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FOCUS: Russia-Ukraine War

Alexandroupoli, How The Ukraine War Made This Sleepy Greek Port A Geopolitical Hub

Once neglected, this small port in Thrace, northeastern Greece, has become a strategic hub for transporting men and arms to the shores of the Black Sea. Propelled by ambitious infrastructure and gas projects, the region dreams of becoming an alternative to the Bosphorus strait.

Alexandroupoli, How The Ukraine War Made This Sleepy Greek Port A Geopolitical Hub

The U.S. military processing military equipment in the port of Alexandroupoli.

Basile Dekonink

ALEXANDROUPOLI — Looks like there's a traffic jam in the port of Alexandroupoli.

Lined up in tight rows on the quay reserved for military activities, hundreds of vehicles — mostly light armored vehicles — are piled up under the sun. Moored at the pier, the "USNS Brittin," an impressive 290-meter roll-off cargo ship flying the flag of the U.S. Navy, is about to set sail. But what is all this gear doing in this remote corner of the sea in Thrace, in the far northeast of Greece?

Of all the geopolitical upheavals caused by the Russian offensive of Feb. 24 2022, Alexandroupoli is perhaps the most surprising. Once isolated and neglected, this modest port in the Eastern Mediterranean, mainly known for its maritime connection to the nearby island of Samothrace, is being revived.

Diplomats of all kinds are flocking there, investors are pouring in, and above all, military ships are arriving at increasingly regular intervals. The capital of the province of Evros has become, in the midst of the war in Ukraine, a hub for transporting arms and men to the shores of the Black Sea.

“If you look north from Alexandroupoli, along the Evros River, you can see a corridor. A corridor for trade, for the transport of goods and people to the heart of the Balkans and, a little further, to Ukraine," explains the port's CEO, Konstantinos Chatzikonstantinou, from his office right on the docks. According to him, the sudden interest in this small town of 70,000 inhabitants is explained by "geography, geography, and… geography.”

A quick look at a map confirms it. In 2023, in a Europe fractured by a war on its eastern flank, Alexandroupoli offers, via the sea, strategic access to the heart of the Old Continent. Just a stone's throw from nearby Bulgaria, shipments can reach Poland in five days by train or road, says Konstantinos Chatzikonstantinou.

Ideal for anyone — the United States, for example — who wants to transport military equipment from the Atlantic or Pacific oceans to the "rear" of the Ukrainian conflict, in the port of Constanța, NATO outposts or one of the six U.S. bases in Romania.

Pyatt’s thing

The route thus offers an operational alternative to the neighboring straits of the Dardanelles and the Bosphorus, which are anyway forbidden to military vessels since Turkey invoked the Montreux Convention in late February 2022 — which gives it the right to close these passages in times of war. All while staying within the European Union and avoiding many of the logistical problems posed by transporting equipment from Western Europe: French Leclerc tanks that cannot cross Germany by road due to their weight can easily attest to that.

For the past few years, it is at the rhythm of these somewhat special deliveries that the fragile economic lung of the Thrace region, one of the poorest in Greece, lives. Or rather, relives: under the Roman Empire, the city of Traianoupoli, at the mouth of the Evros River, was already a crossing point on the Via Egnatia, a commercial and military route. In the mid-eighteenth century, the Ottomans later founded Dedeagach there, which would become the capital of the "sandjak," the administrative division of the region — again because of its privileged position.

The "French Station," which still stands, was indeed built by the Parisian Company of Oriental Railways… something that Patrick Maisonnave, the French ambassador to Greece, did not fail to point out during his visit on April 11 (his second in a few weeks).

This 'hub' for transport and energy has emerged.

