Russia’s economy has faced renewed pressure following a fresh round of sanctions imposed this past week by both the European Union and the United States. After abruptly canceling a planned meeting with Vladimir Putin in Budapest, President Donald Trump shifted to a more hardline stance, announcing new sanctions. While these sanctions may not cripple Moscow, they are already having secondary effects on Central Asia, particularly on Kazakhstan’s banking and energy sectors.

The EU’s 19th sanctions package, adopted on October 22, introduces a phased ban on Russian liquefied natural gas (LNG). According to Reuters, short-term contracts will be terminated within six months, while long-term contracts are to expire by January 1, 2027. The package also includes a total ban on transactions with Russian oil giants Rosneft and Gazprom Neft, an expanded blacklist of so-called “shadow fleet” vessels, and sanctions against 45 companies in Russia and third countries supplying military-related technologies.

Of growing concern in Central Asia is the inclusion of several regional financial institutions in the EU’s sanctions list. These include the Kazakh branch of Russia’s VTB Bank, Kyrgyz banks Tolubai and Eurasian Savings Bank, and Tajik banks Dushanbe City Bank, Kommertsbank of Tajikistan, and Spitamen. These restrictions are scheduled to take effect between November and December 2025.

Both Kyrgyzstan’s President Sadyr Japarov and the nation’s Foreign Ministry have publicly expressed dismay over the sanctions, with Japarov urging Western leaders to stop “politicizing the economy.” In his speech at the UN General Assembly in New York in September, Japarov criticized the impact of unilateral sanctions, while the Foreign Ministry has stated that the country adheres to its international obligations and maintains an open dialogue with the EU to prevent risks associated with possible sanctions circumvention. The ministry has proposed launching an independent, internationally recognized audit and forming a joint “Kyrgyzstan-European Union” technical working group to facilitate data exchange, transaction monitoring, and risk assessments.

In Kazakhstan, the National Bank downplayed the impact of sanctions against VTB. Deputy Chairman Yerulan Zhamaubayev noted that the bank had already been under nominal restrictions, and handles few transactions.

“VTB does not affect the country’s financial stability, and we do not expect serious risks for the economy,” Zhamaubayev stated.

However, the latest U.S. sanctions may prove more consequential for Kazakhstan, particularly amid efforts to strengthen bilateral trade with the United States, including through the repeal of the Jackson-Vanik amendment.

The U.S. Treasury Department has sanctioned Russian oil majors Rosneft and Lukoil. The latter has deep economic ties with Kazakhstan. Just days before the announcement, on October 14, President Kassym-Jomart Tokayev personally attended the 30th anniversary of Lukoil’s operations in Kazakhstan, awarding CEO Vagit Alekperov the Order of Barys, first class.

Oil and gas journalist Oleg Chervinsky reported that the joint venture Kalamkas-Khazar Operating LLP, co-owned by Lukoil and KazMunayGas, is directly affected. “Only the Tengiz and CPC projects, which Lukoil operates with American partners, have been exempted from the sanctions,” Chervinsky noted. A final investment decision for Kalamkas-Khazar was expected in December 2025.

Yerkanat Abeni, a member of the Kazakhstan Association of Minority Shareholders, listed additional Lukoil-affiliated entities potentially impacted by the sanctions. These include LUKOIL Apstrim Kazakhstan (a local operator), LUKOIL Overseas, LUKARCO, and LUKOIL Overseas Karachaganak BV, all of which participate in major Kazakh energy projects.

These sanctions could, therefore, have a substantial effect on Kazakhstan’s energy sector. Some regional experts have argued that the sanctions’ immediate impact on Kazakhstan may be limited, while others have highlighted the country’s broader challenge of balancing Russian ties with Western and regional partnerships to ensure long-term resilience. For now, official responses remain muted, but as uncertainty grows, public confidence in reassurances that the situation is under control may begin to erode.

A previous version of this story, since corrected, misrepresented Commerzbank as Kommertsbank (of Tajikistan). Commerzbank of Germany is in no way implicated under any sanctions regime.