Despite global oil prices recently climbing above $100 a barrel, Kazakhstan, the world’s largest landlocked country and a major oil exporter, faces significant logistical challenges that hinder its ability to fully capitalise on market demand. Its budget remains heavily reliant on commodity exports, yet disruptions to key transportation routes are forcing production cuts.
Kazakhstan’s Logistics Trap
Over 80% of Kazakhstan’s oil exports move through the Caspian Pipeline Consortium (CPC) system, which crosses Russian territory to a terminal near Novorossiysk. This reliance presents a “logistics trap”, as detailed by The Times Of Central Asia. Escalations in the Middle East have pushed global freight costs higher, while attacks around Russian infrastructure increase risks to this main export route.
In July, drone attacks on tankers at the CPC marine terminal near Novorossiysk repeatedly interrupted loading. Operations were halted for several days, leading Kazakhstan to sharply reduce production, including at its largest oil field, Tengiz, due to constrained export capacity and filling storage. This episode demonstrated that even high global prices cannot translate into higher revenue if oil cannot be exported, impacting tax receipts and flows to the National Fund.
Production and Export Trends
Kazakhstan has significantly increased its oil exports over the past decade. According to the Bureau of National Statistics, volumes rose from 63.6 million metric tons in 2015 to a record 76.3 million tons in 2025. Total oil and gas condensate production reached 99.6 million tons in 2025. The government had planned for around 98 million tons in 2026, but export disruptions have already forced temporary output cuts.
While physical volumes grew, export revenue has sometimes moved in different directions. Ranking.kz analysis cited by The Times Of Central Asia shows that in 2025, Kazakhstan exported 7.4% more oil than the previous year, yet its value fell by 6.8%. The average estimated value of one exported metric ton declined from $604 in 2024 to $524 in 2025.
The energy sector is a cornerstone of Kazakhstan’s government revenue, contributing 7.523 trillion tenge, or 66.5% of total taxes from the 50 largest taxpayers in 2025, as reported by Qazinform News Agency. Tengizchevroil was the largest taxpayer in 2025, contributing around 3.6 trillion tenge.
Limited Alternative Export Routes
Beyond the CPC, Kazakhstan utilises several other export routes, but these remain considerably smaller and face their own constraints. In 2025, 64.8 million tons of Kazakh oil moved through CPC, according to Talgat Makuov from the Energy Ministry. Other routes included:
- 9.2 million tons via the Atyrau-Samara pipeline.
- 1.1 million tons through the Atasu-Alashankou pipeline towards China.
- 1.26 million tons across the Caspian Sea towards the Baku-Tbilisi-Ceyhan pipeline, with a plan to increase to 1.7 million tons in 2026. This Trans-Caspian route is constrained by port and tanker capacity, weather, tariffs, and onward infrastructure.
Attempts to diversify have met with difficulties. Shipments of Kazakh oil to Germany via the northern branch of the Druzhba pipeline stopped on May 1, 2026. Planned volumes for the Schwedt refinery were redirected, with some moving to Ust-Luga and the remainder into the CPC system. However, Ust-Luga did not provide a dependable alternative due to fluctuating shipments amid attacks on Russian port infrastructure.
Kazakhstan has also increased flows towards China, with transportation through the Atasu-Alashankou pipeline rising 3% to 7.6 million tons from January to August. While these alternative routes can absorb individual cargoes and offer short-term relief, they are not yet capable of replacing the large-scale capacity of the Black Sea system, dominated by CPC.
Future Outlook
Looking ahead, energy industry analyst Abzal Narymbetov estimates Kazakhstan’s annual oil production could range between 90 million and 96 million tons after 2030, with further development of the Kashagan field identified as the main opportunity for significant production increases. IFX, citing the ministry, projects oil output at 96 million tons in 2028.
In 2022, Kazakhstan introduced KEBCO (Kazakhstan Export Blend Crude Oil) for oil exported through Russian ports. This brand aims to distinguish Kazakh crude from Russia’s Urals grade and mitigate sanctions-related risks for exporters.
