Central Asia and Azerbaijan: What the Region’s Leaders Agreed at Issyk-Kul

The Kyrgyz resort town of Cholpon-Ata, on the shores of Lake Issyk-Kul, briefly became Central Asia’s political capital as it hosted a series of high-level meetings, including bilateral talks between the presidents of Kyrgyzstan and Uzbekistan, the state visit of Azerbaijani President Ilham Aliyev, and the informal Consultative Meeting of the Heads of State of Central Asia and Azerbaijan. Only a few years ago, such a format would have seemed unlikely. Today, however, regional leaders are discussing joint railway projects, energy security, transport corridors, investment, and foreign-policy coordination rather than managing old disputes. The agreements reached in Cholpon-Ata suggest that the consultative format is gradually evolving from a platform for political dialogue into a mechanism for practical regional cooperation. From Conflict to Alliance                                                 Ahead of the informal multilateral meeting, Kyrgyz President Sadyr Japarov and Uzbek President Shavkat Mirziyoyev held bilateral talks that set the tone for the broader regional meeting. Relations between the two countries now stand in sharp contrast to the situation sixteen years ago. Following the ethnic violence in southern Kyrgyzstan in June 2010, relations between Bishkek and Tashkent entered one of their most difficult periods since independence. The agenda between the two neighbors has since changed dramatically. Speaking in Cholpon-Ata, Mirziyoyev said relations between Uzbekistan and Kyrgyzstan had reached “a historic peak.” Bilateral trade has increased almost tenfold in recent years, reaching $1.2 billion last year. The two countries now have around 450 joint ventures, operate a joint Development Fund to support cooperative projects, and have established 15 air routes and five bus services linking their cities. Mirziyoyev described the China-Kyrgyzstan-Uzbekistan railway as one of the most important joint initiatives between the two countries, arguing that the project would reshape transport links across Eurasia. “This railway will fundamentally change the geopolitical landscape. Those who understand what it took to make this happen know what a major achievement it is,” Mirziyoyev said. The talks concluded with the signing of a Treaty on Allied Relations between Kyrgyzstan and Uzbekistan. The two sides also exchanged several bilateral documents, including agreements covering sections of their common border and the joint use of the Chashma spring. A Broader Regional Agenda While the Japarov-Mirziyoyev talks focused primarily on bilateral relations, the informal Consultative Meeting of the Heads of State of Central Asia and Azerbaijan broadened the discussion to regional integration, transport connectivity, energy security, and foreign-policy coordination. Opening the meeting, Kyrgyz President Sadyr Japarov said one of the clearest results of closer regional cooperation had been the Central Asian countries’ growing support for one another on the international stage. As an example, he cited the region’s joint support for Kyrgyzstan’s successful bid for a non-permanent seat on the United Nations Security Council for the 2027-2028 term. Japarov also revived the idea of introducing a single tourist visa for foreign visitors traveling across Central Asia, proposing that the region’s foreign ministries intensify consultations on the initiative. Azerbaijan’s participation as a full member gave the meeting additional significance. Baku joined the consultative format as a full participant in November 2025, reflecting the growing importance of trans-Caspian connectivity and the increasingly close economic ties linking the South Caucasus with Central Asia. During his state visit to Kyrgyzstan, Azerbaijani President Ilham Aliyev announced that the two countries had signed a package of bilateral agreements, including a Treaty on Allied Relations, elevating cooperation to a new level. The sides also agreed to increase the capital of the Kyrgyz-Azerbaijani Development Fund from $100 million to $200 million. According to Aliyev, the fund has already financed several projects, some of which are now operational, while considerable scope remains for further investment cooperation. Mirziyoyev argued that Central Asia should now be viewed within a broader geopolitical framework. In his view, a region that was once fragmented is gradually consolidating around a shared development agenda, while Azerbaijan’s participation extends that process beyond Central Asia itself. “A historic opportunity is opening before us to create a common space for development linking Central Asia, the South Caucasus, and Afghanistan. We must seize this moment to build lasting ties and good-neighborly relations in the heart of Eurasia,” Mirziyoyev said. Kazakh President Kassym-Jomart Tokayev also emphasized the institutional dimension of regional cooperation. He described the current period as the most successful in Central Asia’s modern history and proposed developing an implementation roadmap for the Treaty on Friendship, Good-Neighborliness and Cooperation for the Development of Central Asia in the 21st Century, which had previously been signed by the region’s leaders. Transport and Energy Take Center Stage Beyond political coordination, the leaders devoted considerable attention to practical projects aimed at strengthening regional connectivity and reducing Central Asia’s vulnerability to external economic pressures. Tajik President Emomali Rahmon proposed exploring the construction of a large regional oil refinery equipped with modern technologies. He argued that continued volatility in global and regional energy markets had highlighted the importance of energy security as one of the key conditions for sustainable economic development. “Given today’s realities, we should jointly consider this extremely important issue,” Rahmon said. The proposal comes amid continued turbulence in regional fuel markets. In summer 2026, Kyrgyzstan and Tajikistan experienced fuel shortages and price increases as Russian exports fell, exposing the region’s dependence on external suppliers and lending additional weight to calls for expanding domestic refining capacity. Transport connectivity was another dominant theme. The China-Kyrgyzstan-Uzbekistan railway, highlighted by Japarov and Mirziyoyev during their bilateral talks, was repeatedly presented as a project capable of reshaping trade flows across Eurasia. Together with the continued development of the Trans-Caspian International Transport Route, or Middle Corridor, it is expected to strengthen Central Asia’s role as a major transit region linking Asia and Europe. As the principal gateway across the Caspian Sea, Azerbaijan has become an essential link between Central Asia and European markets. Transport infrastructure is increasingly emerging as one of the strongest drivers of cooperation between Central Asia and the South Caucasus. The Next Meeting Turkmen President Serdar Berdimuhamedov announced that the eighth Consultative Meeting of the Heads of State of Central Asia and Azerbaijan is scheduled for October 8, 2026, in the Avaza National Tourist Zone on Turkmenistan’s Caspian coast. According to Berdimuhamedov, Turkmenistan has already circulated a draft agenda covering five priority areas: regional security; deeper cooperation between Central Asia and Azerbaijan; energy and transport connectivity; joint efforts to address environmental challenges, climate adaptation, water resource management, and the restoration of the Aral Sea; and expanded cooperation in education, science, culture, and youth exchanges. From Political Dialogue to Regional Integration The informal meeting concluded with the adoption of the Cholpon-Ata Declaration, reaffirming the participating countries’ commitment to expanding cooperation in economic development, transport, energy, security, and humanitarian exchanges. According to Kyrgyz President Sadyr Japarov, the document reflects the level of trust that has developed among the region’s states and their shared determination to deepen cooperation further. Yet the meeting’s significance extends beyond the documents signed. Sixteen years ago, relations between some Central Asian neighbors were overshadowed by border disputes, political tensions, and mutual distrust. At Cholpon-Ata, by contrast, discussions centered on railway construction, transport corridors, energy security, investment mechanisms, and the coordination of regional policies. The meeting also highlighted the changing geography of regional cooperation. Azerbaijan, once viewed primarily as an external partner, is becoming an integral participant in Central Asia’s broader economic agenda. Together with the continued development of the Middle Corridor, this is gradually linking Central Asia and the South Caucasus into a wider economic space built around shared transport, trade, and infrastructure interests. The consultative format has evolved as well. What began as a forum for rebuilding political dialogue is increasingly becoming a mechanism for coordinating practical regional initiatives. Judging by the agreements reached at Issyk-Kul, the emphasis is shifting from declarations of intent toward projects capable of reshaping Central Asia’s economic geography over the coming years.

