Kazakhstan Business & Economy - The Times Of Central Asia

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Oil Imports

Georgia May Replace Russian Oil with Imports from Turkmenistan and Kazakhstan

Georgia’s only oil refinery, owned by Black Sea Petroleum (BSP), plans to completely stop importing Russian oil and instead switch to crude supplies from Turkmenistan and, potentially, Kazakhstan. This was announced by the company’s CEO, David Potskhveria. According to Potskhveria, the shift would not only diversify supply sources but also open access to European markets. “We will completely replace Russian oil with Turkmen oil, and then with Kazakhstani oil. This will give us the opportunity to export products to the EU,” he said. The rationale is straightforward: imports of Russian petroleum products into the European Union are currently prohibited. Maintaining previous supply arrangements would effectively block access to European markets. However, switching suppliers presents logistical challenges. As Potskhveria noted, processing of Turkmen crude can begin only after transit issues through Azerbaijan are resolved. For now, logistics remain the main bottleneck. While the refinery is technically ready, implementation depends on securing reliable transport routes. The proposed move away from Russian oil follows earlier developments. In late February, the EU considered including the Kulevi port on a preliminary sanctions list due to its import and processing of Russian crude. The trigger was a shipment delivered in October 2025 by Russneft, involving approximately 105,000 tons of oil to the port of Kulevi. The shipment prompted criticism from the Georgian opposition, which accused the authorities of undermining the sanctions regime and appealed to European institutions. The Kulevi refinery is a relatively new entrant to the regional oil market. It began operations in December last year and has already outlined expansion plans. Its current processing capacity is around 1.2 million tons per year, with plans to increase this to 4.5 million tons. At present, the facility produces fuel oil, diesel, and other petroleum products. Future plans include expanding output to Euro-5 standard gasoline, jet fuel, and Eurodiesel. BSP’s international partners reportedly include Trafigura and Saudi Aramco.

Fuel Prices

Central Asia Avoids Fuel Shock as Global Pressures Build

Central Asia has so far avoided the immediate fuel shocks spreading across much of the world following the U.S. and Israel’s war with Iran. There are no lines at gas stations, no visible shortages, and no signs of panic buying. But that stability sits within a rapidly tightening global market, where disruptions in Asia and policy responses in Europe are reshaping fuel flows in ways the region will struggle to avoid. Across Southeast Asia, governments are already taking precautionary steps. Some state agencies and private firms are shifting parts of their workforce to remote work to reduce fuel consumption and prepare for potential price spikes and logistics disruptions, while Thailand is preparing contingency measures, including possible fuel rationing. China, one of Asia’s largest suppliers of refined fuels, has moved to restrict exports of gasoline, diesel, and jet fuel in an effort to prevent domestic shortages linked to the war. The move is expected to tighten supplies across Asia, especially for countries that rely on Chinese fuel imports. China supplied about one-third of Australia’s jet fuel last year, highlighting the wider regional impact, and roughly half of the Philippines’ and Bangladesh’s in 2024. Vietnam has already warned airlines to prepare for flight reductions in April due to the risk of shortages caused by these export restrictions. Indonesia is also imposing limits on fuel sales. Fuel-related pressures have begun to emerge in Europe as well. Poland has introduced tax measures aimed at reducing fuel prices, with the government saying this will lower prices for consumers. Slovenia, meanwhile, has introduced significant restrictions on fuel consumption. Under new rules, private motorists are limited to purchasing a maximum of 50 liters per day, while businesses and farmers may purchase up to 200 liters daily. The combined effect of war-driven energy shocks and renewed tariff barriers is raising global costs and adding pressure across trade, transport, and inflation. Against this backdrop, Central Asia’s apparent stability is misleading. It is highly unlikely that import-dependent states such as Kyrgyzstan and Uzbekistan will be as well protected as Kazakhstan, which may benefit in the short term from higher crude prices. Starting April 1, Russia is banning gasoline exports in an effort to stabilize its own domestic market. Russia is a key fuel supplier to Central Asia. However, according to assurances from the Ministry of Energy of the Russian Federation, the temporary export ban will not affect supplies to Uzbekistan. Deliveries under intergovernmental agreements are expected to continue, ensuring that at least part of the region’s supply remains uninterrupted. In Kyrgyzstan, despite recent developments, fuel prices and supplies remain relatively stable. The government is considering lowering taxes or temporarily waiving excise duties for fuel importers should the crisis continue. Information from Turkmenistan is difficult to verify independently. Despite reports of fuel shortages at gas stations last year, official media are now indicating a significant increase in domestic gasoline production. The production plan for January-February 2026 was reportedly fulfilled at 122.7%, according to Deputy Chairman of the Cabinet of Ministers Guvancha...

