Sanctions - The Times Of Central Asia

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fuel shortages

Kazakh Refinery Plans Fuel Exports to Russia Amid Petrol Shortages

A small refinery in western Kazakhstan is preparing to process Russian crude and send most of the resulting petrol and diesel back to Russia as Moscow struggles with fuel shortages. The arrangement was confirmed on August 25, the same day that separate incidents occurred at two of Kazakhstan’s three major refineries. On August 19, Russian Deputy Prime Minister Alexander Novak said that, given the situation on the fuel market, the government was “keeping its finger on the pulse” and monitoring supplies daily with companies and regional authorities. According to Novak, Russia had already imposed export restrictions and begun importing petroleum products. Several refineries were also expected to return from repairs, increasing domestic supplies. Russia’s Fuel Shortage The pressure on Russia’s fuel market is illustrated by data published by the industry portal InfoTEK. According to its August 24 snapshot, AI-95 petrol, the widely used 95-octane grade, was available at only 5,620 of Russia’s 26,098 operating filling stations, or 22%. Even in Moscow, it could be found at 161 of 786 operating stations, about 20%. Russia has also temporarily relaxed restrictions on lower environmental grades of fuel, including Euro 4, Euro 3 and Euro 2, known in the Russian classification as K4, K3 and K2. Since 2016, only fuel meeting at least the Euro 5 standard had generally been permitted. Russian economist Boris Grozovsky estimates that, given the refining capacity knocked out by Ukrainian strikes and the number of plants undergoing repairs, Russia is currently short of roughly one-third of the petrol needed at peak demand. August is traditionally a high-demand month because of summer travel and agricultural work. “If it were November now, the situation would be a little easier for the Russian government. Russia is trying to bring in petrol from India, Morocco, Turkey, Kazakhstan and Azerbaijan, but imports also have limitations. The petrol brought in from India turned out to be too expensive,” Grozovsky said. Kazakh Refinery Steps In Speaking at a government briefing on August 25, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said that the small Condensat refinery in Aksai, West Kazakhstan Region, would process Russian crude, with around 70% of the petrol and diesel it produces sent to Russia. Up to 30% will remain on the Kazakh market, while the refinery also retains the right to export products outside the Eurasian Economic Union. “Under the agreement we currently have, up to 30% of the petroleum products in demand, petrol and diesel, will remain in Kazakhstan, while the rest will be shipped to the Russian Federation,” the minister told reporters. Akkenzhenov said the arrangement reflected Condensat’s location close to the Russian border. The refinery is not connected by pipeline to either country’s main oil network, meaning both crude deliveries and fuel exports depend on rail capacity. Akkenzhenov also stressed that the refinery’s owner is not under sanctions and said the Energy Ministry did not see sanctions risks for the project. He said the arrangement would also bring investment and preserve jobs at a refinery that has struggled financially. Condensat’s Financial Troubles Condensat was established in...