Kazakhstan Smart Cities Face the Test of Turning AI Ambition Into Results

Almaty has ranked 38th among 61 cities in the inaugural Intelligent Cities Index, a respectable result that also reveals the distance between Kazakhstan’s digital ambitions and the world’s leading urban centers.

The index, compiled by Boston Consulting Group (BCG), assesses how cities use artificial intelligence and digital technology to improve services and outcomes for residents. Almaty scored 62 out of 100, placing it in BCG’s “emerging” category.

This score placed Almaty 38th among 61 major cities worldwide, ranking above cities including Milan, Melbourne, and Istanbul. However, it remained five points below the lowest-ranked city in BCG’s higher “accelerating” category and 23 points behind London, which headed the index with 85 points.

Almaty performed reasonably well on strategy, adoption, and digital infrastructure, but its weakest score was for “ways of working,” which covers institutional readiness, governance, and project implementation.

The publication of these rankings has coincided with Kazakhstan’s adoption of a national methodology for  Smart Cities and Smart Regions, approved by the Ministry of Artificial Intelligence and Digital Development.

The framework, which took effect on July 12, sets common requirements and deadlines for the country’s cities. The question is whether it will improve urban life or encourage local authorities to accumulate equipment and platforms in pursuit of higher scores.

Tackling Everyday Urban Problems

The clearest examples in Almaty concern public transport, which residents will be able to judge through their daily journeys. Buses already carry GPS trackers and video cameras, while fares can be paid through the ONAY electronic payment system.

The city plans to add payment by bank card, Apple Pay, and Samsung Pay. Electronic information displays are due to be installed at 1,188 bus stops during 2026–27.

Officials also announced in February that 50 driverless vehicles would be placed on city roads in cooperation with Yandex Kazakhstan under a pilot program. The stated deadline was May 1, 2026, although no subsequent official announcement confirming the deployment was readily available by late July. This illustrates a wider problem: announcements are often reported more prominently than results.

For these projects to improve Almaty’s position, the city will need to show whether digitalization has reduced journey times, made bus arrivals more reliable, improved road safety, or encouraged greater use of public transport.

Capital Investment

Astana provides a larger-scale example. In February 2025, the capital signed a six-year, $190 million agreement with the UAE-based Presight AI. The project covers traffic management, public services and sensors.

Alatau City: Kazakhstan’s Largest Test

The most ambitious scheme is Alatau City, being developed between Almaty and the Kapshagai Reservoir. Unlike existing cities, Alatau is being designed from the outset with a separate legal and administrative framework and extensive digital management. The government intends it to become Kazakhstan’s first large-scale AI-driven city.

The project includes intelligent transport systems, automated infrastructure management, and the K Smart City, a district designed with South Korean partners.

Its investment portfolio comprises 53 projects worth about 2 trillion tenge, or $3.9 billion. They are expected to create 51,000 jobs, while parallel investment continues in transport links, engineering networks, and social infrastructure needed to support future growth. Alatau’s population is projected to grow from just over 60,000 to almost two million by 2050.

However, even the best laid plans do not always survive contact with reality.

The idea of building a new city outside Almaty has existed for decades. The G4 City concept was first presented in 2007 and formally launched in 2008. It envisaged four satellite districts between Almaty and Kapshagai, with separate business, education, industrial, and tourism functions, whilst also serving to ease congestion and housing pressure in Almaty.

