Kazakhstan joins the race to build energy resilience

Kazakhstan’s one-pipeline problem: Kazakhstan is stepping up efforts to diversify its oil export routes after repeated disruptions to the Russian-backed Caspian Pipeline Consortium (CPC) showed the risks of relying on a single corridor that carries around 80% of the country’s crude exports, according to a recent Financial Times film (watch, runtime 25:17). Since Russia’s invasion of Ukraine, attacks on infrastructure around the Black Sea export route have periodically disrupted Kazakh shipments, forcing producers to curb output and prompting Kazakhstan to accelerate investments in alternative logistics corridors.

Alternative routes are growing — but they’re still nowhere near replacing the CPC. Kazakhstan has started moving crude through the Baku-Tbilisi-Ceyhan (BTC) pipeline to the Mediterranean (1.4 mn tons), resumed exports to Germany through the Druzhba pipeline (1.5 mn tons), and continued exporting crude to China by pipeline (1.2 mn tons). Even combined, these routes — with a total of 4.1 mn tons — cannot match the roughly 60 mn tons of oil that move annually through the CPC, leaving the Russian corridor firmly at the center of Kazakhstan’s export system.

Hedging on logistics to reduce that dependence over time, Kazakhstan is expanding the Caspian port of Aktau to increase shipments across the Caspian Sea and to expand oil exports through the BTC route to 2.2 mn tons by 2026. Broader investments in the Trans-Caspian International Transport Route aim to raise freight volumes from 4.5 mn tons last year to 20 mn tons by 2030. Officials also want logistics’ contribution to rise from 6.5% to 9-10% over time.

There’s another problem: The Caspian Sea is shrinking. Sea levels have fallen roughly two meters over the past two decades, forcing Kazakhstan to dredge parts of the Aktau port to keep ships moving. Officials acknowledged that dredging alone won’t solve the problem, arguing that broader regional cooperation will be needed to manage the Caspian’s long-term environmental decline.

Why it matters: Kazakhstan remains heavily reliant on hydrocarbons despite years of diversification efforts. Oil production has increased fivefold since the country opened its upstream sector to foreign investors in the early 1990s, but dependence on a single export route has become a growing strategic vulnerability as the war in Ukraine increasingly spills into energy infrastructure.

Diversification, not divorce: Officials interviewed by the FT argue that oil will remain Kazakhstan’s dominant industry for at least the next two to three decades, while investments in manufacturing, logistics, and critical minerals are intended to create new sources of growth rather than a substitute for petroleum revenues.

Our take hasn’t changed — only the evidence has grown stronger: Kazakhstan’s scramble to reduce its reliance on the CPC is another reminder that energy logistics is no longer just about moving barrels along the cheapest route. Geopolitical shocks — from the war in Ukraine to attacks in the Red Sea and repeated tensions around Hormuz — are forcing producers to pay for redundancy, optionality, and resilience. That means investing in multiple export corridors, spare capacity, and alternative ports, even when they are more expensive, because the cost of having no alternative has become much higher than the cost of maintaining one.