Written by Thomas Coffey and edited by Lucia Torlai


Since the beginning of the Russo-Ukrainian war, the EU and Kazakhstan have intensified their efforts to diversify their trade partners due to fears of instability in their energy security. The EU has developed its infrastructure with Norway via the Baltic Pipe whilst also importing record levels of crude oil from the U.S.. Yet, Kazakhstan, which produces the equivalent of 2% of the world’s oil output, has only retained its 8% share of oil exports to the EU (Nakhle, 2023).

This article will explore how the EU has made significant steps in developing its trade relationship with Central Asia and Kazakhstan to reaffirm its oil reserves which have been affected by Russian hostility. The first section will explore Kazakhstan’s dependence on Russian infrastructure. The second section will then detail the efforts towards the Middle Corridor to reduce Russian influence, particularly via the involvement of the Trans-Kazakhstan railway to the Baku-Tbilisi-Kars railway across the Caspian Sea. The final section will argue that there is an opportunity for the EU and Kazakhstan to strengthen their trading partnership because of geopolitical developments, which overall depends on the efficiency of prospective infrastructure projects and how both parties can minimise Russian influence.

Kazakhstan’s dependence on Russian infrastructure

The Caspian Pipeline Consortium (CPC) is the central pipeline for Kazakh oil exports and accounts for 80% of outgoing oil from the country located on the Caspian Sea (Slobodov, 2023). It transports oil from Kazakhstan’s Tengiz Field across the Russian port city of Novosibirsk on the Black Sea, where two-thirds of the oil is then directed towards the EU market (Nakhle, 2023). Despite the pipeline being essential for Kazakh oil exports, it reflects Kazakhstan’s dependence on Russia. In addition to the requirement to transport its oil to Novosibirsk to access the EU market, such dependence is also evident since the Kremlin has the most significant stake in the CPC at 24%. This affords Russia control over Kazakhstan’s ability to export the majority of its oil (Nakhle, 2023). 

Russia’s influence over Kazakh exports was demonstrated in July 2022, when the District Court of Novosibirsk suspended the pipeline for a month under the pretence of ‘oil spills’ (Heavens, 2022). The timing of such a ruling seemed ironic because just a day earlier, President Tokayev of Kazakhstan had pledged to stabilise European energy markets (Aarup et al., 2022). Eventually, the Krasnodar Regional Court overturned this decision a few days later because of concerns from investors (Heavens, 2022). Nevertheless, such a display of control from Russia signalled its degree of authority over Kazakhstan’s oil exports and its access to the EU markets via the CPC. 

However, the CPC pipeline is not the only piece of Russian infrastructure used by Kazakhstan to export oil to European markets. Kazakhstan also utilises the Druzhba pipeline, one of the largest pipelines in the world, which can transport two million tonnes of oil a day. The pipeline begins in central Russia and connects Western Siberian oil fields to major European refineries, which Kazakhstan uses to export its crude oil to Germany (Pandey, 2023). The first shipment of crude oil was sent in March 2023 via Russia, Belarus, and Poland to reach the Russian-owned Petrochemical Combine (PCK) refinery in Schwedt, East Germany, which provides 90% of the fuel in Berlin (Nakhle, 2023). Such a trade deal benefits both countries: Germany has found an alternative for Russian oil, whereas Kazakhstan continues to develop its trade relationships with the EU. 

However, considering the location of the Druzhba pipeline, Russia can easily take advantage of its infrastructure which Germany and Kazakhstan both depend on. Firstly, Russia can stop the flow of Kazakh oil to Germany at any given time as they did with the CPC pipeline, and hence, both countries rely on the Kremlin’s sentiment towards such trade. Therefore, Kazakhstan and Germany have reason to maintain fair-minded relations towards Russia to protect its interests. Furthermore, Russia receives a transit fee via their state-owned oil company Transneft operating the pipeline (Pandey, 2023). This creates a moral hazard for the trading parties because they are relaying funds to the Kremlin and indirectly bankrolling the Russian military in the Russo-Ukrainian war. This transit fee gives Russia essential Western revenue amid sanctions and price caps.

