Kazakhstan’s Oil Refineries Have Ignored putin’s Fuel Shortage

Kazakhstan’s leading oil refineries have declined government quotas for the export of AI-92 petrol to russia, redirecting production to their own domestic market. The Pavlodar Petrochemical Plant received permission from the country’s Ministry of Energy to supply 17,500 tons of fuel to russia back in July, while the Atyrau Oil Refinery received a similar quota in August. Both companies ignored this opportunity.

The official justification cited unfavorable commercial terms. The reality is more complex and reveals just how fragile the economic component of Kazakhstan’s alliance with the kremlin is.

The main risk for Kazakhstan’s businesses is secondary sanctions. Any expansion of cooperation with russian companies threatens to complicate companies’ access to Western financing, insurance, and logistics, while also jeopardizing Kazakhstan’s oil exports to Europe. Added to this is a practical problem with payments: restrictions imposed on the russian banking sector turn any payment from moscow into a source of delays and financial losses.

Domestic demand for fuel also leaves Kazakhstan’s oil refiners with little room for experimentation with exports. Summer traditionally boosts petrol consumption in the country, and the situation has been further exacerbated by a sharp drop in russian shipments of petroleum products to Central Asia and Afghanistan – petrol down 34% and jet fuel down 90%.

On top of all this comes basic economics: the profitability of petrol exports to russia remains low, and the quotas allocated by Kazakhstan’s authorities – even if fully utilized – are insufficient to cover the fuel shortage russia is facing.

As a result, the kremlin received a political gesture from Astana rather than actual goods. The export permit remains a symbol of a willingness to cooperate, while the business community is voting against the shipments themselves – due to sanctions risks and calculations of its own profitability. This is yet another example of how moscow’s formal allies in the post-soviet space demonstrate loyalty in words while avoiding any actions that could harm their own economic interests.