Russia’s Energy Crisis Puts Kazakhstan in a Tough Spot
The Iran War Has Turned VLCCs Into $650,000-a-Day Assets Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on… Kazakhstan is trying to keep the Kremlin at arm’s length amid Russian efforts to lean on Central Asian states for help in bolstering Moscow’s staggering war economy.
Ukraine’s ongoing drone campaign has inflicted severe damage on Russia’s energy infrastructure and its military-industrial complex, prompting Russian officials to seekemergency energy suppliesandrefining arrangementsfrom Central Asian states, whileexploring offshoring optionsfor arms production.
Kazakhstan seems to have little appetite for enabling Russia’s war in Ukraine, not wanting to create the impression of taking sides in the conflict.
At the same time, officials in Astana are cognizant that telling Russian leader Vladimir Putin ‘no’ runs the risk of some form of retaliation.
On August 26, the Moscow Times, citing Reuters,reportedthat some of Kazakhstan’s largest refineries have declined to export oil and gas products to Russia, even though the Kazakh Energy Ministry had approved shipments of up to 17,500 tons of gasoline.
Kazakh hesitation is reportedly linked to the threat of secondary sanctions for abetting the Russian war effort.
In addition, the country is experiencing record domestic demand this summer.
Astana isn’t turning its back completely on Russia, however.
On August 27, Kazakh Energy Minister Yerlan Akkenzhenovconfirmedthat one relatively small facility in the West Kazakhstan region will refine Russian crude and ship the bulk of the finished products back to Russia.
A rail shipment of about 4,100 tons of Russian crude oil arrived at the refinery earlier in August.
As it stands, the Kazakh-Russian refining arrangement will likely have little impact in easing Russia’s crude refining crunch.
Energy analysts are painting a grim picture for Russia’s energy outlook in the coming months.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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