Science

Increased Funding for Science in Kazakhstan Has Yet to Yield Results

Kazakhstan has significantly increased its spending on research and development, but this has yet to translate into a noticeable economic impact. Analysts point to structural imbalances and a weak link between science and business. According to the National Bureau of Statistics, research and development (R&D) funding in 2025 amounted to approximately $549 million, an increase of 19% compared to the previous year and nearly threefold over the past five years. At the same time, the funding structure has shifted toward greater state involvement. The share of budgetary funds rose to 81.5%, up from 51.3% in 2020, while private sector participation has declined to minimal levels. Experts note that this model limits the commercialization of scientific developments, which in most countries is primarily driven by the business sector. Kazakh President Kassym-Jomart Tokayev has previously stated that science funding has yet to deliver practical results, highlighting systemic inefficiencies and the ineffective use of resources. More than half of total funding, about $282 million, is allocated to research staff salaries. Meanwhile, approximately $117 million is spent on equipment, materials, and infrastructure. Funding for experimental design and development work, critical for bringing technologies to market, has declined to around $29 million, down from the previous year. Most expenditures continue to be directed toward basic and applied research. Despite increased investment, science’s contribution to the economy remains limited. R&D spending accounted for approximately 0.16% of GDP in 2025, unchanged from the previous year. Industry participation in scientific research also remains low, with spending in key sectors such as metallurgy, mechanical engineering, and the chemical industry lagging behind. Analysts argue that without a stronger role for the private sector and more effective commercialization mechanisms, increased funding is unlikely to produce significant technological outcomes.

Renewable Energy

Chinese Firm Begins Construction of Wind Farm in Kazakhstan

China’s State Power Investment Corporation has begun construction of a 1 GW wind farm in northern Kazakhstan. The project, located near the city of Ekibastuz in the Pavlodar region, is being implemented jointly with Pavlodar Green Energy LLP under agreements signed with the Energy Ministry on January 29. According to the ministry, foreign direct investment in the project will total approximately $1.2 billion, with commissioning scheduled for 2029. The wind farm will include a 300 MW energy storage system designed to stabilize electricity output and support Kazakhstan’s unified power grid. Once operational, the facility is expected to generate around 3.4 billion kWh of electricity annually. The project is also projected to reduce greenhouse gas emissions by up to 2 million tonnes of CO₂ per year. In 2025, renewable energy generation reached 8.6 billion kWh, exceeding official targets by 19.4%. Renewables accounted for 7% of total electricity output, up from 6.43% in 2024. Kazakhstan currently operates 162 renewable energy facilities with a combined capacity of approximately 3.5 GW. In 2026, authorities plan to increase renewable output to 8.8 billion kWh through the launch of 10 new projects, including wind, solar, and hydropower plants. Despite growth in renewables, Kazakhstan remains heavily dependent on coal and natural gas. Total electricity generation stood at 123.1 billion kWh in 2025 and is expected to rise to 126.5 billion kWh in 2026. The government is also advancing plans to add 7.6 GW of coal-fired generation capacity, supported by reserves estimated at over 33 billion tonnes. At the same time, Kazakhstan aims to increase the share of renewables to 15% by 2030 and 50% by 2050, alongside plans to update legislation on alternative energy and hydrogen development. The Times of Central Asia previously reported that Kazakhstan is launching a large-scale investment program in the energy sector. By 2030, the country plans to attract at least $15.5 billion for the development of coal-fired power generation. The corresponding national project has been approved by the government.

Flour Exports

Kazakhstan Tests Trans-Caspian Route for Flour Exports to U.S.