Between 2008 and 2015, more than 31 billion tenge in public money was reportedly spent on engineering infrastructure for the first district, only for public funding shortages and weak private investment to subsequently bring much of the development to a halt. For years, the proposed city remained largely on paper before the project was revived and reorganized as Alatau.

That history should temper claims that a new legal regime or AI platform will by itself guarantee delivery. Alatau is already an existing city assembled from former villages and settlements, whose residents require basic services while the government plans its future districts.

The same report found that only seven people attended one presentation on the city’s development after the meeting was announced the previous evening. That experience sits uneasily beside the national smart-city methodology’s stated principles of transparency and citizen participation.

Technology as a Tool Rather Than a Result

Almaty’s inclusion in BCG’s index shows that Kazakhstan has established a credible digital foundation. Its place in the “emerging” group, and particularly its weak score for ways of working, shows that infrastructure and ambition have yet to be matched by equally strong institutions and measurable resident outcomes.

The new national methodology creates deadlines and a common system for assessing progress. It will be useful only when authorities publish the results openly, explain failures as well as successes, and allow residents to judge whether digital projects are solving the problems they encounter.

For Almaty, that might mean demonstrating that transport technology has made journeys faster and more reliable, while in Astana it could mean demonstrating that the $190 million platform produces measurable improvements in traffic management and public services sufficient to justify its cost.

Meanwhile in Alatau, the immediate priority is ensuring that existing communities have access to basic utilities and accessible public services, even as plans for an AI-managed metropolis take shape.

CPC Halts Oil Loadings Again After Two More Tankers Attacked Near Novorossiysk

The Caspian Pipeline Consortium has stopped oil loading at its Black Sea terminal near Novorossiysk after two more tankers were attacked early on July 30. The suspension came only three days after Kazakhstan resumed exports through the route following a week-long disruption. The Marshall Islands-flagged NISSOS SIFNOS was attacked at 1:48 a.m. Moscow time while loading Tengizchevroil crude at single-point mooring SPM-3, CPC said. A drone hit the cargo deck near the manifolds used to receive oil. The strike caused a fire, which the crew extinguished with help from three CPC support vessels. CPC said no employees or contractors were injured, no oil spill occurred, and the crew did not request medical assistance or evacuation. Okeanis Eco Tankers, the vessel’s owner, said NISSOS SIFNOS sustained only minor damage, its crew was safe, and no spill or pollution occurred. The company said the tanker was continuing its voyage operations. The tanker MARATHI was also attacked while awaiting a berth at the CPC terminal, about six nautical miles, or eleven kilometres, offshore. Dynacom Tankers, the vessel’s operator, said it was struck by two projectiles of unknown origin. The resulting fire was extinguished by the crew, all of whom were safe and accounted for. No pollution was reported. Dynacom said it had activated its emergency response plan and remained in contact with the crew and the relevant authorities. “Oil loading has been stopped, while pipeline facilities are operating normally,” CPC said. The consortium did not identify who carried out either attack. No party had claimed responsibility when the suspension was announced. Ukraine’s drone forces later said they had struck four Russian tankers in the Black and Azov seas overnight but did not identify the vessels or locations. The statement therefore did not establish responsibility for the attacks on NISSOS SIFNOS or MARATHI. CPC said appeals from Kazakhstan and its foreign shareholders had been ignored. It said some representations were made through the U.S. State Department. On July 23, the chair of the House Foreign Affairs Subcommittee on South and Central Asia, Bill Huizenga, told The Times of Central Asia that further strikes affecting CPC infrastructure would “not be tolerated.” CPC said attacks near loading equipment could cause a major fire and oil spill. The consortium also warned of damage to Kazakhstan and to shippers including Chevron, ExxonMobil, Eni, TotalEnergies, and Shell. On July 27, CPC had restarted tanker loadings and resumed accepting oil from Kazakhstan after storage constraints forced producers to cut output. The July 30 incidents bring the number of tankers struck near or while serving the CPC terminal during July to at least eight. The sequence began with the Chevron-chartered Yasa Polaris on July 7. Nordic Zenith was hit on July 17. ASIA and NISSOS IOS were attacked while loading Kazakh crude on July 19. NELSA was struck at SPM-1 on July 20, and HERA was reported damaged while approaching the terminal on July 23. The earlier attacks repeatedly stopped loadings. CPC then stopped accepting crude, and tankers scheduled to collect oil changed course. The blockage quickly reached Kazakhstan’s largest fields because producers had limited capacity to store crude that could no longer enter the pipeline. On July 22, Kazakhstan’s oil and gas condensate output fell by 21% to 1.63 million barrels per day, while production at Tengiz dropped by about 56%. Kazakhstan’s oil and gas condensate production fell to about one million barrels per day by July 26. That was less than half the June average of 2.16 million barrels per day. Tengiz, Kashagan, and Karachaganak all reduced output. Tengiz suffered the largest cuts because most of its crude depends on CPC. The 1,510-kilometre pipeline runs from western Kazakhstan through Russia to the Black Sea. It carries more than 80% of Kazakhstan’s oil exports and almost 2% of global supply. U.S. companies have large stakes in the route and the fields that feed it. Chevron owns 15% of CPC and 50% of Tengizchevroil, while ExxonMobil holds 7.5% of CPC and 25% of Tengizchevroil. Kazakhstan condemned the earlier attacks and said it reserved the right to seek compensation under international law. Kazakhstan’s Energy Ministry also confirmed the July 30 strikes but did not identify who carried them out. The renewed disruption came hours after U.S. Secretary of State Marco Rubio and Kazakhstan’s Foreign Minister Yermek Kosherbayev discussed the importance of the “reliable and uninterrupted” export of Kazakhstan-origin oil through CPC. Their July 29 call also covered energy security, critical minerals, trade, and investment. Also on July 30, Energy Minister Yerlan Akkenzhenov and U.S. Ambassador Julie Stufft discussed regional energy security, the reliable operation of export infrastructure, and stable supplies to global markets. The ministry did not explicitly link the meeting to the tanker attacks. CPC’s pipeline facilities remain operational, but normal flows depend on tankers loading crude at offshore moorings. If the suspension continues and terminal storage fills again, Kazakhstan’s producers would likely have to cut output only days after beginning to restore it.   Editor’s note, July 31, 2026: Chevron told The Times of Central Asia: “Chevron is aware of reports of an incident involving a vessel loading at Caspian Pipeline Consortium (CPC) facilities near Novorossiysk. The safety of personnel, the protection of the environment and integrity of assets are our top priorities. Further questions regarding CPC operations should be directed to CPC.”

