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24x7Report > Blog > Finance > The Time Is Now For Kazakhstan to Achieve Energy Independence From Russia
Finance

The Time Is Now For Kazakhstan to Achieve Energy Independence From Russia

Last updated: 2025/04/14 at 7:08 PM
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Hobbled Economic Prospects in Central Asia
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Since Europe moved to close its market to Russian gas within the wake of the 2022 invasion of Ukraine, the Kremlin has actively sought new export markets. 

However in 2024, Gazprom – as soon as the world’s largest vitality firm – reported losses of 1.076 trillion rubles (round $12.89 billion), its first web loss in almost 24 years, coming after a 2023 revenue of 700 billion rubles ($7.51 billion). The scenario for the Kremlin worsened when China declined to increase supplies below the Energy of Siberia 2 Mission, which was meant to offset the lack of 50 billion cubic meters of fuel in Europe.

Nonetheless seeking new markets, final 12 months Russian President Vladimir Putin reached an agreement with Uzbek President Shavkat Mirziyoyev for the provision of Russian fuel to Uzbekistan, generally known as the “reverse scheme.” The export of fuel from Russia to Uzbekistan reached 5.6 billion cubic meters in 2024, with goals to extend the stream as much as as much as 11 billion cubic meters. 

Uzbekistan, which has its personal fuel business, makes use of Russian fuel to handle its rising home calls for, whereas permitting Tashkent to proceed exporting fuel to China. Uzbekistan is cashing in on laborious forex (roughly $160 per thousand cubic meters) for exports to China whereas it pays a a lot lower cost for imported Russian fuel.

Because the fuel export disaster continues to be acute for Russia, the Kremlin is also lobbying to supply Russian gas to northern Kazakhstan, together with the capital of Kazakhstan – Astana. Regardless of western Kazakhstan’s huge fuel and oil deposits, the northern areas of the nation should not gasified. Gasifying these areas, the place over 2 million ethnic Russians reside, presents important geopolitical dangers to Kazakhstan just like these in japanese Ukraine.

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It’s no secret that Russia has repeatedly used fuel provides as a software of political strain. Presently, three-quarters of exported Kazakh oil transits by means of the Russian port of Novorossiysk. The pipelines important to Kazakhstan’s exports by means of Russia are sometimes shut down, on varied technical pretexts. These shutdowns usually coincide with issues in bilateral relations between Kazakhstan and Russia in different areas, suggesting a political motivation.

The prospect of importing Russian fuel to northern Kazakhstan ought to immediate consideration of how the nation makes use of its personal plentiful sources. Within the nation’s oil and gas-rich west, a lot of the fuel produced is reinjected again into the oil reservoirs at fields like Karachaganak, Tengiz, and Kashagan. As oil manufacturing is projected to lower in 5 to seven years, it will likely be essential for the Kazakh authorities to make plans for the longer term utilization of this fuel. 

Rising fuel exports would require pipelines. Thus, the Kazakhstan authorities ought to negotiate with Russia to ease Moscow’s stern stance on constructing an oil and fuel pipeline from Kazakhstan throughout the Caspian Sea to Azerbaijan, Turkiye, after which Europe. Russia and Iran have lengthy blocked progress on such routes to develop export of vitality from Central Asia to world markets, usually utilizing as a pretext discussions on the delimitation of the Caspian Sea. 

Kazakhstan can at present provide oil and fuel to German refineries by way of the Druzhba pipeline, however that also depends on Russia’s permission. Making certain vitality safety by way of diversification of export routes is essential for Kazakhstan, and laying a pipeline throughout the mattress of the Caspian Sea is important for Kazakh vitality stability and political independence.

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The prices of laying a fuel pipeline throughout the Caspian Sea may very well be shared with Turkmenistan, which additionally stands to learn. And the EU could also be enticed to assist with financing too. Turkmenistan and Kazakhstan have, collectively, the fourth-largest fuel reserves globally, and may change Russian or pricey American liquefied pure fuel in Europe, assembly Europe’s wants for many years to return.

On the current EU-Central Asia summit, held on April 3-4 in Samarkand, European Fee President Ursula von der Leyen introduced plans to invest over 12 billion euros in regional infrastructure development. Concurrently, China is making important investments in increasing logistics on the Kazakh coast of the Caspian Sea as a part of its Belt and Street Initiative (BRI).

Present geopolitical circumstances, as tumultuous as they’re, are nonetheless conducive for Kazakhstan to attain vitality independence from Russia. 

Europe would assist such a undertaking given more and more unpredictable commerce relations between Europe and the US. China’s improvement of oil and fuel deposits in western Kazakhstan would favor rising exports too, however most essential is Russia’s decreased geopolitical affect within the area. In 2023, Russia misplaced its financial hegemony to China for the primary time for the reason that Russian Empire colonized Central Asia. In line with 2024 knowledge, commerce volumes between Kazakhstan and China have exceeded $40 billion, in comparison with $27 billion between Kazakhstan and Russia. An identical scenario will be noticed in Uzbekistan as properly.

At this time Kazakhstan has an important alternative to diversify its oil and fuel pipelines given Russia’s geopolitical and financial weaknesses. To keep up financial and political independence, the Kazakhstan authorities should act shortly by capitalizing on Russia’s personal want to hunt new markets for it fuel. The Russian willingness to export fuel to northern Kazakhstan ought to have a worth – and that worth must be Moscow’s acquiescence for Kazakhstan to promote its personal fuel to Europe, bypassing Russia. 

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TAGGED: Achieve, energy, Independence, Kazakhstan, Russia, Time

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