Moreover, using the Druzhba pipeline gives further revenue to the Kremlin because of its 54% stake in the PCK refinery via Rosneft (Wilson 2022). Similar to the moral hazard regarding transit fees, Russia further profits from the use of its state-owned infrastructure in Germany which bypasses EU sanctions and price caps. In hindsight, Kazakhstan did attempt to disassociate itself from Russian crudes by rebranding its cargo as KEBCO (Kazakhstan Export Blend Crude Oil), as opposed to REBCO (Russian Export Blend Crude Oil), to avoid exposure to Western sanctions (Nakhle, 2023). Nevertheless, relying on Russian infrastructure gives an apparent moral hazard in financing the Russo-Ukrainian war whilst being dependent on the sentiment of the Kremlin to allow such a large volume of trade.  

The Middle Corridor’s Role in Kazakhstani Trade Independence

Despite Russia’s influence over Kazakhstan via the CPC and Druzhba pipelines, Kazakhstan is still developing its trading routes to reduce dependency on Russian infrastructure. The Middle Corridor is a part of China’s Belt and Road Initiative and plans to implement the most efficient trading route from Beijing to the EU, spanning 2,000km less than the Eurasian Nothern Corridor, which crosses over Russia and conducts circa 90% of rail traffic between Europe and the Far East (Kotsev, 2023). Hence, with the enhancement of the Middle Corridor, the transportation time will be cut by one week. Kazakhstan’s involvement in the project consists of the connection of the Trans-Kazakhstan railway to the Baku-Tbilisi-Kars railway across the Caspian Sea. This trade route will eventually link China to Eastern Turkey, where it is easier to access the EU crude oil market, considering that Turkey is part of the EU customs union and is strategically positioned geographically to the EU to engage in trade.

Kazakhstan has already begun to develop the Middle Corridor by increasing the volume of oil exported from the Port of Aktau in West Kazakhstan to the Port of Baku in Azerbaijan by 75% in April 2023, in comparison with the previous year (Ozat et al., 2023). In addition to the increase in trade, Kazakhstan incorporated the ports of Aktau and Kuryk into the Seaport Aktau Special Economic Zone (SEZ) last summer. Such a decision will boost investment and create one of the world’s most significant international transport corridors. Vital investment has already been realised within the SEZ regarding the construction of a container hub at the Aktau port (Sakenova, 2023), which further displays Kazakhstan’s intentions towards the Middle Corridor and how this route is considered a viable asset to tear itself away from Russian influence. Furthermore, Kazakhstan, Azerbaijan, and Georgia announced in June that they plan to unify rail tariffs and set up a joint logistics company to assist their cohesion and avoidance of trade routes that involve pariah states such as Russia or Iran (Kotsev, 2023). Cohesion between these three countries displays the clear intention and recognition that they must diversify their trade away from Russia by introducing trade liberalisation.  

Yet another form of dependence was further demonstrated during the January 2022 nationwide riots against rising fuel prices. The riots saw many civilians and security personnel dead and were so severe that the Kazakhstani security personnel could not contain the rioters. As a result, President Tokayev called upon the Moscow-led CSTO (Collective Security Treaty Organisation), which also includes Tajikistan, Belarus, Armenia, and Kyrgyzstan, to help settle tensions (BBC, 2022). In the short term, Tokayev’s decision worked. However, the decision represented how Kazakhstan heavily relies on Russia despite its continued efforts to convince the external world that this is different.

Overall, Kazakhstan is making significant steps to increase its independence from Russia, mainly via the Middle Corridor. However, Kazakhstan still needs to welcome some assistance from the Kremlin, in coherence with its multi-vector foreign policy, which involves a pragmatic approach to all key states to create maximal freedom for national interests (Rossi, 2023).