Rubio and Kosherbayev Discuss CPC Ahead of Tokayev’s U.S. Visit

U.S. Secretary of State Marco Rubio held a telephone conversation with Kazakhstan’s Foreign Minister Yermek Kosherbayev on 29 July. The discussion focused on the situation surrounding the Caspian Pipeline Consortium, energy cooperation, critical minerals, trade and investment ties, and current international issues. According to the U.S. Department of State, Rubio and Kosherbayev discussed the importance of energy security, including the “reliable and uninterrupted” export of Kazakhstan-origin oil through the CPC system. Rubio also thanked Kazakhstan for supporting President Donald Trump’s peace initiatives and expressed interest in deepening bilateral economic cooperation. Kazakhstan’s Ministry of Foreign Affairs said the two ministers discussed in detail the situation surrounding the Caspian Pipeline Consortium, cooperation in the energy, transport and logistics sectors, supplies of critical minerals, efforts to attract U.S. investment, and coordination in international organisations. The ministry said the conversation also covered preparations for President Kassym-Jomart Tokayev’s forthcoming visit to the United States for the G20 summit. The telephone call took place shortly after Kazakhstan resumed crude oil exports through the CPC system. The pipeline carries the vast majority of crude exports from the Tengiz oilfield, whose largest shareholders include the U.S. companies Chevron and ExxonMobil. Kazakhstan’s Foreign Ministry said the two ministers reaffirmed their commitment to maintaining regular political dialogue. The conversation followed President Kassym-Jomart Tokayev’s meeting with U.S. Senator Steve Daines on 8 July, when the two sides discussed expanding trade and economic cooperation, attracting investment and strengthening cooperation in the energy sector. On 28 July, The Times of Central Asia reported that Kazakhstan had resumed oil exports through the CPC system after a week-long disruption at the consortium’s Black Sea marine terminal near Novorossiysk. The interruption more than halved oil production at Tengiz and again highlighted Kazakhstan’s dependence on its principal oil export route.

Wildberries Kazakhstan Sellers Count Losses After Ukraine Strikes

Over the past month, Ukrainian forces have carried out a series of strikes on the facilities of Russia's largest online marketplace, Wildberries. As with previous attacks on Russia's energy infrastructure, including that of the Caspian Pipeline Consortium (CPC), the consequences are again being felt by citizens and businesses in neighboring countries, highlighting the extent to which the war's economic effects now extend far beyond the battlefield. Since July 18, Ukrainian strikes have hit Wildberries logistics facilities in Moscow, St. Petersburg and Crimea, as well as in Tver and Tambov Oblasts. According to the Russian business daily Kommersant, the attacks damaged logistics facilities representing more than 10% of Wildberries’ total warehouse floor space, with a combined area exceeding 550,000 square meters. Alongside Wildberries, another major Russian marketplace, Ozon, also operates in Kazakhstan. Its logistics network has so far not been affected by similar attacks. Together, the two companies account for more than 85% of Kazakhstan’s cross-border online marketplace segment, according to data presented in June by Mazhilis deputy Aituar Koshmambetov during parliamentary discussions on the development of e-commerce. E-commerce has become one of Kazakhstan’s fastest-growing sectors, expanding roughly fivefold since 2020. The market was valued at $6.7 billion in 2025, and the government aims to increase that figure to $19.5 billion by 2029. Against that backdrop, Kazakh sellers were always likely to be affected sooner or later. On Tuesday, Kazakhstan’s National Chamber of Entrepreneurs, Atameken, said it had begun collecting information on Kazakh businesses affected by the attacks on Wildberries facilities in Russia. According to preliminary estimates by the Ecommerce-KZ Association, more than 100 member companies suffered losses as a result of fires at the marketplace’s logistics centers. Their combined losses exceed $2.1 million. Following an request from Atameken to Kazakhstan’s Ministry of Trade and Integration, the ministry has approached Russian authorities and the Wildberries for further information. For neighboring Kyrgyzstan, the situation surrounding Wildberries has proved even more painful. Compensation for lost goods is now being discussed at the level of the country’s economy minister, who is negotiating with the marketplace’s management. Much of Kyrgyzstan’s garment industry and trading sector now depend on Wildberries. According to the country’s association of garment manufacturers, individual producers have suffered losses ranging from 1 million to 100 million Kyrgyz soms, or approximately $11,400 to $1.14 million. While businesses in Russia, Kazakhstan, and Kyrgyzstan are counting their losses, Wildberries itself appears to be reconsidering its logistics strategy. According to a report in Kommersant, the company has begun searching for vacant warehouse space in Kazakhstan and is prepared to lease virtually all of the country’s available modern warehouse capacity. According to NF Group, only 5.8% of Kazakhstan's modern warehouse space was vacant at the end of 2025. Stanislav Akhmedzyanov, managing partner at IBC Global, said the Kazakh market has no single warehouse facility of 100,000 square meters, which is reportedly the amount of space Wildberries requires. As of the end of June 2026, only 130,000 square meters of warehouse space remained available across the country, scattered among different cities rather than concentrated in one location. Wildberries has nevertheless confirmed that it is carrying out a large-scale restructuring of its internal logistics network in an effort to protect its business operations from possible disruptions. Several projects in Kazakhstan are slated to be completed in the near future, including major logistics complexes in Almaty and Astana. The latter will reportedly become Wildberries’ largest logistics hub in Kazakhstan. Whether the disruption proves temporary or develops into a longer-term shift in regional logistics remains unclear. What is already evident, however, is that the war is imposing growing economic costs well beyond Russia and Ukraine. As cross-border supply chains become increasingly vulnerable to military strikes, businesses in Kazakhstan and Kyrgyzstan are discovering that their dependence on Russian logistics infrastructure carries risks over which they have little control. For Wildberries, the attacks may accelerate efforts to diversify its distribution network into neighboring countries. For Central Asian businesses, they serve as another reminder that the economic consequences of the war are no longer confined by national borders.

