Turkmenistan Business & Economy - The Times Of Central Asia

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Trade

Afghanistan Aims to Increase Trade with Central Asia to $10 Billion

Afghanistan aims to increase trade with Central Asian countries to $10 billion over the next three to four years, Foreign Minister Amir Khan Muttaqi said at a meeting in Kabul. According to Muttaqi, Afghanistan’s trade turnover with countries in the region reached approximately $2.7 billion in 2025, marking a significant increase compared to previous years. The statement was made during a consultative dialogue involving representatives from Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan, focused on regional cooperation, trade, and the development of transit routes. Muttaqi said Afghanistan intends to leverage its geoeconomic position to connect Central Asia with markets in South and West Asia. Among key projects, he highlighted the TAPI gas pipeline, which is currently under construction. Afghan authorities are seeking to expand economic ties despite ongoing international sanctions affecting the banking sector, which continue to constrain investment inflows. At the same time, Russia remains the only country to have officially recognized the Taliban government that came to power in 2021. Several countries, including China, India, Turkey, and the United Arab Emirates, maintain a diplomatic presence in Kabul. Landlocked Central Asian countries view southern routes through Afghanistan as an alternative to northern corridors via Russia, which have been complicated by sanctions. Afghanistan shares a border of more than 2,300 km with Tajikistan, Uzbekistan, and Turkmenistan, and continues to face security challenges, including threats from extremist groups, drug trafficking, and irregular migration. However, Muttaqi said the situation along the borders remains generally stable. Earlier reports indicated that Kazakhstan is exploring the possibility of investing in rare earth metal mining in Afghanistan. The national company Tau-Ken Samruk is conducting laboratory analysis of samples collected in Afghanistan and Rwanda.

Fuel Exports

Turkmenistan Introduces Fuel Limits for Vehicles Leaving the Country

Turkmenistan introduced new rules governing fuel exports at the beginning of April. Under the regulations, the amount of diesel in the tanks of vehicles leaving the country must not exceed 300 liters. If this limit is exceeded, a fee of approximately $1 per additional liter is charged. The new rules primarily affect heavy-duty trucks, which traditionally carry large volumes of fuel. Enforcement has been assigned to the State Border Service, the State Customs Service, and the state-owned company Turkmenneft. Specialists from the General Directorate of Türkmennebitönümleri, the entity responsible for the distribution of petroleum products, are tasked with measuring fuel volumes at border checkpoints. The fuel volume of each vehicle is checked and entered into an electronic system. If the limit is exceeded, the driver is issued two receipts: one remains with the driver, while the other is sent to a bank for payment. All measurements are also recorded in a dedicated logbook. According to the authorities, this system is intended to reduce the risk of fraud and informal payments. The reasons for tightening the regulations are clear. Diesel in Turkmenistan costs around $0.05 per liter. By comparison, in the summer of 2025, it cost about $1 in Uzbekistan, approximately $0.60 in Kazakhstan, and around $0.90 in Russia. This price disparity has long created conditions for black-market activity. Fuel is smuggled abroad and resold, while domestic shortages periodically occur. Drivers face restrictions at filling stations, and additional fuel is often sold at a surcharge that can reach 200% of the official price. As a result, the market has become distorted, with potential state revenue reportedly being diverted through corrupt practices. Another contributing factor is the recent rise in global fuel prices, driven in part by escalating tensions in the Strait of Hormuz, a critical route for global oil and gas shipments. Similar measures have been introduced elsewhere in the region. Kazakhstan tightened regulations on the export of petroleum products and, in autumn 2025, imposed a full ban that remains in effect until May this year. Russia also restricted fuel exports starting April 1, with the measures expected to remain in place until at least July 31.