Kazakhstan has begun testing a new export route for shipping finished products to the United States via the Trans-Caspian International Transport Route (TMTM), marking a step toward diversifying logistics and expanding the geographic reach of its exports. In early March, KTZ Express JSC organized the multimodal transport of a shipment of Kazakhstani flour along the route. The project is considered a pilot, but its results could help determine the prospects for establishing a sustainable commercial corridor. The shipment consisted of 24 tons of wheat flour. The shipper was SALAMAT Company LLP, one of Kazakhstan’s leading flour producers. Transportation is being carried out in container format using both rail and maritime infrastructure. The route includes: Kostanay to the Port of Aktau by rail Crossing the Caspian Sea to the Port of Alyat (Azerbaijan) Transit through Georgia via the Port of Poti and across the Black Sea Further maritime transport via Istanbul and the Mediterranean Sea Entry into the Atlantic Ocean with final delivery to New York The maritime segment of the route is being carried out in partnership with CMA CGM, one of the world’s largest container shipping companies. The project demonstrates that the TMTM can be used for the delivery of higher value-added products to distant markets, including the U.S. This is not the first shipment of Kazakhstani flour to the U.S. In 2025, the product had already entered the U.S. market, becoming available on platforms such as Amazon and Walmart, as well as being used by a number of bakeries. Currently, there are plans to expand distribution, including entry into the restaurant and coffee shop segments. The Kazakhstani side is also preparing to supply flour to major retail chains such as Costco, Whole Foods Market, and Trader Joe’s. According to project participants, the successful completion of the pilot shipment has confirmed the viability of the logistics model. As part of further development, there are plans to shorten the maritime segment. In particular, the option of shipping cargo directly from Istanbul to New York without additional stops at European ports is being considered, which would reduce delivery times. Officials have not yet confirmed whether the route will be established as a regular commercial channel or remain a pilot project.

Aviation

Kazakhstan Expands Aviation Hub with Focus on U.S. and Long-Haul Flights

Kazakhstan is preparing for an audit by the U.S. Federal Aviation Administration (FAA) that would allow the country to launch direct flights to the United States. To achieve this, the government must demonstrate the reliability of its aviation regulatory system, the presence of an independent and effective oversight body, and transparent airline certification procedures. The country is also planning to acquire modern long-haul aircraft and has begun construction of its first maintenance center to service them. The Times of Central Asia spoke with representatives of Kazakhstan’s aviation industry about the progress of these efforts, when direct flights to North America may begin, and what challenges remain. As part of efforts to expand international routes and strengthen Kazakhstan’s position as an aviation hub between Europe and Asia, Bauyrzhan Umiraliyev, head of the Aviation Safety Department at the Civil Aviation Committee, said the national carrier Air Astana plans to purchase 15 Boeing 787 Dreamliner aircraft, with deliveries scheduled between 2026 and 2035. “This is a strategically important decision that can significantly boost civil aviation, the economy, and the country’s international standing,” an aviation authority representative told The Times of Central Asia. “Long-haul aircraft will allow airlines to launch direct flights to destinations in North America, Europe, Asia, and Australia that were previously inaccessible or required layovers.” The aircraft will also enhance Kazakhstan’s attractiveness as a transit hub and tourist destination, while enabling airlines to compete internationally through improved efficiency, pricing, and service quality. The purchase of these aircraft, previously delayed twice since 2025 due to production backlogs at Boeing, is expected to open new opportunities for Kazakhstan’s aviation sector, particularly following the anticipated attainment of Category 1 (CAT-1) safety status, confirming compliance with international aviation standards. CAT-1: The Path to the U.S. In 2024, Kazakhstan’s aviation authorities and the FAA signed an agreement to conduct a technical assessment under the International Aviation Safety Assessment (IASA) program. According to Aslan Satzhanov, Acting Executive Director of the Aviation Administration of Kazakhstan, the assessment identified areas requiring improvement in flight safety oversight. “We are currently working on amendments to regulatory acts to implement modern safety procedures and standardize processes, with technical support from FAA experts,” Satzhanov said. In parallel, experts from the U.S. Transportation Security Administration have conducted preliminary assessments of airport security under the Export Control and Border Security Program. The first visit, in October 2021, resulted in a generally positive evaluation of Kazakhstan’s aviation security framework. A follow-up visit in August 2022 focused on screening procedures for passengers, baggage, and cargo at Astana Airport. “The capital’s airport received a positive assessment, and the coordinated work of aviation security personnel was noted,” Satzhanov said. According to preliminary information, the full IASA audit may take place after long-haul aircraft enter service and relevant infrastructure is fully prepared; though, it should be noted that Kazakhstan does not control the timing of the IASA audit. Industry Awaits New Aircraft Preparations for launching new international routes, including previously announced flights to New York and Tokyo, are already underway....