Kazakhstan transits four times more Russian oil to Uzbekistan

Uzbekistan has started significantly increasing imports of Russian oil through Kazakh pipelines after a three-year-long hiatus, Kazakh oil pipeline operator KazTransOil (KTO) has said.

KTO shipped 10,700 tonnes of Russian oil in the first quarter and 37,900 tonnes in the second quarter for transit to Uzbekistan, the company said. Deliveries are made via the Omsk-Pavlodar-Shymkent-Shagyr pipeline. At Shagyr, the oil is loaded onto carts for transport to Uzbekistan via rail.

Russia began transiting oil to Uzbekistan via Kazakhstan six years ago, with volumes amounting to 67,900 tonnes in 2017, or 1,400 barrels per day (bpd) in 2017. But they slumped to 36,000 tonnes in 2018 and then were halted completely. Transit volumes in 2023 are expected to amount to 300,000 tonnes, with a value of $9mn, according to a deal reached between Russia’s Gazprom and the Uzbek energy ministry in April this year and a separate agreement with Uzbekistan and Kazakhstan’s national oil companies (NOCs), Uzbekneftegaz and Kazmunaygas, announced last December.

Uzbekistan has an estimated 100mn tonnes (7.3bn barrels) in proven oil reserves, and a further 1.1 trillion cubic metres in proven gas reserves. But these resources are found in hundreds of small deposits, rather than in a handful large ones, driving up recovery costs. Uzbek authorities have transferred rights to more than 60% of hydrocarbon deposits to foreign companies, but this attempt to attract more investment has not improved the situation.

As a result, Uzbekistan has struggled to boost domestic oil and gas production and has therefore had to resort to increased imports from Russia. The shortage became particularly acute last winter, which was abnormally cold.