As Two Wars Reach the Caspian, Central Asia’s Middle Corridor Holds

On July 25, two wars met in waters that Central Asian governments had tried to keep apart. Ukraine reported successful long-range strikes in the Caspian Sea. President Volodymyr Zelenskyy said the targets included vessels involved in carrying military cargo from Iran and a warship. Tehran said an Iranian commercial vessel had been struck, killing one sailor and injuring another, and accused Kyiv of trying to widen the war. It remains unclear whether the vessel identified by Iran was among the targets described by Zelenskyy. Diplomacy produced a limited off-ramp. On July 28, Ukrainian Foreign Minister Andrii Sybiha told his Iranian counterpart, Abbas Araqchi, that the strike on the Iranian ship was unintended. Both governments said they wanted to avoid further escalation. The call reduced the immediate risk of retaliation, but it did not remove the new danger. The Caspian is now one of the places where Russia’s war against Ukraine and the war involving Iran, Israel, and the United States intersect. Central Asia is exposed through the infrastructure and trade routes linking them. A “Sea of Peace” Under Pressure Turkmenistan responded to the incident with unusually direct language. Its Foreign Ministry called attacks on vessels in the Caspian “inadmissible” and described the waterway as a “sea of peace, harmony and good-neighborliness.” Ashgabat did not name Ukraine or endorse Iran’s account. Its restraint was characteristic, but the public criticism was unusual. Turkmenistan’s permanent neutrality normally produces guarded statements during external conflicts. The intervention showed that Ashgabat viewed the attack as a challenge to the regional order. Turkmenistan faces Iran across a 1,148-kilometer land border and the southern Caspian. Turkmenbashi port is also central to its plans for a larger role in Eurasian trade. The principle is set out in the Convention on the Legal Status of the Caspian Sea, signed in Aktau in 2018. Its text calls for the peaceful use of the sea, prohibits the use or threat of force, and bars armed forces belonging to non-Caspian states. The convention has not entered into force because Iran has not ratified it. Its provisions were designed to govern relations among the five littoral states. They do not address a long-range strike carried out by a non-littoral state. But modern drones can cross distances that once provided strategic shelter. A landlocked sea can no longer be assumed to sit beyond the reach of surrounding wars. The Iran-Russia Link Ukraine has clear military reasons to look toward the Caspian. Iran has supplied Russia with drone technology used against Ukrainian cities and infrastructure. The sea also provides a direct commercial route between Iranian ports and Russia’s Volga region. Kyiv now treats vessels on that route carrying military cargo as part of Russia’s military logistics. Iran described the vessel struck on July 25 as civilian. The dispute over the ship’s cargo is central because commercial and military supply chains can overlap. A vessel may be civilian by flag and registration while carrying goods that Ukraine considers part of Russia’s war effort. That uncertainty reaches beyond Iran and Russia. Commercial vessels use the same ports and sea lanes as military-linked traffic. Insurers respond to perceived risk rather than diplomatic distinctions. Ashgabat has invested in new cargo vessels for the Middle Corridor. The July 25 strike did not interrupt freight on the route. Kazakhstan’s Main Oil Export Route Is Disrupted The clearest Central Asian disruption occurred on the Black Sea. Four tankers were struck near the Caspian Pipeline Consortium terminal at Novorossiysk between July 17 and 20, including two vessels loading Kazakh crude. Russia accused Ukraine of carrying out the strikes. Ukraine’s ambassador to Kazakhstan told The Times of Central Asia that there was “no evidence whatsoever” that Kyiv had carried out the attacks on July 17 and 19. Washington has raised the issue directly with Kyiv twice. In February, Ukraine’s ambassador to the United States disclosed that the State Department had delivered a formal démarche after a Ukrainian attack on Novorossiysk affected American and Kazakh economic interests. On July 21, The Wall Street Journal reported that the Trump administration had again urged Kyiv to avoid attacks on non-Russian vessels serving the terminal. Together, the two interventions draw a clear boundary around damage to American and Kazakh interests and attacks on non-Russian vessels serving CPC. On July 23, Representative Bill Huizenga, chair of the House Foreign Affairs Subcommittee on South and Central Asia, reinforced that position publicly. “Further strikes will not be tolerated,” he told The Times of Central Asia. In total, six tankers were struck near CPC during July. The disruption left terminal storage tanks full. Three industry sources said CPC had stopped accepting crude from Kazakhstan. Producers then reduced output to prevent crude from backing up through the pipeline system. By July 26, Kazakhstan’s oil and gas condensate production had fallen to about one million barrels per day, less than half the June average of 2.16 million barrels per day. Tengiz, the country’s largest oilfield, bore the heaviest initial cut. Its output fell by 56%, from a July average of 925,000 barrels per day to around 406,000. By July 26, an industry source said production at Tengiz, Kashagan, and Karachaganak was between 70% and 90% below June