But despite their expressions of interest, and although they are at the forefront of Greece's allies, the French are only jumping on the bandwagon. "Alexandroupoli is Pyatt's thing," says a French diplomatic source. Geoffrey Pyatt, the US Ambassador to Greece from 2016 to 2022, now Secretary of State for Energy, "has been working since the beginning to forge connections in Alexandroupoli. During his tenure, this 'hub' for transport and energy has emerged," says Steven Tagle, who was Pyatt's speechwriter and spent several months in the city between 2021 and 2022.

The U.S. interest in the port dates back to 2018, well before the war in Ukraine. The goal was to find an anchor point in the region to compete with the Chinese (Beijing owns 67% of the Piraeus through the public company Cosco) and the Russians (Greek-Russian oligarch and former member of the Duma, Ivan Savvidis, owns the port of Thessaloniki).

British and Italian flags

Although the U.S. did not take control of the port — the privatization process, for which the Bolloré group was also a candidate, was canceled at the last moment by the Greek government for strategic reasons — Washington nevertheless secured privileged access. Firstly, by spending $2.3 million in 2019 to remove the "Olga", a sunken dredging barge that had been blocking the entrance to the port for ten years (a "pre-investment," according to Steven Tagle).

Then by renewing, for the first time since 1990, the mutual cooperation and defense agreement between Athens and Washington. Alexandroupoli has since been, along with the Souda Air Base, the cornerstone of the US presence in Greece: between 2019 and the end of 2021, 117,000 tons of U.S. military equipment passed through the port, including 70 planes and 165 armored vehicles, according to the New York Times. During the summer of 2022 alone, 2,400 "pieces" — the term used by the US military to refer to vehicles, weapons, and ammunition — were transported, a record for Alexandroupoli.

You establish a base and it annoys us, me and my people.

The pace is only accelerating, as American and European support for Ukraine grows. On March 7, the USNS Brittin and the Liberty Pride, a U.S. vehicle carrier, unloaded 1,500 "pieces," including tanks and helicopters. In recent months, despite rows of stacked containers to hide transfers from prying eyes, British, Portuguese or Italian flags have also been seen. In December, a train carrying tanks and armored vehicles with NATO markings even derailed in the middle of the Alexandroupoli station.

A trust crisis

A military tank is being unloaded in the port.

U.S Army

These large maneuvers have not escaped the attention of Turkey, the neighboring country whose border is only a few tens of kilometers away. "What's the problem with Alexandroupoli? You establish a base and it annoys us, me and my people," Recep Tayyip Erdogan said in November 2021, confronting Joe Biden on the sidelines of the G20 in Rome.

Washington doesn't seem to mind, as it increases its signs of friendship towards Greece while its faith in Ankara dwindles. "There is a crisis of confidence between Turkey and the United States, and the latter is looking for new partners in the region, whether it be Greece, Cyprus or Romania," says Dimitrios Triantaphyllou, director of the Center for European and International Studies at Kadir Has University in Istanbul. “Greece, on the other hand, is seeking to rethink its security in a changing world and is capitalizing on this opportunity.”

Still, everything is being done to increase the logistical possibilities of Alexandroupoli. The EU recently included it in the trans-European transport network, a community program aimed at connecting the continent's nerve centers: a first project worth €35 million has been launched to deepen the port, purchase cranes, build a bypass and new warehouses. And finally, the railway line linking the city to Ormenio, on the Bulgarian border, will be doubled and electrified for just over €1 billion.

Energy hub

Alexandroupoli is also preparing to become an energy hub. Located 18 kilometers off the port, a floating liquefied natural gas (LNG) import terminal is set to begin operation at the very end of the year. With the capacity to regasify up to 5 billion cubic meters per year — considered medium size in Europe —, it doubles national capacities and introduces Greece into the circle of new gas exporters, like Croatia. Yet another consequence of the war in Ukraine.

"The idea for the Greeks is twofold: to become a hub, a gateway to distribute less carbon-intensive energy to countries that do not have access to it (Bulgaria, Romania) and are deprived of Russian gas. It is also a geopolitical act as they will contract with suppliers such as Qatar, Egypt, Israel, or the United States," says Thierry Bros, energy specialist at Sciences Po Paris.

