The economic and energy development of Europe requires a constant supply of oil. For many years, Russia has been the main supplier of this resource for the Old Continent, but the political and economic tensions between Moscow and Europe have made it increasingly necessary to look for alternative oil sources. One of the countries that can meet the European demand for oil is Kazakhstan.
Kazakhstan – the new supplier of oil for Europe?
Kazakhstan is one of the biggest oil producers in the world. 90 million tons of this resource were produced there in 2020. For Kazakhstan, oil is the key source of income, which is why the Kazakh government is looking for new customers, also in Europe. In recent years, Kazakhstan has intensified its production and expansion to European markets, also by building new pipelines and terminals. It plans to expand the port in Kuryk, which could export up to 20 million tons of oil per year. Then, the product would be sent to Baku across the Caspian Sea and from there to Ceyhan using the Baku-Tbilisi-Ceyhan oil pipeline.
Challenges connected with the supply of Kazakh oil
The primary objective of importing oil from Kazakhstan was to reduce Europe’s dependence on Russia as the primary oil supplier. However, this effort was only partially successful, as Moscow reduced its export but continued to earn money by transmitting Kazakh oil via the “Druzhba” pipeline. This raises concerns because Russia can revoke its consent for transit at any time, abruptly halting the supply of oil. Currently, 94% of Kazakh oil is supplied via the Russian network, and European end customers are uncertain whether the product they receive actually comes from Kazakhstan due to instances where Russian and Kazakh products were mixed. Last year, Kazakhstan changed the name of its oil to KEBCO to differentiate it from Russian REBCO oil and safeguard it from potential sanctions.
However, the plan to replace Russian oil with Kazakh oil seems more feasible on paper than in reality. Despite plans for the expansion of oil infrastructure, the share of Kazakh oil in European imports will remain insignificant. In 2021, it accounted for only 2% of imports to the continent, compared to the 12% imported from Russia. Therefore, Europe is unlikely to regard Kazakhstan as a reliable energy security guarantor.
n the end, Europe will have to continue searching for alternative oil sources, also by developing new technologies, including renewable energy sources and natural gas. Although it is possible that Kazakh oil could complement Russian oil, and help our continent to achieve a greater degree of independence.