levels. Loading resumed on July 27, but the shutdown exposed the cost of Kazakhstan’s geographic dependence. The 1,510-kilometer CPC pipeline carries more than 80% of Kazakhstan’s oil exports. Despite its name, the pipeline does not cross the Caspian. It runs from western Kazakhstan through Russia to the Black Sea. The interruption strengthened the case for alternatives rather than showing that diversification had failed. The Middle Corridor remained operational, while Kazakhstan’s separate trans-Caspian oil route provided a limited outlet. The Middle Corridor Becomes More Important The July 25 strike introduced a new security concern around the Caspian leg of the Middle Corridor. Yet the alternatives carry greater immediate risks. Northern routes through Russia remain exposed to the war and sanctions-related or political disruption. Southern routes through Iran now face direct military danger, alongside sanctions and banking constraints. The route across the Caspian through Azerbaijan, Georgia, and Türkiye therefore remains Central Asia’s main established westbound alternative. Its maritime leg, however, can no longer be assumed to remain insulated from surrounding conflicts. Azerbaijan, the corridor’s western landing point, has already experienced direct spillover from the Iran conflict. In March, drones that Baku said were launched from Iranian territory struck the terminal at Nakhchivan International Airport and crashed near a school. Civilians were injured, while Iran denied responsibility. The incident did not interrupt the Middle Corridor, but it showed that the South Caucasus section is also exposed to regional escalation. The corridor is also becoming more capable. Freight volumes transported through Kazakhstan rose from 0.8 million to about 4.5 million metric tons over seven years. The 2026 plan targets 600 container trains from China, while Kazakhstan is also expanding its port and vessel capacity. An $846 million World Bank guarantee approved in February is intended to mobilize $1.41 billion in long-term financing for a major rail project on the Kazakh section. These investments will not remove border crossings or the need to transfer cargo between rail and ship, but they should gradually ease several of the corridor’s main bottlenecks. The route now has wider strategic value. Washington is seeking closer critical minerals partnerships with Central Asia through the C5+1 Critical Minerals Dialogue. Europe also has a direct interest in preserving access to Kazakh oil. Across 2025, Kazakhstan accounted for 12.7% of the value of EU imports of petroleum oils from outside the bloc, behind only the United States and Norway. The Middle Corridor cannot match the northern rail network at its current capacity. Kazakhstan’s separate trans-Caspian oil route also cannot replace CPC. Trans-Caspian oil shipments offer only limited relief, while the corridor’s immediate strength lies in containerized and industrial freight, including selected critical mineral supply chains. Its value comes from giving exporters another route. The Caspian strike makes the protection of civilian shipping and contingency planning more urgent. It also strengthens the case for expanding Central Asia’s main established westbound corridor that avoids both Russia and Iran. Washington wants resilient access to Central Asian minerals, while Europe relies on Kazakhstan as a major oil supplier. That redundancy has growing importance for global supply-chain security. Pressure from the North and South The war involving Iran has also complicated Central Asia’s southern outlets. Routes through Iran offer access to Persian Gulf ports and connections toward Türkiye, but U.S. strikes on Iranian rail and coastal infrastructure have made security concerns more concrete. Kazakhstan and Turkmenistan have invested in those routes for years. Uzbekistan also stands to benefit from reliable rail access through Iran. The conflict has not severed every southern connection, but it has made planning less predictable. Higher insurance costs and cautious banks can divert ordinary freight without a formal border closure. Russia’s war threatens the northern routes inherited from the Soviet period. Novorossiysk lies about 115 kilometers across the Black Sea from Russian-occupied Crimea. The tanker attacks show how quickly fighting can reach Kazakhstan’s exports, even when the cargo is Kazakh and commercially traded. The Middle Corridor has become more valuable as northern and southern routes face disruption. The July 25 strike did not make the corridor unworkable; it showed why governments must protect the commercial shipping and infrastructure on which it depends. The two wars have not formally merged. Kyiv and Tehran still have incentives to contain their confrontation. Central Asian governments also retain working relations with both sides. Repeated Ukrainian strikes on Iranian shipping could trigger direct retaliation. Another incident involving Azerbaijan could draw Baku and Türkiye more deeply into the Iran war. Neither outcome is inevitable. For Central Asia, the immediate lesson is not that diversification has failed. CPC restarted, the Middle Corridor remained open, and southern connections through Iran were not severed. A system with several imperfect routes is safer than overwhelming dependence on one. The Caspian no longer offers complete distance from surrounding wars, but it remains central to the solution. As two wars reach the sea, Central Asia needs more routes and stronger safeguards for commercial shipping.

