Kazakhstan increased its oil exports that do not pass through Russia in the first quarter of 2023 as it seeks to reduce its dependence on its neighboring country, according to data from industry sources and Refinitiv.
Although Kazakh oil exports via the Caspian Sea and the Caucasus are relatively small, they have risen sharply since Russia began its invasion of Ukraine in February last year.
Kazakhstan, which has the longest land border with Russia of all the former Soviet states, has moved on a delicate line to reduce its dependence on Moscow without snubbing its neighbor.
Kazakh President Kassym-Khomart Tokayev, who has refused to recognize Russia’s annexation of several regions in eastern Ukraine, has sought to limit Kazakhstan’s dependence on its neighbor, with its huge network of pipelines and ports.
Data consulted by Reuters show that oil supplies from the Caspian Sea port of Aktau to Baku in Azerbaijan, Russia’s main bypass route, amounted to 163,436 tons between January and March, up from 28,875 tons in the same period in 2022.
Kazakhstan’s state transport company Kazmortransflot told Reuters that 104,000 tons of oil was also shipped to the Baku-Tbilisi-Ceyhan pipeline in the January-March period.
Kazakhstan also supplies more than 80,000 tons of oil per month to China. Last year, Kazakh oil exports via routes other than Russia reached 1.8 million tons (36,000 barrels per day), 638,000 tons more than in 2021.
Kazakh oil is not subject to Western sanctions, unlike Russian crude, although sanctions have created problems for some Kazakh products.
“Russian ports are still toxic for European buyers, so tankers are playing it safe and looking for routes that are not related to (Russian pipeline monopoly) Transneft,” said a Western source who deals in Kazakh oil.
The main and most profitable route for Kazakhstan’s oil exports remains the Caspian Pipeline Consortium (CPC), which supplies the world market through a Russian terminal on the Black Sea.
Supplies through the CPC decreased by 1% last year to 51.99 million tons, but still accounted for more than 80% of Kazakhstan’s total oil exports.