Key facts
- Kazakhstan is considering alternative oil export routes through Azerbaijan, Georgia, and Turkey.
- Ukrainian drone attacks on Russian energy infrastructure are disrupting fuel supplies to Central Asia.
- Russia has limited fuel exports due to domestic shortages caused by refinery attacks.
- Kyrgyzstan and Tajikistan are seeking new fuel suppliers beyond Russia.
- Uzbekistan is diversifying suppliers and increasing domestic jet fuel production.
- Russia is in talks with Kazakhstan to refine its oil at Kazakh refineries.
Kazakhstan is evaluating new export routes for its crude oil, including pipelines via Azerbaijan, Georgia, and Turkey, as Ukrainian drone attacks on Russia's Novorossiysk Black Sea port continue to disrupt shipments. The Kazakh Ministry of Energy confirmed that transportation through the Baku-Tbilisi-Ceyhan system, shipments across the Caspian Sea via Azerbaijan, and the Baku-Supsa route are under consideration.
These disruptions, which have led to multiple suspensions of flows through the Caspian Pipeline Consortium (CPC) in recent weeks, highlight Kazakhstan's vulnerability due to its reliance on Russian export terminals. The CPC pipeline, operated by a consortium where Russia is the largest shareholder with a 24% stake, transports crude from major Kazakh oil fields like Tengiz, Kashagan, and Karachaganak, in which international firms such as Chevron, ExxonMobil, Shell, and Eni hold stakes. Affiliates of Chevron and ExxonMobil are also minority shareholders in CPC.
The repeated targeting of Russian energy infrastructure by Ukrainian forces has led to significant supply risks, with a recent week-long shutdown briefly removing over 1 million barrels per day of Kazakh production from the market. In addition to exploring western routes, Kazakhstan is also working on increasing its eastward pipeline supply to China.
Central Asian energy markets are experiencing a rapid shake-up due to Ukraine's drone campaign against Russian energy infrastructure. Russia's limitations on fuel exports, including gasoline and jet fuel, are prompting countries like Kyrgyzstan and Tajikistan, which previously depended on Russia for about 90% of their fuel, to scramble for alternate supplies. Kyrgyzstan is striking small supply deals with Uzbekistan and Kazakhstan, along with shipments from Belarus and China, and seeking additional fuel from Turkey and the EU. Kyrgyzstan is also accelerating a project to build a refinery capable of producing about 450,000 tons of petroleum products per year.
Tajikistan tripled fuel imports from Turkmenistan, Uzbekistan, and Kazakhstan in July, while Russian gasoline supplies fell by roughly half. Tajikistan is negotiating with Kazakhstan and China for additional supplies, with current reserves estimated to last about 60 days. Uzbekistan, less dependent on Russia, is diversifying suppliers to cover the remaining 40% of its needs, reaching deals with Georgia, Iraq, and other countries. Uzbekistan is also facing a spike in demand for jet fuel due to increased flights from Russia, and has sufficient reserves for two to three months.
Kazakhstan and Turkmenistan are largely self-sufficient and are benefiting from additional export revenue. Russia is reportedly in talks with Kazakhstan on a possible deal to refine Russian oil at Kazakh refineries, which would shield Russian products from Ukrainian strikes but potentially crimp Kremlin earnings.