. UN Diplomacy on Syria: Turkey’s UN envoy condemned Israel’s strikes on Syria but welcomed the US decision to remove Damascus from its terrorism list, saying it could support Syria’s economic recovery. Local Economy & Services: Turkey’s Halkbank story aside, the week also included municipal service planning abroad, while Turkey’s own policy headlines featured investigations and market moves rather than consumer price relief.

Turkey–Syria: Türkiye’s vice president Cevdet Yılmaz welcomed the SDF/YPG dissolution, saying Ankara wants a stable, unified Syria that protects territorial integrity and supports an inclusive governance model under a single state and army. Regional Security: The move comes as Ankara and Damascus align more closely, while Israel–Turkey tensions continue to spill into Syria’s battlefield geography. Anti-Corruption/Investigations: Ghana’s Office of the Special Prosecutor said its Aksa Enerji bribery probe remains active, naming former Power Minister Kwabena Donkor and four others as key persons of interest tied to the case’s Ghanaian dimension. Sanctions & Trade: Iran is scrambling to sustain trade as the US threatens secondary sanctions on countries that keep financial ties with Tehran, with Turkey, Pakistan and Iraq highlighted as key balancing players. Energy/Power Links: Armenia is considering importing electricity from Azerbaijan and is also discussing supply options with Georgia, Iran and Türkiye, alongside an EU-backed converter station project. Business & Labor: Turkish opposition and unions condemned the pretrial detention of mine union leaders over social media posts, arguing the move targets protests about unpaid wages. Aviation/Costs: DHL, El Al and Turkish Airlines face potential penalties in the Netherlands over nighttime noise violations at Schiphol.

Immigration & Visa Policy: The US has paused processing immigrant visas worldwide, saying it needs consular training; the hold is expected to last until mid-September, with canceled interviews rescheduled for later months. Regional Security & Defence: The Türkiye–Pakistan–Saudi “Mecca pact” is being framed as a potential new Sunni security architecture that could reshape Middle East power balances, with analysts also asking how China views the shift. Turkey’s Defence Industry Push: Nigeria reiterated its drive for self-reliant defence production and deeper industrial ties with Türkiye at the 7th Nigeria–Türkiye Defence Industry forum, emphasizing technology transfer and local manufacturing. Cyber & Tech: The US disrupted a Chinese hacking operation targeting sensitive networks tied to the Justice Department, NASA and the Federal Reserve; China rejected the claims. Sanctions & Energy Pressure: Washington’s “Economic D-Day” sanctions push on Iran is being linked to tighter pressure on oil flows and regional trade routes. Business & Markets: Turkey’s wheat supply diversification is highlighted amid Black Sea shipping risks, while UK auto production fell 11.6% in July as exports weakened. Digital Economy: Meta agreed to pay up to $18bn in US lawsuits over alleged harms from teen social media use, with proposed usage limits.

Syria Reset: Turkey’s AK Party welcomed the dissolution of the Kurdish-led Syrian Democratic Forces, saying it’s a key step toward Syrian unity and closer Ankara-Damascus alignment. EU Trade: Eurostat data shows Turkey as the EU’s fifth-largest goods trading partner in Q2 2026, with two-way trade of €52.8bn, though growth cooled year-on-year. Defense Industry Push: Nigeria and Türkiye used their 7th defence forum in Abuja to stress joint production, technology transfer and local manufacturing rather than a pure buyer-seller model. Lobbying in Washington: Turkey’s Defence Ministry hired Trump-linked Ballard Partners for a $2.4m, yearlong lobbying contract in the US. Syria Business Ties: Turkey’s trade minister visited Damascus and backed a $10bn bilateral trade target, highlighting transport and border-crossing facilitation for Turkish firms. Aviation/Compliance: Netherlands fined DHL, El Al and Turkish Airlines over night-noise violations at Schiphol. Cyber & Security: US disrupted a Chinese hacking operation targeting major government and critical institutions. Retail Expansion: LC Waikiki quietly started production in northern Syria, aiming to scale the workforce and ship to EU and UAE.

Iran Sanctions Push: The US launched “Operation Economic Outcast,” expanding secondary sanctions tied to Iran’s oil, shipping, gold, crypto, aviation and tech, warning trading partners they face loss of access to the US financial system. China Pushback: Beijing called the move illegal and vowed to protect its economic interests, urging a US-Iran ceasefire. Turkey in the Crosshairs: Washington’s warnings explicitly include major Iran partners such as Turkey, alongside China, UAE, Iraq, India and Pakistan. Syria Delisting Boost: Syria welcomed the US removal from the state sponsors of terrorism list, saying it can unlock investment and banking links as reconstruction hopes rise. Qatar–Türkiye Trade Talks: Qatar and Türkiye met in Ankara to expand trade and investment, with a stated $5bn bilateral target. Bangladesh Eyes Makkah Pact: Dhaka is considering joining the Saudi–Türkiye–Pakistan Makkah defense agreement, a move that could reshape its foreign policy balancing. Security Tensions: Turkey–Israel fallout continues after an Israeli strike near Syria’s Abu Duhur airbase, with Ankara denying Turkish deployment.

ECtHR Ruling on Osman Kavala: The European Court of Human Rights ordered Turkey to release jailed philanthropist Osman Kavala immediately, saying his conviction should be treated as “null and void” and calling the case a systemic flaw in Turkey’s judiciary. Turkey–Brazil Defense Push: Erdoğan and Brazil’s Lula agreed to set up a vice-presidential strategic council to deepen defense ties and investment, with a planned delegation to discuss partnerships after both parliaments ratified a defense industry cooperation deal. OIC Trade Momentum: Turkey’s exports to OIC countries hit $41.5bn in Jan–July 2026, up $345.7m year-on-year, as Ankara targets a higher OIC share in total exports by 2028. Vestel Bond Restructuring: Vestel launched a consent solicitation for its $500m eurobond as it explores restructuring options with holders, with the next coupon due Nov. 13. Turkey–Qatar Economic Talks: Qatar and Türkiye held talks in Ankara aimed at boosting trade and investment ties, including supply-chain resilience and private-sector opportunities, targeting $5bn in bilateral trade. Iran Sanctions Shockwaves: The US unveiled “Operation Economic Outcast” to squeeze Iran’s revenue streams, while China warned it will retaliate if hit by the new sanctions—raising risks for regional trade corridors.