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Oil Production

Kazakhstan May Miss Record Oil Output Target in 2026 Amid Infrastructure Disruptions

Kazakhstan’s oil production could decline by 2-4 million tons by the end of 2026 following disruptions linked to attacks on the infrastructure of the Caspian Pipeline Consortium (CPC) and fires at the country’s largest oil field, Tengiz. This was stated by Energy Minister Yerlan Akkenzhenov in response to journalists’ questions. In 2025, Kazakhstan produced more than 99.5 million tons of oil, exceeding the initial forecast of 96.2 million tons. Output for 2026 had originally been projected at 100.5 million tons, a potential record for the country. However, the minister indicated that actual production is now likely to fall short of this target. “According to the economic development plan, oil production in 2026 was expected to reach 100.5 million tons. However, due to events at the end of last year and the beginning of this year, attacks on CPC infrastructure and fires at Tengiz, production is likely to be in the range of 96-98 million tons,” Akkenzhenov said. Earlier reports suggested that Kazakhstan had been forced to urgently revise its oil export routes following drone attacks on CPC facilities. In January two fires broke out at electric generators at the Tengiz field. Although the incidents were quickly contained, they caused power outages and temporarily reduced production by nearly 20%. According to the minister, production at Tengiz had been fully restored by early March. “Tengiz has returned to a production level of 120,000 tons per day. A commission is currently finalising its investigation into the causes of the fire, and the results will be announced shortly,” Akkenzhenov said. Akkenzhenov also noted that global oil markets remain volatile amid ongoing tensions in the Middle East. He said that oil prices had recently peaked at $119 per barrel before declining to around $87. “Prices fluctuate daily. At the same time, attacks on oil infrastructure in Persian Gulf countries continue, reducing physical supply and keeping prices relatively high,” he said. Akkenzhenov added that rising global oil prices have not yet significantly affected domestic gasoline prices in Kazakhstan. According to the minister, future price dynamics will largely depend on developments in the Middle East. Military escalation in the region, including hostilities involving Iran that began in late February 2026, has already affected global energy markets and may continue to influence oil prices and supply stability.

Oil Production

Oil Eclipse: Power Cuts Expose Fragility of Western Kazakhstan’s CPC-Linked Energy System

Production at the Tengiz oil field in Kazakhstan is set to resume, according to the Ministry of Energy, which has been monitoring the situation since January 18. The restart does not, however, represent a full return to pre-shutdown production levels. While the disruption had no immediate impact on global oil prices, which continued to decline at the time of the outage, it triggered widespread electricity restrictions across western Kazakhstan. On January 21, Brent crude futures fell by 79 cents (1.22%) to $64.13 per barrel, while West Texas Intermediate dropped by 64 cents (1.06%) to $59.72 per barrel, Reuters reported. By then, production at Tengiz had already been suspended for three days, with sources indicating that the downtime would continue for another seven to ten days. From January 20, local authorities in Atyrau and Mangistau regions reported systemic electricity supply restrictions, including altered street-lighting schedules in Atyrau to conserve power, amid reduced gas deliveries to regional generators. The Ministry of Energy did not publicly respond to this until January 22, when, in a statement, it confirmed that gas turbine units at Tengiz were shut down on January 18. At the direction of Minister Erlan Akkenzhenov, his deputy was dispatched to oversee the situation on the ground. A special commission was established to investigate the incident, including representatives from the State Energy Supervision and Control Committee, the Atyrau Region Akimat’s Energy Department, KEGOC JSC, and Tengizchevroil LLP. No official explanation for the shutdown has yet been provided. However, some Kazakh energy experts have publicly speculated about a possible link to recent Ukrainian drone attacks on the infrastructure of the Caspian Pipeline Consortium (CPC), which plays a vital role in exporting Kazakh oil. Oil and gas analyst Olzhas Baidildinov drew a connection between the attacks and cascading effects on domestic energy supply: “They hit the CPC; exports declined, followed by oil production. Gas production declined along with oil. Gas is essential for electricity generation in western Kazakhstan,” he said. Baidildinov added that imported gas and electricity from Russia helped prevent more severe outages, though the energy crunch underscores longstanding vulnerabilities in Kazakhstan’s infrastructure. Baidildinov also referred to recent criticism from President Kassym-Jomart Tokayev, who at the 5th session of the National Kurultai voiced dissatisfaction with the energy sector, signaling potential personnel changes. On January 26, the Ministry of Energy announced that production at Tengiz would restart “in the near future,” and, at 4 a.m., the second-generation plant resumed operations, initiating raw material flows from the Royal field. “The current flow to the ZVP is 2,500 tons per day. Specialists are systematically increasing the supply of multiphase flow (oil and gas) to reach design capacity. At Tengiz, all technical and human resources have been mobilized to inspect energy facilities and power distribution systems,” the ministry stated. Officials emphasized that restoration efforts are under constant oversight. “TCO remains committed to ensuring reliable production and will increase volumes in stages, as infrastructure readiness and safety have been confirmed.” While the ministry has yet to publicly acknowledge...

