Kazakhstan, with its vast oil reserves, is facing serious challenges in increasing production and helping to alleviate the global energy crisis. Given the closure of the Strait of Hormuz, Russia's sanctions, and damage to the Saudi East-West pipeline due to Iranian drone attacks, energy prices are expected to rise. The Saudi pipeline alone was responsible for supplying about 4 percent or 4 million tons per day of global oil needs, most of which was sent to Asian markets.
Challenges in Kazakhstan's Oil Production
Kazakhstan's oil industry is facing two major challenges: declining production and ongoing threats to existing export options. According to a statement from the Kazakh government, oil production in the first eight months of 2026 reached 61.7 million tons, which is 8.4 percent lower than the initial target. One of the factors contributing to the reduction in production capacity is a planned maintenance that began in September at the Karachaganak oil and gas field, one of Kazakhstan's largest fields. Nurlan Zhumagulov, an industry expert in Kazakhstan, has confirmed this issue.
Due to disruptions caused by Karachaganak and other factors, the government has revised its annual production forecast from 100 million tons to 96 million tons. Production in 2025 reached 99.6 million tons.
Export Problems for Kazakhstan's Oil
In addition to production challenges, Kazakhstan is facing increasing difficulties in transporting oil to global markets. Nearly 80 percent of the country's oil exports are carried out through the Caspian Pipeline Consortium (CPC) to the port of Novorossiysk in Russia. Terminal facilities in Novorossiysk and the pipeline itself have recently been subjected to repeated attacks by Ukrainian drones. The latest disruption from these attacks occurred on September 8 with an assault on the CPC oil loading facilities.
Kazakh officials are facing a lack of alternative options to CPC. Efforts are underway to increase export volumes through the Trans-Caspian route to Azerbaijan, a route that could send crude oil westward via the Baku-Tbilisi-Ceyhan (BTC) pipeline. However, logistical factors limit export capacity, as crude oil must be transported by ships across the Caspian Sea, and BTC's ability to accept Kazakh oil is limited. In any case, BTC cannot significantly reduce Kazakhstan's dependence on CPC. In 2025, CPC transported about 65 million tons of Kazakh crude oil, while Azerbaijani officials have stated that the BTC route has an annual capacity of 2.2 million tons for Kazakh oil.
The two countries are also exploring the possibility of sending an additional 5 million tons of Kazakh oil to European markets via the Baku-Supsa pipeline. Kazakhstan's government's desire to reduce long-term dependence on CPC has encouraged new discussions about constructing a long-considered Trans-Caspian pipeline. However, building such a route requires significant time, political will, and financial investments. Kazakhstan does not have the necessary resources to implement these projects alone. Joseph Shumonov, an industry analyst, stated this in a survey published in Astana Times.
Shumonov also noted that the European Union imported about 52.4 million tons of Kazakh crude oil in 2024, making Kazakhstan its third-largest foreign supplier. If Europe is looking to diversify its resources towards the west, it must make projects investable with funding and long-term commitments.