Food Security

Iran Conflict Drives Food Price Pressures Across Central Asia

The war around Iran is beginning to push up food price risks in Central Asia as disruptions to shipping through the Strait of Hormuz raise fertilizer and fuel costs, while Tehran’s halt to some food exports adds pressure in regional markets. The impact is not manifesting as shortages, but as rising costs across the systems that produce, move, and sell food. The United Nations has warned that the crisis is disrupting one of the world’s most important trade corridors for energy and agricultural supplies. A large share of global fertilizer trade passes through the Strait of Hormuz, and reduced shipping traffic is tightening supply and pushing up prices. Higher fuel costs are adding a second layer of pressure on farmers and transport networks. Fertilizer and fuel are among agriculture’s highest costs. Even modest increases can compress margins quickly, forcing farmers to cut usage or pass costs on, with pressure moving through to retail prices. Central Asia is particularly exposed to this shift in costs. The region relies on imported fuel and fertilizers, and depends on long, multi-stage transport routes. When costs increase at any point in that chain, they accumulate before goods reach markets. The second layer of pressure comes from Iran itself. On March 3, Tehran imposed a ban on exports of food products as part of wartime economic measures. Reporting in Tajikistan indicates that the move could affect the availability and pricing of goods such as dairy, sugar, fruit, and spices, particularly in wholesale and lower-cost retail markets. Iran is not a dominant supplier, but plays a role in specific markets. Tajikistan is the clearest example. Tajikistan has also expanded its economic relationship with Iran in recent years, supported by cooperation in industry and transport. Iranian goods are widely present in retail supply chains, and trade between the two countries has grown steadily in recent years. That growth is part of a broader trend. Iran’s economic ties with Central Asia have expanded under new trade arrangements and bilateral initiatives. Kazakhstan and Iran have discussed increasing trade turnover to $3 billion, reflecting the rising use of Caspian routes and port infrastructure, which are now under threat. [caption id="attachment_46480" align="aligncenter" width="1600"] Aralsk Bazaar. Rising transport and fertilizer costs are beginning to push up food prices across the region. Image: Michael J. Bland[/caption] Transport adds a third layer of pressure. As risks rise across the Middle East, airlines and freight operators are avoiding large swathes of Iranian airspace and surrounding routes, forcing rerouting and raising costs across supply chains. European aviation safety authorities have issued conflict-zone bulletins warning of heightened risks in the region, and carriers have adjusted accordingly. Rerouting increases fuel use, extends journey times, and raises insurance costs. Those increases affect cargo as well as passengers, and over time, higher logistics costs feed into the price of imported goods, including food. On land, the same pattern is visible. As southern routes become less predictable, more freight is shifting toward the Trans-Caspian International Transport Route - the Middle Corridor -...

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...

Gas Exports

Berdimuhamedov’s Beijing Visit and the Reshaping of Central Asia’s Gas System

The visit by Turkmenistan’s Gurbanguly Berdimuhamedov, Chairman of the Halk Maslahaty, to Beijing on March 17–19 did more than routinely reaffirm Turkmenistan’s ties with China. It opened onto a wider issue in Central Asian energy, not simply about continuing the cooperation between Ashgabat and Beijing, but about how the renewal of that cooperation would affect the Central Asia–wide gas production and transmission system that increasingly intersects with China’s wider infrastructural and industrial presence in the region. No dramatic announcement of any new export route highlighted that wider significance, which emerged from a narrower sequence of policy initiatives that carried broader implications. Xi Jinping used the visit to restate the importance of cooperation in natural gas while widening the agenda to include connectivity, clean energy, artificial intelligence, and the digital economy. Within days of the meeting, Turkmenistan moved ahead on a new phase of development at Galkynysh with CNPC. These events signal a further deepening Chinese role in the upstream and systemic organization of Central Asian energy. What Beijing Actually Signaled Beijing’s own language about the matter was direct. In the official Xinhua account of Xi’s March 18 meeting with Berdimuhamedov, China called for the two sides to “expand the scale of cooperation in the natural gas sector” and to raise trade and investment levels. Such language confirms that gas remains at the center of the relationship even as the bilateral agenda widens. For all the parallel discussions of digitalization, transport links, and non-resource cooperation, the political weight of Sino-Turkmen ties still rests primarily on energy. The Chinese side, however, did not treat gas as a self-contained file. Gas remains the primary, but it is increasingly embedded within a wider pattern of regional engagement comprising energy, transport, and adjacent economic sectors. The same Beijing readout on the meeting with Berdimuhamedov placed connectivity, artificial intelligence, the digital economy, and clean energy alongside natural gas under a broader heading of expanded cooperation. This framing removes gas from its status as a stand-alone commodity and places it within a larger operational perspective. Neither the main Chinese readout nor the public official Turkmen framing of the visit highlighted Line D of the Central Asia–China gas pipeline system. Line D has long stood as the clearest indicator of a future expansion of Turkmen gas exports through Tajikistan and Kyrgyzstan into China. Had the visit produced a concrete breakthrough on that front, the official language would have been the obvious place to signal it. The practical movement after the trip lay elsewhere. Why It Matters Beyond Turkmenistan The focus lay at Galkynysh. In the immediate wake of the visit, President Serdar Berdimuhamedov authorized Turkmengaz to conclude a turnkey contract with CNPC Amudarya Petroleum Company Ltd. for Phase 4 of the Galkynysh gas field. The official Turkmen account linked the decision to meetings held during Gurbanguly Berdimuhamedov’s visit to China and specified facilities capable of processing 10 billion cubic meters of marketable gas per year. TCA reported the same move as a new phase of CNPC-backed field development....