Iran

The Trump Factor: Why Central Asia Has Remained Silent on Iran’s Protests

The wave of protests that erupted in Iran in late December and spread to at least 27 of the country’s 31 provinces has become the largest since 2022, when mass demonstrations followed the death of 22-year-old Mahsa Amini in the custody of Iran’s morality police. The unrest has raised new concerns across the region about political stability, energy markets, and the risk of external intervention. Rights monitors say protests have been reported in hundreds of locations nationwide, with death and detention tolls still contested. Human rights groups and independent monitoring organizations estimate that dozens of people have been killed and more than 2,000 detained, while Iranian officials have offered varying accounts and blamed violence on what they describe as “rioters.” In Kazakhstan, observers are drawing comparisons to the country’s own January 2022 unrest, officially labeled an attempted coup that ended in a violent crackdown. But beyond the parallels with Kazakhstan’s ‘Qantar’ events, analysts are focusing on the wider implications, particularly the potential impact of Iran’s domestic turmoil on global oil markets. For Kazakhstan, the stakes are heightened by the country’s reliance on hydrocarbon exports and the sensitivity of global energy markets to supply shocks. Any sharp change in Iranian output, even if temporary, could place downward pressure on prices and complicate budget planning for oil-dependent economies across Central Asia. Kazakh financial analyst Rasul Rysmambetov has voiced concern that unrest in Iran could trigger a surge in oil production aimed at funding social spending, a move that could drive down global oil prices and harm Kazakhstan’s oil-dependent economy. “Iran could add half a million barrels a day within six months and cause oil prices to collapse, but it would not do so casually. The Middle East is very sensitive and knows how to negotiate. Still, if the protests persist, Tehran might ramp up production to finance social needs. [This would be] painful for Kazakhstan. If Venezuela is a bear cub, then Iran is a grizzly bear in the bushes with its oil,” Rysmambetov warned on his Telegram channel. While political unrest typically raises oil prices by increasing supply risk, analysts note that Iran’s response could be atypical. Faced with fiscal pressure, Tehran may opt to increase production to stabilize revenues, a move that would push prices lower despite heightened instability. Iran’s chronic social issues, exacerbated by inflation and the collapse of the national currency, have fueled public discontent for more than a decade. While the Iranian authorities acknowledge the severity of the economic crisis and have conceded that some demands are legitimate, they have also warned of further hardships. On January 5, the judiciary announced that no leniency would be shown toward those detained during the protests. Russian experts, meanwhile, have framed the unrest in geopolitical terms. Irina Fedorova of the Russian Academy of Sciences’ Institute of Oriental Studies cited renewed sanctions, critical shortages of water and electricity, and foreign interference as the root causes. However, she dismissed the likelihood of regime change, pointing to disunity among opposition factions. “The difference...