Kazakhstan’s Mineral Future Still Carries an Oil Risk Premium

In June, President Kassym-Jomart Tokayev went to Brussels with a future-facing offer: Kazakhstan could become Europe’s non-Chinese option in critical minerals. Astana presented the country as a base for processing, long-term offtake, and industrial cooperation, rather than another source of ore. A month later, Kazakhstan’s older vulnerability reappeared. Drone attacks near the Caspian Pipeline Consortium terminal at Novorossiysk disrupted loadings and forced production cuts in Kazakhstan. By July 27, loading had resumed, with tankers receiving crude supplied by Tengizchevroil. The interruption was brief, but it exposed a structural problem. Kazakhstan’s future mineral offer still rests on an economy whose main export artery runs through Russia and the Black Sea. That is the central tension in Kazakhstan’s new resource diplomacy. Astana wants Europe to help build a future supply chain. Its present still depends on an oil corridor it does not fully control. Kazakhstan is asking Europe to make future demand bankable. A mineral deposit does not become part of a European supply chain when officials announce it in a joint statement. It needs geological confirmation, financing, processing technology, reliable power, water, logistics, and customers prepared to sign contracts years before the first shipment. This is why offtake sits at the heart of Tokayev’s proposal. Long-term purchase commitments can turn European concern over Chinese dominance into financeable projects. If Europe wants another source tomorrow, it must help fund extraction, processing, and internationally accepted standards today. Kazakhstan says it is ready to supply 21 of the 34 materials on the EU’s critical raw materials list. It also wants more of the value chain to remain at home. European capital and technology would support local processing, laboratories, skills, and higher-value production instead of simply moving raw materials abroad. Europe has good reason to listen. China dominates the processing of many minerals used in batteries, advanced manufacturing, digital infrastructure, and defence. European industry wants alternatives, but diversification cannot be improvised after a supply shock. Mines and processing plants take years to finance, permit, construct, and qualify. For Kazakhstan, the minerals offer is also an attempt to upgrade an older relationship. Western companies already know the country through Tengiz, Kashagan, and decades of oil investment. Astana now wants to move from extraction towards processing and a stronger position in industrial supply chains. But the old oil story still prices the new minerals story. The CPC episode showed why. The pipeline carries crude from Tengiz, Kashagan, and Karachaganak through Russian territory to Novorossiysk. It handles more than 80% of Kazakhstan’s oil exports and ties much of the country’s hard-currency income to a route outside Astana’s full control. A short halt was enough to cut output sharply at fields more than 1,500 kilometres away. Tokayev’s call in Omsk to freeze the war in Ukraine should be read partly in that context. It reflected more than the diplomatic caution expected from a neighbour of Russia. The war is now touching Kazakhstan’s export system through tanker security, insurance risk, production schedules, and investor confidence. Astana wants European finance for a new supply chain, while it still needs to protect the oil route that pays for the present. That does not make Kazakhstan powerless: the country has used its geography, resources, and multi-vector diplomacy to create room for manoeuvre. It works with Europe on minerals, China on transport, Russia on security, and Gulf states on infrastructure. Yet diplomatic flexibility cannot remove physical dependence on corridors. Kazakhstan does have advantages over many new mining jurisdictions. Central Asia inherited a Soviet geological and metallurgical base, including mapping, mining institutes, uranium expertise, skilled workers, and industrial towns built around extraction. That reduces the starting barrier for some projects. But the inheritance has limits. China’s position in rare earths did not come from geology alone. It grew through processing scale, coordinated industrial policy, downstream manufacturing, and dependable demand. Kazakhstan has parts of that foundation, but not yet the industrial system needed to compete across the full chain. Water and power are the first practical constraints. Processing can require crushing, chemical treatment, tailings management, and wastewater control. New plants will also need reliable electricity and stronger grids. In a water-stressed country with rising power demand, each project must show where those resources will come from. Processing capacity and governance pose the next challenge. Kazakhstan has deep mining experience, but some minerals still leave the region in lower-value form for refining elsewhere. European investors will also require environmental controls, safe tailings management, labour standards, sanctions compliance, and transparent reporting. Those requirements raise costs, but they also determine whether Europe can defend the supply chain politically. Geography remains the final constraint. Kazakhstan is landlocked, so every export plan depends on railways, ports, customs systems, and neighbouring states. The Middle Corridor can reduce reliance on Russia by moving cargo across the Caspian and the South Caucasus, but it still needs greater capacity, predictable schedules, and commercially reliable delivery terms. Europe should therefore stop treating mineral memoranda as diversification in themselves. Brussels and European industry should select viable Kazakh projects and support them with binding offtake, finance, technology, accredited testing, and transport investment. Kazakhstan must match that commitment with credible water plans, grid capacity, transparent licensing, enforceable environmental rules, and dependable export arrangements. Neither side needs to pretend that Kazakhstan already offers insulation from China or geopolitical risk. It offers the possibility of a second supply chain, built with a partner that has resources, industrial experience, and a record of managing large Western investments. The CPC disruption did not invalidate Kazakhstan’s mineral strategy. It revealed the terms on which it can succeed. Europe will have to invest before the minerals are ready, and Kazakhstan will have to reduce the infrastructure and governance risks that shape every long-term contract. Oil still finances Kazakhstan’s present. Critical minerals may shape its future. The real bargain is whether Europe will help build that future before the next supply shock makes the need unavoidable.   The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publication, its affiliates, or any other organizations mentioned.

