Kazakhstan's Kondensat Plant to Process Russian Oil
As fuel shortages grip Russia, Kazakhstan's Kondensat refinery is gearing up to process Russian crude. Under the terms of the agreement, 70% of the fuel produced at the plant will be shipped to Russia, with the remaining 30% of gasoline and diesel kept for Kazakhstan's domestic market. Energy Minister Erlan Akkenzhenov confirmed the arrangement, adding that the owner of the crude is not subject to sanctions, though he refrained from naming the company.
Gasoline and diesel from Kondensat could be on their way to Russia within a short timeframe. The plant can produce 200,000 tonnes of gasoline and 200,000 tonnes of Euro-5 diesel per year. That would cover roughly four days of Russian motor-fuel demand, as the country consumes about 110,000 tonnes daily.
What the Deal Means for Russia's Energy Security
Built at the Karachaganak field to serve West Kazakhstan's fuel needs, Kondensat saw its annual capacity expand from 650,000 to 850,000 tonnes in 2017. With Ukrainian strikes having severely damaged Russian refineries, this agreement could become a vital source of fuel for Moscow.
- By June 16, Ukrainian strikes had hit 16 major Russian refineries and terminals, knocking out more than 30% of the country's refining capacity.
- After July attacks on the Omsk refinery, nearly all of Russia's ten largest refineries have been struck.
On June 29, Russian President Vladimir Putin publicly admitted for the first time that citizens and businesses were struggling to buy gasoline. Around the same time, Russia began negotiating imports of AI-92 gasoline from Kazakhstan, with possible deliveries of roughly 50,000 tonnes. June also saw record-high gasoline imports from Belarus into Russia, nearly 2.5 times the May volume.
This arrangement underscores Kazakhstan's growing role as a fuel supplier amid Russia's intensifying gasoline shortage, which stems from a mix of factors, most notably strikes on oil infrastructure.
“The fuel-supply deal between Kazakhstan and Russia reflects shifting dynamics in the region's energy market.”
By exporting fuel, Kazakhstan could strengthen economic ties with its neighbor while responding to Moscow's urgent demand. It also signals Astana's adaptation to the new realities created by international sanctions and the conflict in Ukraine, which are reshaping Russia's energy security landscape. The move underscores Moscow's growing reliance on neighboring countries for refined fuels as wartime pressure on its energy sector persists.
As Russia grapples with significant fuel shortages exacerbated by recent conflicts, the stability of its energy supply has come under scrutiny. In this context, Ukraine's commitment to refrain from attacking key oil transport routes plays a crucial role in ensuring the uninterrupted flow of Kazakh oil. This arrangement not only supports Russian fuel needs but also highlights the delicate balance of power in the region.