Sanctions

Kyrgyzstan Sanctions Risks Reshape Business

Kyrgyzstan is stepping up action against companies that could expose its banks and wider economy to Western sanctions. On August 18, the authorities moved to forcibly liquidate another 19 legal entities, while major banks are closing the accounts of dozens of clients deemed too risky. Bishkek has not formally joined Western sanctions against Russia, but those restrictions are increasingly determining whom Kyrgyz businesses can work with and which banks they can use to move money. The names of the 19 companies have not yet been disclosed. The authorities stated that they were selected after reviewing around 40 organizations considered to pose heightened sanctions risks. This is not the first such move. In May, the authorities ordered 50 businesses to cease operations after sanctions risks were identified. Their full names were not made public either. First Deputy Chairman of the Cabinet of Ministers Daniyar Amangeldiev said at the time that Western partners provide information about suspicious companies, which Kyrgyz authorities then investigate. He warned that sanctions against Kyrgyzstan itself could disrupt international payments and access to technology. How the Pressure Built Western scrutiny of Kyrgyz companies began well before the current cleanup. In the summer of 2023, the U.S. Treasury Department sanctioned four companies registered in Kyrgyzstan: RM Design and Development, Progress Lider, GTME Tekhnologii, and Cargoline. Washington said they had supplied Russia with electronics and other restricted goods, while Cargoline had shipped millions of dollars’ worth of foreign-made aviation equipment. The focus later expanded from goods to financial networks. In January 2025, the U.S. Treasury sanctioned Keremet Bank, saying it had coordinated with Russian officials and sanctioned lender Promsvyazbank on a scheme to facilitate cross-border transfers. In practice, U.S. sanctions severely restrict a bank’s ability to deal with American companies or use the U.S. financial system. Within days of Keremet Bank’s designation, Visa restricted cards issued by the bank so that they could be used only through Keremet’s own ATMs and payment terminals. In August 2025, the United Kingdom imposed sanctions on Grinex, Tengricoin, Old Vector, and Capital Bank of Central Asia as part of a crackdown on financial and cryptocurrency networks that London said Russia was using to circumvent Western restrictions. By early 2026, however, the risk was beginning to shift from sanctions against individual Kyrgyz companies and banks to restrictions affecting the country as a whole. During a February meeting with EU Sanctions Envoy David O’Sullivan, Amangeldiev discussed financial monitoring, sanctions risks, and greater transparency in foreign trade rather than Kyrgyzstan adopting EU sanctions itself. Bishkek was effectively trying to show that it could tackle sanctions evasion without joining the EU sanctions regime. The prospect of broader measures was already worrying businesses. Askar Sydykov, head of Kyrgyzstan’s International Business Council, said reports that the EU could use its anti-circumvention mechanism against the country were causing serious concern among businesses and government agencies. Those efforts were not enough to prevent broader action. In April, the EU used its anti-circumvention mechanism against Kyrgyzstan for the first time, prohibiting exports to...

Black Sea Tanker Attacks

Europe Must Defend the Distinction It Has Made Between Kazakhstani and Russian Oil

In the early hours of July 30, drones struck two tankers at the marine terminal of the Caspian Pipeline Consortium (CPC) near Novorossiysk: the Nissos Sifnos while it was loading Tengizchevroil crude at Single Point Mooring 3, and the Marathi as it approached the terminal. Loading was temporarily suspended, although the pipeline remained operational. Neither vessel sank; no casualties or oil spill were reported. Earlier attacks in July had already interrupted CPC loading operations and prompted a formal protest from Kazakhstan. Astana said that an agreed mechanism for exchanging information about civilian vessels entering the Black Sea to load CPC oil had been disregarded. The recurrence was more important than the damage: it could alter commercial expectations and behavior. The pipeline is not the relevant analytical unit; the export chain is. It can remain operational even when the maritime egress of its oil to world markets has ceased to function. Once loading stops and terminal storage fills, CPC must restrict intake from Kazakhstan, transmitting the interruption backward through the system until producers reduce output. After two tankers bound for the CPC terminal were struck in January, Black Sea war-risk premiums rose from 0.6–0.8% to 1% of vessel value, while insurers shortened their review of terms from every 48 hours to every 24 hours. By July, vessels were avoiding the terminal on safety grounds even though no structural damage to it had been reported. Commercial use of CPC was thus impaired despite the integrity of its infrastructure. The concentration of Kazakhstan’s exports magnifies the effect. CPC carries approximately four-fifths of its oil exports, including production from Tengiz, Kashagan, and Karachaganak. The July interruption exposed the consequence: full terminal storage obliged CPC to halt intake, while the Kazakhstani government confirmed that producers had reduced output because of export constraints. The vulnerability reaches backward from maritime egress into production. Crude from Kazakhstan occupies a material place in the EU’s non-Russian import structure, giving Europe a direct interest in the matter. Kazakhstan supplied 11.5% of EU petroleum-oil imports in 2024 and 9.6% in the first quarter of 2026, ranking among the Union’s three largest suppliers in both periods. The EU’s sanctions architecture already recognizes that Kazakhstani oil passing through Russian territory does not thereby become Russian oil. Commission guidance treats CPC crude as originating in Kazakhstan when supported by certificates of origin or other documentation, notwithstanding unavoidable admixture with Russian oil. EU legislation also provides targeted derogations permitting goods, technology, and services required for the operation and maintenance of CPC infrastructure. The differentiated treatment is narrow: it attaches to the origin and documentation of the cargo, not indiscriminately to every vessel, facility, or transaction associated with CPC. Cargo, route, terminal, and vessel remain legally separable. The distinction became especially salient when the sanctioned Nelsa, which had carried Russian Urals crude, was attacked at the same terminal after vessels loading Kazakhstani crude had been struck. Europe nevertheless lacks a CPC-specific public-policy position on repeated disruption of the export chain carrying exempted crude, even though its...