U.S. Imposes 12.5% Tariff on Kazakhstan Over Third-Country Import Controls

Kazakhstan is the only Central Asian economy included in a new U.S. tariff action covering 60 trading partners. An additional tariff of 12.5% has been imposed on a range of Kazakh goods, excluding products listed in the annexes to the final decision. The rate applies to goods entered for consumption in the United States from July 24, 2026. Kazakhstan’s Ministry of Trade and Integration said about 95% of the country’s exports to the United States would remain outside the measure because of the exemptions. It also said the new tariff replaces an expired temporary 10% surcharge and will not be added to it. Kazakhstan already prohibits forced labor in domestic employment under Article 7 of its Labor Code. The Office of the U.S. Trade Representative (USTR) did not allege that Kazakh exporters use forced labor. Its finding concerned a separate gap: Kazakhstan lacks a customs prohibition capable of excluding foreign goods produced wholly or partly with forced labor. The investigation was launched in March under Section 301 of the Trade Act of 1974, a mechanism that allows Washington to respond to foreign practices it considers discriminatory or restrictive to U.S. commerce. In June, USTR concluded that the policies of all 60 economies under review warranted action. The final decision followed more than 1,600 written comments and testimony from over 100 witnesses. Most of the economies were divided into two rate groups, while the European Union, Taiwan, Japan, South Korea, and Switzerland received special treatment linked to existing most-favored-nation tariffs. This was not a Kazakhstan-specific finding. USTR identified the same deficiency in 53 other economies, including Australia, Japan, Norway, Singapore, and South Korea. Together, the 60 economies under investigation accounted for 99.4% of U.S. imports. A 10% tariff was imposed on countries that had introduced at least a partial ban on imports associated with forced labor or made corresponding commitments to Washington. Kazakhstan was placed in the 12.5% category alongside Australia, Israel, New Zealand, Norway, Singapore, the United Arab Emirates, and several other U.S. trading partners, as well as China and Russia. The immediate cost to Kazakhstan will depend largely on the scope of the exemptions. Washington exempted raw materials where tariffs could leave the U.S. market without sufficient domestic supply, products whose higher cost could cause wider economic disruption, and goods that the United States cannot produce in sufficient quantities or obtain elsewhere. The 12.5% rate therefore does not mean that all Kazakh exports will become more expensive in the American market. The structure of bilateral trade further limits the likely damage. Kazakhstan’s exports to the United States are concentrated in commodities, particularly oil, uranium, metals, and semi-processed materials. Many serve U.S. energy and industrial needs. The Kazakh government’s estimate that about 95% of exports remain exempt indicates that the largest trade flows should avoid the additional tariff, although the U.S. notice does not provide a Kazakhstan-specific calculation. According to U.S. figures, goods trade between the two countries reached $5 billion in 2025. U.S. imports from Kazakhstan rose by 73% to $4.1 billion, while American exports to Kazakhstan fell to $985 million. The U.S. goods trade deficit with Kazakhstan consequently widened to $3.1 billion. Even so, the decision creates a new political and legal problem for Astana. Legislation prohibiting imports linked to forced labor is no longer simply an issue of international reputation; it has become a condition for avoiding the additional tariff on non-exempt goods. The White House has authorized USTR to modify or terminate tariffs and exemptions for individual economies. In that sense, the tariff is primarily a lever. Washington is extending its own product-origin requirements beyond the U.S. customs border and demanding that trading partners apply comparable restrictions in their domestic markets. A country may not use forced labor within its own economy and may still be penalized for failing to control imports from third countries. The issue is particularly sensitive because China and Russia, Kazakhstan’s two largest individual trading partners, are also covered by the U.S. measures. Tighter controls would require scrutiny of finished products and of raw materials or components moving through complex Eurasian supply chains. The tariff is unlikely on its own to reshape Kazakhstan’s foreign trade. The U.S. accounts for a smaller share of the country’s trade than the EU, China, or Russia, while most Kazakh exports to the American market remain exempt. The broader effect will be continued pressure on Astana to align its import controls more closely with the U.S. system while preserving trade with its two largest neighbors. The new measure took effect as the temporary 10% U.S. import surcharge expired on July 24. That surcharge had been introduced in February under Section 122 of the Trade Act and was limited to 150 days. Its replacement with Section 301 duties marks a shift from a broadly applied levy toward targeted measures tied to the domestic policies of selected trading partners. William Reinsch, a senior adviser at the Center for Strategic and International Studies, argued that the Section 301 investigation should not be viewed solely as a response to goods produced with forced labor. It also gave the Trump administration a new statutory basis for maintaining part of its tariff policy after the U.S. Supreme Court ruled that emergency economic powers did not authorize the president to impose tariffs. The 95% estimate resembles one issued by Kazakhstan during a separate U.S. tariff dispute in July 2025. The ministry then said exemptions covered oil, uranium, silver, ferroalloys, tantalum, and titanium. That statement concerned the earlier tariff plan rather than the new Section 301 action, but it shows how Kazakhstan’s commodity-heavy export structure reduced its exposure to broad U.S. duties. The latest measure therefore follows two distinct U.S. tariff episodes affecting Kazakhstan. A reciprocal tariff dispute began in 2025, followed by the temporary global surcharge introduced in February 2026. The new decision uses a more specific legal route and ties the treatment of non-exempt goods directly to whether trading partners prohibit imports associated with forced labor. As previously reported by The Times of Central Asia, Washington has continued to expand cooperation with Kazakhstan in critical minerals and transport infrastructure despite introducing new tariffs. The contrast is sharpened by renewed efforts in Congress to remove Kazakhstan from the Cold War-era Jackson-Vanik amendment and grant it permanent normal trade relations. The amendment has little direct effect on current trade because Kazakhstan receives conditional normal trade treatment, but its continued application remains a political anomaly. Strategic engagement and tighter trade controls are developing in parallel. For Astana, the immediate economic effect may remain limited, but pressure to revise its import rules is likely to persist.