EU-Kazakhstan diplomacy

Kazakhstan sought to improve their bilateral relations with the EU in 2015 by signing the Enhanced Partnership and Cooperation Agreement (EPCA) – the only Central Asian nation to do so. As a result, bilateral trade has flourished, with the EU representing 60% of Kazakhstani foreign direct investment in 2022 (Romano, 2022), whilst Kazakhstan has become the third-largest non-OPEC supplier of oil to the EU, after Norway and Russia (Nakhle, 2023). Kazakhstan also agreed to a ‘strategic partnership’ with the EU, mainly regarding raw materials and green hydrogen which builds on the EPCA (European Commission, 2023). Such a partnership interests the EU because it supports the REPowerEU strategy, which calls for a 40% reduction of Russian fossil fuels in the EU by 2030 (Abbasova, 2022), whilst Kazakhstan perceives this as an opportunity to reduce their dependency on Russian fossil fuels.

A significant deal for this partnership involves the private German-Swedish company Svevind, which owns the largest wind farm in Europe. The project envisages the construction of a desalination plant in the Mangystau region in Kazakhstan, which has an estimated annual capacity of two million tonnes of green hydrogen (Satubaldina, 2023). Svevind has recognised the significant hydrogen export potential to Europe because of the crippling of Russian energy suppliers for the EU, and the capability of Kazakhstan as a sufficient replacement.

Another major deal for the EU and Kazakhstan regards investment from German company HMS Bergbau AG which intends to develop lithium deposits in Kazakhstan (Sakenova, 2023). Lithium is vital for producing electronics, medical devices, and, most notably, electric cars. European companies such as HMS Bergbau AG have taken a keen interest in lithium deposits in Kazakhstan because the EU pledged to end the sale of CO2-emitting cars by 2035 (Abnett, 2023). Therefore, the Svevind and HMS Bergbau AG agreements reference Kazakhstan’s and the EU’s desire to integrate valuable trade links to develop sustainable energy supply chains whilst bolstering their respective economies. 

In addition to trade deals, EU leaders have given formal diplomatic support to Kazakhstan to establish their position amid the Russo-Ukrainian war. European Council President Charles Michel travelled to Astana to give a “strong signal” of the EU’s intention to commit to Central Asia (Khassenkhanova, 2022). Meanwhile, German Foreign Minister Annalena Baerbock repeated that Kazakhstan has a partner in the EU and will not be left only with Russia (Slobodov, 2023). Nevertheless, the most recent and significant display of diplomatic support was Emmanuel Macron’s visit to Astana, where the French President signed several agreements worth $1.4 billion while making diplomatic visits (Satubaldina, 2023). Furthermore, France relies on nuclear power to provide 80% of their domestic energy and relies on Kazakhstan to export 27% of its uranium to fuel nuclear plants (Satubaldina, 2023). Following Niger’s military coup in July 2023, which threatened up to 20% of France’s uranium imports (Maad, 2023), Macron’s trip to Kazakhstan contributed to reassuring France and represented the EU’s testament and reliability towards Kazakhstan’s role in European energy security (Satubaldina, 2023). (Satubaldina, 2023). 


Kazakhstan’s multi-vector foreign policy is necessary for its development because of its geographical location and history in the Soviet Union. They are naturally inclined to be involved in Russian trade, as in the case of Kazakhstan’s reliance on CPC and Druzhba pipelines. However, the Russo-Ukrainian war has changed this scope and caused instability in Kazakhstani oil exports. Regardless of the moral hazards and implications, Kazakhstan recognised the necessity to diversify its trade links away from Russia, which the EU recognised as an ample opportunity. 

EU oil stocks were also severely affected by Russian hostility as before the Russo-Ukrainian war, the EU had imported 31% of its oil from Russia (Cooban, 2023). Faced with the need to diversify their trading partners, the EU increased their imports from the U.S. and Norway but also recognised Kazakhstan’s willingness to trade with the bloc and provide lucrative opportunities for investment and commerce. Kazakhstan has aligned itself with EU ethics which has been observed by their refusal to recognise occupied Ukrainian regions as Russian territories whilst also keeping contact with Ukrainian President Volodymyr Zelensky. Such compliance with EU views allows Kazakhstan to export to EU markets and support European oil requirements while diversifying its trading partners away from Russia. 



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