Energy Security

Kazakhstan Weighs Proposal to Process Russian Crude

Kazakhstan is considering a plan to process Russian crude at its refineries, a step Astana says could support plant utilization and domestic fuel supplies but could also raise sanctions-compliance and diplomatic questions, depending on its scale and structure. The Energy Ministry said on July 30 that discussions cover refining oil “of Russian origin,” selling part of the output in Kazakhstan, and exporting part back to Russia. It did not identify the refineries, volumes, counterparties, or commercial terms. The talks come as parts of Russia face fuel shortages following repeated Ukrainian strikes on refineries. Moscow has extended export restrictions on gasoline, diesel, marine fuel, and gas oils until January 31, 2027, although producers regain exemptions for several products from September 1. The two countries already exchange crude, feedstock, and refined products. Russia discussed buying about 50,000 metric tons of Kazakh gasoline in June. Astana said at the time that it had received no formal request and would protect domestic supply. Trade has since moved beyond discussion. Kazakhstan's Condensate refinery is processing Russian naphtha and exported gasoline to Russia for the first time in July. Kazakhstan has a practical industrial case for considering the proposal. Although the ministry has not identified any refinery involved in the talks, the Pavlodar refinery was designed to process West Siberian crude and remains connected to Russian supply routes. The two countries share extensive energy transport systems and coordinate annual fuel balances. The ministry said steady feedstock would support refinery utilization and domestic supply. The wider regional focus on fuel security was evident on July 31, when Tajik President Emomali Rahmon proposed building large oil refineries in Central Asia, prioritizing domestic demand for essential petroleum products. Decades of infrastructure integration also constrain Kazakhstan’s room for maneuver. More than 80% of its oil exports cross Russian territory through the Caspian Pipeline Consortium. Much of Kazakhstan’s rail trade is tied to Russian networks. These links narrow Kazakhstan’s near-term options and raise the economic cost of abrupt changes to established energy arrangements. The scale and destination of the resulting fuel would determine much of the political meaning. Small volumes sold mainly in Kazakhstan could resemble established regional commerce. A larger export-oriented program supplying Russia during a period of refinery disruption would draw more scrutiny, particularly if it materially eased pressure on Russia’s fuel system. The sensitivity has been heightened by renewed disruption around the Caspian Pipeline Consortium. On July 30, attacks hit NISSOS SIFNOS and MARATHI near the CPC terminal at Novorossiysk. Oil loading stopped only three days after Kazakhstan resumed exports following a week-long disruption. The route is Kazakhstan’s principal oil export artery. The earlier stoppage cut national oil and gas condensate output to about one million barrels per day by July 26, less than half the June average. Russia explicitly blamed Ukraine. Foreign Ministry spokeswoman Maria Zakharova called the July 30 strikes “actions of a terrorist nature” and said they harmed Kazakh and U.S. economic interests. Kazakhstan’s Energy Ministry confirmed the incidents but did not name an attacker....

Nuclear power

Central Asia’s Nuclear Push: Uzbekistan Starts Construction as Kazakhstan Plans at Least Three Plants

