Export Constraints Curb Kazakhstan’s Ability to Offset the Global Oil Shortage

Kazakhstan, which has major oil reserves, is not in a position to help offset a looming energy crisis by expanding production, industry analysts say. With the Strait of Hormuz blocked, Russia sanctioned and Saudi Arabia’s East-West pipeline knocked out of action by Iranian drones, experts are predicting a spike in energy prices. The Saudi pipeline alone was responsible for supplying up to 4 percent, or 4 million tons per day, of global oil needs, mostly to Asian markets. Kazakhstan cannot be counted on to make up for some of the shortfall. The Kazakh oil industry is facing a two-pronged challenge: production is falling, and existing export options face a constant threat of disruption. According to a Kazakh government statement, oil production fell 8.4 percent short of its original target for the first eight months of 2026, standing at 61.7 million tons. Scheduled maintenance that started in September at the Karachaganak oil and gas field, one of the country’s largest, is one factor that will continue to hinder production capacity, the Kazinform news agency cited a Kazakh industry expert, Nurlan Zhumagulov, as saying. The Karachaganak disruption and other factors have prompted the government to cut its annual production forecast to 96 million tons from 100 million tons. Production hit 99.6 million tons in 2025.Beyond the production struggles, Kazakhstan is facing growing difficulties getting its oil to market. Roughly 80 percent of exports go through the Caspian Pipeline Consortium (CPC) route to the Russian port of Novorossiysk. Terminal facilities in Novorossiysk, and the pipeline itself, have been subjected to repeated Ukrainian drone attacks in recent months.The most recent drone-caused disruption occurred September 8 with a strike against a CPC oil loading facility.Kazakh officials face a dearth of alternatives to the CPC. Officials have sought to increase export volumes via a trans-Caspian route to Azerbaijan, which can ship the crude westward via the Baku-Tbilisi-Ceyhan pipeline. But logistical factors limit export capacity: the crude must be shipped across the Caspian on tankers; and then BTC’s ability to handle Kazakh crude is constrained. In any case, BTC cannot do much to alleviate Kazakhstan’s dependency on CPC. In 2025, CPC carried roughly 65 million tons of Kazakh crude. By comparison, Azerbaijani officials say the BTC route has the annual capacity to carry 2.2 million tons for Kazakh oil. The two countries are also exploring the viability of shipping up to 5 million additional tons of Kazakh oil to European markets via the Baku-Supsa pipeline.The Kazakh government’s desire to break the country’s long-term dependence on CPC is encouraging renewed discussion about building a long-contemplated trans-Caspian pipeline. Building out such a route, however, will take lots of time, political will and money. Kazakhstan does not have the resources to do it on its own, industry analyst Joseph Shumunov wrote in a commentary published by the Astana Times.“The European Union imported 52.4 million tons of Kazakh crude just in 2024, making Kazakhstan its third-largest external supplier. If Europe wants westward diversification, it must help make projects bankable through financing and long-term commitments,” Shumunov wrote.By EurasianetMore Top Reads From Oilprice.com$100 Oil Puts Central Banks Back on Inflation AlertDrone Strikes Cripple Half of Russia's Top Diesel RefineriesChina’s Yuan Crude Oil Futures Jump to Record High