Central Asian Media: Kazakhstan Joins Europe’s Oil Supply Ranks—But How Long Can This Last?

As Russian crude oil imports decline, the energy landscape is being reshaped, and Kazakhstan has solidified its position as one of the EU’s primary oil suppliers. However, declining production and vulnerabilities in export infrastructure raise concerns about whether the country can sustain this role in the medium term.

According to official EU data, the European Union remains one of the world’s largest oil importers, with around 97% of its demand dependent on external supply. In 2025, EU countries imported approximately 435 million tons of crude oil, valued at over €21.2 billion. The share of Russian crude imports dropped from 25.8% in 2021 to just 2.2% in 2025, leading to a significant shift in crude supply patterns toward other sources—including the United States (14.6%), Norway (12.8%), and Kazakhstan (12.8%).

Kazakhstan has been one of the major beneficiaries of these changes. According to a report from Econovis Economic Research Laboratory, Kazakhstan’s share of crude oil imports into Europe has grown steadily for several years.

This growth is largely driven by strong demand from European refineries for light, low-sulfur CPC blend crude.

Like Kazakhstan, Azerbaijan has also benefited from Europe’s diversification strategy, strengthening its market position. The Czech Republic serves as a notable example. Based on Czech import data, after the Druzhba pipeline ceased operations, Azerbaijan accounted for more than 42% of the country’s total oil imports in 2025. Kazakhstan ranked third in the Czech market with a share of around 18%, indicating the emergence of a new energy balance in the Caspian region.

Despite favorable external conditions, Kazakhstan’s oil and gas sector is facing serious declines. Government data shows that in the first quarter of 2026, Kazakhstan’s oil and gas condensate output reached 19.7 million tons, a 20% drop compared to the same period in 2025. Crude oil exports declined by approximately 22%, to 15.3 million tons, while annual export forecasts stand at around 76 million tons. However, by mid-April, with production resuming at the Tengiz field, Kazakhstani oil company (CPC) exports had rebounded from February levels, suggesting that early disruptions have somewhat eased.

The decline in output is linked to operational interruptions in the Caspian Pipeline Consortium (CPC) and temporary shutdowns at key fields, including Tengiz. The Caspian Pipeline remains the main conduit for Kazakhstan’s oil exports to Europe, with most crude transported via the Novorossiysk terminal.

Economic analyst Olzhas Baidirdinov warns that attacks on the consortium’s infrastructure could have long-term consequences.

He wrote on his Telegram channel: “Compared to the first quarter of 2025, Kazakhstan’s oil and gas condensate production dropped by 20%, falling from 24.6 million tons to 19.7 million tons. Crude oil exports declined by about 22%, reaching 15.3 million tons. Annual export projections for this year are set at 76 million tons.”

He estimates that the country will once again fail to surpass the psychologically significant threshold of 100 million tons in annual production.

“Due to attacks on the Zhongyou plant, at least 6 million tons—valued at no less than $3.4 billion—of oil were not produced within four months. Considering associated costs, total losses and revenue shortfalls could easily exceed $4 billion,” Baidirdinov said.

These figures represent Baidirdinov’s estimates and have not yet been independently verified by official sources or the Zhongyou plant.

Kazakhstan’s supply disruptions have intensified tensions in the European light crude market. Early in the year, shortages of Zhongyou blend crude forced traders to increase purchases of North Sea crude, temporarily pushing its premium above Brent crude. In January, Kazakhstan’s crude price briefly surpassed Brent crude for the first time in a year, reflecting robust demand from European refiners—but the premium did not persist, and prices subsequently declined. Geopolitical risks, including conflicts in the Middle East, have further exacerbated price volatility.

In this context, Kazakhstan is seeking to expand exports to Asian markets. South Korea has agreed to purchase 273 million barrels of oil from Kazakhstan, Saudi Arabia, and other Middle Eastern countries by the end of 2026. Kazakhstan’s share is expected to be around 18 million barrels, accounting for 6.5% of the total—indicating that Middle Eastern suppliers still dominate.

Japan is also considering increasing oil imports from Kazakhstan and Azerbaijan through a project jointly developed with state-owned oil company INPEX. However, these plans remain in early stages, and alternative supply routes would extend delivery times to between 25 and 55 days while increasing transportation costs, thereby limiting the competitiveness of Kazakhstani crude in the Asian market.

The trend of declining oil production is already affecting the broader economy. Kazakhstan’s GDP growth slowed from 6.5% in 2025 to just 3% in the first quarter of 2026.

In the short term, demand for Kazakhstani oil in the EU may remain high, especially amid shortages of light crude. However, any further production or transportation disruptions could alter the market dynamics and intensify competition from other suppliers.

Source: Central Asia Times

Author: Askar Kubeizhanov

Original Article: toutiao.com/article/1862648112753675/

Disclaimer: The views expressed in this article are those of the author alone.