Why Attacks on the Caspian Pipeline Consortium Could Alter Kazakhstan’s Strategic Plans
Attacks on the infrastructure of the Caspian Pipeline Consortium (CPC), reduced export flows, and volatility in commodity markets are generating serious pressures for Kazakhstan. In the coming years, both the country’s financial system and its domestic political balance may face significant tests. A number of experts warn that disruptions in oil logistics via the CPC, which remains the main artery for Kazakh crude exports, could depress budget revenues, strain national companies, and worsen the sovereign outlook. Kazakhstan pumps roughly 80% of its oil exports through the CPC system, and oil revenues account for more than half of the country’s total export earnings. Because CPC Blend is Kazakhstan’s primary export-grade crude, even short interruptions can reverberate through the state budget, the National Fund, and the balance sheets of national companies. This could trigger a domino effect, destabilizing broad swathes of the economy and undermining public finances. Already, the recent rounds of disruption around Black Sea oil shipping are eroding a substantial source of tax revenue for the state. Continued Risk of Strikes Political scientist Dosym Satpaev argues that Kazakhstan may be underestimating the intensity and persistence of the conflict surrounding Ukraine. He contends that both sides in that conflict have used strikes on energy infrastructure as key tools, a tactic that will likely continue. The recent strike targeted the CPC’s single-point moorings (SPMs) at Novorossiysk, a coastal terminal on the Russian Black Sea. These offshore loading points sit in relatively shallow waters and are physically exposed, making them susceptible to the naval drones Ukraine has increasingly deployed against Russian maritime infrastructure. Although the attack officially targeted Russian facilities, the collateral implications for Kazakh oil exports were immediate. According to Satpaev, that means further risks for the CPC. The fact that Kazakhstan remains heavily dependent on this single pipeline reflects a broader failure to diversify exports and reduce reliance on raw material transit. The vulnerability is magnified by the CPC’s ownership structure: although Kazakhstan relies on it for most of its exports, the pipeline network and the Novorossiysk terminal lie on Russian territory and operate under Russian regulatory oversight. Russia holds a majority stake in the consortium, while U.S. firms such as Chevron and Exxon also have significant shares, creating a complex web of interests that limits Astana’s room for manoeuvre. Kazakhstan has already experienced how this dependence can be leveraged. In 2022, Russian regulators repeatedly halted CPC operations over alleged “environmental violations,” moves widely interpreted as political pressure at a moment of diplomatic friction. That precedent underscores how strategic vulnerability to CPC disruptions predates the current wave of attacks. Satpaev is skeptical that alternative export routes, such as via pipelines through the Caspian Sea to Baku-Tbilisi-Ceyhan or transit to China, can substitute for the CPC in the near term. Given the global trend toward reduced oil demand, he believes this leaves Kazakhstan exposed to long-term structural risks. At the same time, Satpaev views as unlikely the possibility that Ukraine would attempt to directly stop the CPC’s operations, given the broader consequences such...