Uzbekistan has poured concrete for its first nuclear power plant, while Kazakhstan has signed a $16.5 billion agreement for a two-reactor facility near Lake Balkhash and approved a site for a second plant. Kazakhstan's long-term strategy calls for at least three nuclear power plants by 2050, with a fourth possible. Both governments are presenting nuclear power as a way to meet rapidly growing electricity demand and strengthen energy security. Yet the projects are advancing at different speeds and are reviving questions over water use, cross-border safety, financing, and long-term reliance on Russian technology and credit. Uzbekistan Moves Into Construction On June 4, 2026, Uzbek President Shavkat Mirziyoyev and Russian President Vladimir Putin launched construction by video link. Rafael Mariano Grossi, director general of the International Atomic Energy Agency, also took part. The first nuclear-grade concrete was poured overnight from June 4 to June 5 for the foundation slab of the first RITM-200N small modular reactor unit in the Forish district of the Jizzakh region. Uzatom subsequently classified the site as a nuclear power plant under construction. The facility is one plant with four planned reactor units: two large VVER-1000 units and two smaller RITM-200N units, each rated at 55 MW. Together, they would provide more than 2.1 GW of installed capacity. The present configuration is the latest version of a project that began with a 2017 peaceful-use agreement and a 2018 plan for two large reactors. In 2024, the focus shifted to six small reactors, before the design changed again in 2025 to the mixed large-and-small format now under construction. Uzbek and Russian projections put annual generation at about 17 billion kWh, or roughly 15% of future national demand. The current schedule envisages the first small unit reaching criticality in late 2029, with the large reactors expected to be commissioned in 2033 and 2035, although Uzatom has said final dates depend on outstanding contract arrangements. The project's stated base price is $9.5 billion, and Tashkent is seeking loans for most of the cost. Those financing terms, along with the final allocation of construction and operating risk, remain central to the project's viability. Water and Cross-Border Concerns The plant will stand near Lake Tuzkon in the Aydar-Arnasay lake system, about 40 kilometers from Kazakhstan's border. That proximity has made what is formally an Uzbek project a regional issue. Residents and environmental advocates in southern Kazakhstan have raised concerns about accident preparedness, radioactive waste, and possible pressure on already stressed water systems. Aiman Tleulesova, national coordinator of the Central Asian Regional Water Network, has argued that reactor cooling could require greater discharges into Lake Tuzkon and additional withdrawals linked to the Syr Darya system. In her assessment, that could intensify competition for irrigation water in Kazakhstan's Turkestan and Kyzylorda regions. These are concerns raised by specialists and campaigners, rather than established measurements of the completed plant's impact, but they require a quantified response because water scarcity is already a recurring regional problem. Uzbekistan held public hearings on the environmental impact assessment in...

Iran

U.S.-Iran Framework Could Reopen Central Asia’s Southern Route

The United States and Iran said on June 15 that they had reached a framework to end their war, halt the U.S. naval blockade of Iranian ports, and reopen the Strait of Hormuz. The sides said a memorandum of understanding could be signed on June 19 in Switzerland. The exact terms were not immediately known, with Iran’s nuclear program and sanctions relief left for later talks. Pakistani Prime Minister Shehbaz Sharif said the pact called for “the immediate and permanent termination of military operations on all fronts, including in Lebanon.” Trump posted, on Truth Social, “Ships of the World, start your engines. Let the oil flow!” Brent crude fell by more than 4% in early trading, and Asian stock markets advanced. Reuters later said shippers remained cautious after one LNG tanker passed through Hormuz on June 15. A reopened strait would not restore normal traffic immediately, with freight flows depending on mine clearance, insurance rules, port inspections, and shipping guidance for vessels entering the area. Kazakhstan was the first Central Asian state to publicly welcome the latest announcement. President Kassym-Jomart Tokayev praised the political will of the parties, saying they had helped “restore trust and mutually acceptable solutions.” Azerbaijan also issued a supporting statement praising Pakistan’s mediation and saying further talks could support “lasting peace and stability.” Central Asian governments had previously welcomed the U.S.-Iran ceasefire in April, with Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan calling for de-escalation and diplomacy. For Central Asia, oil prices are only part of the story. The larger question is whether de-escalation can reopen practical access to southern trade routes, ports, and markets beyond the Caspian. Since Russia’s full-scale invasion of Ukraine in 2022, the region has paid closer attention to alternatives to routes through Russia. Iran offers one of its shortest paths to the Gulf, the Indian Ocean, Türkiye, and India. But sanctions, banking risk, war insurance, and U.S. policy shifts have kept that path fragile. Chabahar is the clearest example. In May 2024, India signed a 10-year contract with Iran to develop and operate the port on the Gulf of Oman. India’s shipping minister, Sarbananda Sonowal, called Chabahar “a vital trade artery connecting India with Afghanistan and Central Asian Countries.” The port allows Indian cargo to reach Afghanistan and Central Asia without crossing Pakistan, and gives Central Asian exporters another route toward India and the Indian Ocean. The sanctions picture remains uncertain. On October 30, 2025, Washington granted India a six-month waiver that allowed operations at Chabahar to continue. No public replacement had been announced by June 15. The new framework could make another waiver easier to justify, but banks and insurers will wait for signed text, U.S. guidance, and proof that Hormuz and Iranian ports are safe. Reuters cited a senior Iranian official who said the draft framework included no new U.S. sanctions before a final deal, a temporary oil sanctions waiver, and the release of $25 billion in frozen Iranian assets. The same source said Iran would refrain from further enrichment and...