Oil Production

Kazakhstan Oil Output Projected to Reach 100 Million Tons Annually

Kazakhstan is projected to reach an annual oil production level of 100 million tons in the coming years and sustain that output over the long term, according to Askat Khasenov, Chairman of the Board of the national oil and gas company KazMunayGas (KMG). The Ministry of Energy initially forecast oil production at 96.2 million tons for 2025, later adjusting the estimate to 96 million tons. In 2024, Kazakhstan produced 87 million tons of oil, with growth driven by the Tengiz expansion and the development of the Karachaganak and Kashagan projects in western Kazakhstan and the Caspian shelf. In November 2024, the ministry announced plans to surpass 100 million tons annually starting in 2026. KMG believes this level can be maintained for the foreseeable future. “The government officially plans to produce more than 100 million tons of oil per year, and I believe this plateau will last for a long time. New geological projects will allow us to maintain this level in the long term,” Khasenov said during Kazakhstan Energy Week 2025 in Astana. “Our company is actively developing exploration under a strategy focused on the sustainable replenishment of the country’s mineral resource base. Currently, KMG’s portfolio includes 13 exploration projects, implemented both independently and in partnership with international companies such as Eni, Lukoil, CNOOC, Sinopec, and Tatneft. Our goal is to achieve an increase in reserves of up to 200 million tons of oil in the short term.” Khasenov also noted that KMG is conducting geological studies in underexplored regions of Kazakhstan, with eight new projects already initiated. The overall potential of ongoing exploration is estimated at 800 million tons of oil equivalent. In parallel, the company is applying enhanced oil recovery techniques to sustain production at mature fields. Another strategic priority for KMG is oil refining. The company aims to fully meet domestic demand for gasoline, diesel, and other fuels while expanding its petrochemical footprint to produce polymers and carbamide, boosting Kazakhstan’s non-resource exports. Temirlan Urkumbaev, Director of the Department of Petrochemistry and Technical Regulation at the Ministry of Energy, emphasized that petrochemicals are becoming a cornerstone of economic diversification. “Petrochemistry is not just about new sources of revenue. It brings new jobs, export income, and sustainable development. For Kazakhstan, the transition from a raw-material model to deep processing is a strategic necessity,” Urkumbaev said. The ministry has developed a 2024-2030 Roadmap for the petrochemical industry, which includes six major projects worth approximately $15 billion and expected to create more than 19,000 jobs. Among these is a polyethylene plant with an annual capacity of 1.25 million tons, scheduled to begin operations in 2029. The facility will produce over 20 grades of polyethylene, including premium types, and is projected to account for around 1% of the global market. Other planned projects include the production of butadiene, carbamide, and alkylate. In 2022, Kazakhstan launched one of the world’s largest polypropylene plants KPI Inc. with an annual capacity of 500,000 tons. As previously reported by The Times of Central Asia, the Kazakh...

Fuel Exports

Kazakhstan Plans to Export Up to a Third of Its Fuel Production by 2040

The government of Kazakhstan has approved a long-term development strategy for the oil refining industry for the period 2025-2040, significantly increasing its forecast for petroleum product exports. The new plan triples previous export projections, aiming for exports to account for 30% of total production by 2040. According to the strategy, key priorities include expanding refining capacity and boosting exports to China, India, and neighboring Central Asian countries. By comparison, in May 2024, the Ministry of Energy had presented a separate draft strategy looking toward 2050, which proposed limiting fuel exports to 10%, and only in cases where domestic supply exceeded demand. Refinery Modernization and Capacity Goals The new strategy builds on recent progress. Following the modernization of Kazakhstan’s three largest refineries, Atyrau, Pavlodar, and Shymkent, total oil processing capacity reached 17 million tons per year. The plan envisions boosting this figure to 39 million tons annually by 2040. “The refining depth has already reached 89%, and the motor fuel produced now meets Euro-4 standards and higher. These improvements have allowed us to meet 90-95% of domestic demand and created favorable conditions for the export of high value-added products,” the Ministry of Energy stated. The strategy calls for expanding existing facilities and constructing a new petrochemical complex to raise refining depth to 94%. This will ensure full domestic fuel coverage amid projected annual demand growth of 1.5-2%, driven by urbanization and industrial development. A major focus will be the advancement of Kazakhstan’s oil and gas chemical industry, including the production of polymers, fertilizers, and other high-value products. Up to $5 billion is expected to be invested in this sector. “The strategy is designed to attract foreign investment, particularly given the country’s reserves of 30 billion barrels of oil. In the context of the global energy transition, this will position Kazakhstan as a regional leader in hydrocarbon processing and enhance economic resilience to global commodity price fluctuations,” the ministry emphasized. Implementation is scheduled to begin in 2025 with pilot projects for refinery digitization. Current Production and Export Landscape In 2024, Kazakhstan’s refineries produced 13 million tons of petroleum products, 1% more than in 2023, according to national oil and gas company KazMunayGas. This included 4.3 million tons each of gasoline and other fuels, and 4.4 million tons of diesel. Kazakhstan also imported 1.2 million tons of fuel from Russia. Prior to the reintroduction of export restrictions in 2024, the country exported 13,500 tons of motor fuel. Similar bans were in place in 2021, 2023, and 2024, meaning Kazakhstan’s fuel exports effectively occurred only in 2020 (nearly 120,000 tons) and 2022 (1,800 tons). As previously reported by The Times of Central Asia, Kazakhstan is planning to invest $15 billion in its oil and gas chemical sector as part of six major projects aimed at strengthening downstream capacity and export potential.