“We already have long-term commitments with about thirty companies. I cannot reveal names, but you can imagine big players in Greece, the Balkans, and Southeast Europe," says Sarra Floratou, head of studies and permits at Gastrade, the Greek company leading the project and sharing the capital with, among others, the Bulgarian public company Bulgartransgaz. According to her, "there is no limit, we can even send gas to Ukraine.”

The golden years

A hub for military supply and a future energy hub (a second floating terminal is also under construction): Alexandroupoli, which Greek weather forecasters placed not so long ago inside Turkish borders, is making a name for itself. "The city acts like a magnet. People are buying businesses, restaurants, villas, and real estate is soaring," says Leonidas Skerletopoulos, consultant for the Chamber of Commerce of Evros.

Some signs do not lie: last fall, a delegation from the American Real Estate Association came to visit in search of opportunities. Ikea closed its store in Xanthi, about a hundred kilometers to the west, to relocate it to Alexandroupoli. "I feel like I'm in 1995, reliving the golden years of Greek growth," says Marina Doulani, honorary consul of France and owner of the Café de Paris, from where a few French flags float in the middle of the main shopping street.

Alexandroupoli has been rediscovered.

“Alexandroupoli has been rediscovered," says Konstantinos Chatzikonstantinou, the port’s CEO, whose turnover has gone from €650,000 in 2019 to €2 million last year. With the tripling of Bosphorus tariffs, the port offers its prospects "the opportunity to bypass the strait reliably, at a much lower cost."

But it will take some time before competing with the main commercial route in the region or even Thessaloniki, the nearby major port. The train that connects the two cities has not been running for two years and is far from a priority for OSE, the Greek railway company. Apart from military transfers, the port of Alexandroupoli remains extremely calm most of the time — only three local companies can afford the 900 euros it costs to transport a container to Athens. "We cannot compete with the Bosphorus, but we can take some of their clients," says Leonidas Skerletopoulos. "We are still a small, underutilized port."

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FOCUS: Russia-Ukraine War

How Russia's Wartime Manipulation Of Energy Prices Could Doom Its Economy

A complex compensation mechanism for fuel companies, currency devaluation, increased demand due to the war, logistics disruptions, and stuttering production growth have combined to trigger price rises and deepening shortages in the Russian energy market.

Photograph of Novatek's gravity-based structure platform for production of liquefied natural gas, floating on a body of water.

Russia, Murmansk Region - July 21, 2023: A view of Novatek's gravity-based structure platform for production of liquefied natural gas.

Ekaterina Mereminskaya

In Russia, reports of gasoline and diesel shortages have been making headlines in the country for several months, raising concerns about energy supply. The situation escalated in September when a major diesel shortage hit annexed Crimea. Even before that, farmers in the southern regions of Russia had raised concerns regarding fuel shortages for their combines.

“We’ll have to stop the harvest! It will be a total catastrophe!” agriculture minister Dmitry Patrushev had warned at the time. “We should temporarily halt the export of petroleum products now until we have stabilized the situation on the domestic market.”

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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As the crisis deepens, experts are highlighting the unintended consequences of government intervention in fuel pricing and distribution.

The Russian government has long sought to control the prices of essential commodities, including gasoline and diesel. These commodities are considered "signalling products", according to Sergei Vakulenko, an oil and gas expert and fellow at the Carnegie Endowment. Entrepreneurs often interpret rising gasoline prices as a signal to adjust their pricing strategies, reasoning that if even gasoline, a staple, is becoming more expensive, they too should raise their prices.

The specter of the 2018 fuel crisis, where gasoline prices in Russia surged at twice the rate of other commodities, haunts the authorities. As a result, they implemented a mechanism to control these prices and ensure a steady supply. Known as the "fuel damper," this mechanism seeks to balance the profitability of selling fuel in both domestic and foreign markets.

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