Tajikistan and Kyrgyzstan, as countries that were heavily dependent on Russian oil, are now looking for new oil sources from Iran. Given the fuel crisis resulting from sanctions and Ukraine's drone attacks on Russian refineries, these countries are in search of alternatives for their oil and fuel.
Current Fuel Situation in Central Asia
Tajikistan traditionally sourced about 80 percent and Kyrgyzstan over 90 percent of their gasoline and petroleum products from Russia. However, with increasing disruptions in Russian fuel supply, these countries are seeking new suppliers. For example, Tajikistan received 2.55 million tons of petroleum products from Iran in August, and Kyrgyzstan is also negotiating to build a joint refinery with Iran.
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Challenges and Opportunities
While Iran can meet part of these countries' oil needs, there are also challenges along the way. The geography of the region is such that Iran does not share a border with Tajikistan and Kyrgyzstan, and shipments must be transported through neighboring countries like Turkmenistan and Uzbekistan. According to Frederick Schneider, a Middle East expert at the Global Council, the orders placed by Tajikistan alone require about 51,000 rail tanker cars.
On the other hand, Tajikistan's total oil demand is estimated at only about 50,000 barrels per day, which is a small figure compared to the approximately 1.7 million barrels that Iran exported last year. Schneider believes that the Central Asian market could be a suitable place for Iran's gasoline and diesel exports, but it cannot replace larger markets like China.
However, the close relationship between Iran and Russia may hinder Iran's efforts to capture traditional Russian markets. If the attacks in Ukraine cease and Russia can repair its damaged refineries, Russian fuel is likely to return to these markets with a price advantage.
Overall, while the Russian fuel crisis presents an opportunity for Iran to enter the Central Asian market, logistical limitations and the risk of U.S. secondary sanctions could negatively impact this trade. Therefore, despite the existing potentials, an uncertain future awaits Iran's oil exports to these countries.
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