OPEC

Kazakhstan Reaffirms OPEC+ Commitment While Seeking to Renegotiate Investor Contracts

Kazakhstan has confirmed it will remain a part of the OPEC+ agreement on oil production cuts, despite persistently exceeding its allocated quotas. Prime Minister Olzhas Bektenov made the announcement at a press conference on Tuesday, while also revealing that the government is initiating negotiations to revise production sharing agreements (PSAs) with foreign investors operating in the country’s largest oil and gas fields. The OPEC+ agreement, an alliance between OPEC members and non-OPEC oil-producing countries, including Kazakhstan, aims to coordinate output to stabilize global energy markets. Under the current deal, signed in December 2023, member states voluntarily committed to cutting combined oil production by 2.17 million barrels per day through the end of 2026. However, Kazakhstan has consistently exceeded its quota in recent months. According to the Ministry of Energy, oil exports in June 2025 reached 1.86 million barrels per day, 80,000 more than in May and nearly 500,000 barrels above the country’s voluntary limit. The surge is primarily attributed to the expansion of the Tengiz oil field, one of Kazakhstan’s largest energy projects. The $49 billion Future Growth Project is already operational and is expected to boost annual output by 12 million tons, or roughly 260,000 barrels per day, an increase of nearly 40%. Acknowledging the challenges of meeting OPEC+ targets, Bektenov emphasized Kazakhstan’s continued commitment to the deal: “We are not considering withdrawing from the OPEC+ agreement, as we believe it is useful and contributes to stability in the oil market,” Bektenov stated. “We will strive to fulfill our obligations, but with national interests in mind.” At the same time, Bektenov underscored the government’s limited control over production levels at key fields such as Tengiz, Karachaganak, and Kashagan, where foreign investors hold substantial stakes. “We cannot demand that our partners reduce production, as they have made significant investments and are counting on a return,” he said. To address this issue, Kazakhstan has begun discussions with investors to revise existing PSAs, aiming to secure a greater share of national revenues from energy production. “There is a view that the country’s interests are not fully reflected in the existing agreements. We are starting a dialogue on new agreements for a new period,” Bektenov said. “At the same time, we will act carefully to maintain the investment climate.” This dual strategy, upholding international commitments while seeking more favorable terms, illustrates Kazakhstan’s intent to balance global cooperation with national economic priorities. PSAs for the country’s three main oil fields are due to expire in the coming decades: Tengiz in 2033, Karachaganak in 2037, and Kashagan in 2041. Together, these fields account for approximately two-thirds of Kazakhstan’s total oil output, 67 million out of 90 million tons annually. As previously reported by The Times of Central Asia, President Kassym-Jomart Tokayev instructed the government in January to begin seeking revisions to the PSA terms well ahead of their expiration.