Kazakhstan's Oil Exploration Solutions

An oil pipeline traversing Russia has been repeatedly hit by drones, prompting a rapid replacement of another trans-Caspian shipping route.

The port of Novorossiysk, located on the northeastern coast of the Black Sea, is a crucial hub for oil exports between Russia and Kazakhstan. On November 29th last year, it was again attacked by Ukrainian drones at sea, damaging and disabling a single-point mooring system used for loading oil ships. This was the second attack on Caspian Pipeline Union facilities that month, bringing loading operations to a complete standstill and forcing tankers to evacuate.

For Kazakhstan, which relies on this route for 80% of its oil exports, each attack means its economic lifeline is severely threatened.

01 The Vulnerability of the Oil Lifeline

The Caspian Pipeline Union is Kazakhstan's veritable oil artery. This 1,500-kilometer-long pipeline connects western Kazakhstan's oil fields with the port of Novorossiysk on the Black Sea coast, transporting approximately 67 million tons of oil annually, accounting for more than 1% of global oil supply.

Kazakhstan relies on this pipeline for 80% of its oil exports. In 2022, the pipeline transported 68.6 million tons of oil, the vast majority of which originated in Kazakhstan. Any disruption to the CPC pipeline would directly impact the Kazakh economy, as oil and gas exports account for over 60% of the country's total exports and contribute more than half of its foreign exchange earnings.

The CPC is not simply a Russian project, but a complex international collaboration. Russian and Kazakhstani state-owned enterprises are major shareholders, but Western oil giants such as Chevron and ExxonMobil also hold significant stakes. This shareholding structure means that an attack on the CPC would have broad international repercussions.

Pipeline operation itself is fraught with challenges. The CPC expansion project progressed slowly due to heterogeneous shareholders and differing interests; work originally scheduled for completion in 2014 was not completed until 2018.

In recent years, the CPC pipeline has experienced repeated operational disruptions. From March to August 2022, Russian authorities repeatedly suspended operations on sections of the CPC for maintenance, including at the Novorossiysk oil terminal, the system's terminus.

02. Ongoing Risks from the Conflict

Since the outbreak of the Russia-Ukraine conflict, the security situation in the Black Sea region has deteriorated significantly. Following the full-scale outbreak of the conflict in February 2022, at least three merchant ships were hit in the Black Sea, leading insurance companies to either stop insuring vessels entering the Black Sea or demand exorbitant premiums.

Daily rates for oil tankers from the Black Sea to the Mediterranean surged by over $90,000, reaching $107,382 per day, the highest level since April 2020. Security risks have led to a surge in shipping costs, further reducing the attractiveness of transporting Kazakhstani oil via the Black Sea.

Turkey's role has also added complexity to Black Sea shipping. In December 2022, Turkey required oil tankers unable to provide valid insurance certificates to stay away from the Turkish Straits, resulting in over 20 million barrels of oil being stranded in the Black Sea.

At that time, approximately 40 oil tankers were blocked outside the straits, about 20 of which were carrying Kazakhstani oil. While Turkey cited security reasons for this move, geopolitical considerations were also present.

Attacks on CPC facilities by Ukraine have become a regular threat. In February 2025, the CPC pipeline system was again attacked by drones, resulting in a 30% drop in oil shipments, with repairs expected to take 1.5 to 2 months.

An attack last November targeted CPC's offshore mooring facilities, forcing the Novorossiysk port terminal to suspend operations.

03 Accelerated Development of Alternative Routes

Faced with the uncertainty surrounding the CPC pipeline, Kazakhstan is actively promoting the diversification of its oil export routes. Among these, the trans-Caspian route has attracted significant attention—running from Central Asia across the Caspian Sea and extending through Azerbaijan. This route has been in operation for over a quarter of a century, experiencing ups and downs but never being completely interrupted.

Kazakhstan plans to increase oil transshipment through Azerbaijan. In early 2023, Kazakhstan's national oil and gas company signed an agreement with Azerbaijan's national oil company to transport over 1 million tons of Kazakh oil through the Baku-Tbilisi-Ceyhan pipeline system.

Since April 2023, 1.392 million tons of oil, mainly from the Tengiz oil field, and crude oil from other Kazakh producers, have been transported by tanker via the BTC system, exceeding the figure for the same period in 2022 by more than 5.5 times.

In 2024, Kazakh oil transported via BTC reached 1.4 million tons, slightly below the planned target of 1.5 million tons. According to the Kazakh Ministry of Energy, the 2025 transport plan via BTC will remain at the 2024 level, i.e., 1.5 million tons of oil.

Azerbaijani Energy Minister Parviz Shakhbazov stated, “Since 2023, the total amount of Kazakh oil exported to the global market via the BTC pipeline has reached 3.4 million tons, and the plan is to increase this amount to 7 million tons per year by 2027, with the possibility of further increases under mutually beneficial conditions.”

04 Geopolitical and Economic Game Between East and West

Kazakhstan's balancing act between Russia and the West is extremely delicate. In June 2022, Kazakh President Kassym-Jomart Tokayev stated in front of Vladimir Putin at the St. Petersburg Economic Forum that Kazakhstan did not recognize the independence of Donetsk and Luhansk. This statement sparked widespread discussion about a "rift" in Russia-Kazakhstan relations.

Following the outbreak of the Russia-Ukraine conflict, Kazakhstan attempted to maintain a neutral stance. In early April, the First Deputy Chief of Staff of the Presidential Administration of Kazakhstan publicly stated that Kazakhstan would not become a tool for Russia to circumvent US and EU sanctions. Simultaneously, relations between Kazakhstan and the US also improved, with the First Deputy Minister of Foreign Affairs of Kazakhstan thanking the US for its flexible stance in minimizing the impact of sanctions on the Kazakh economy [citation:5].

The choice of oil export routes is not only an economic issue but also involves political considerations. Kazakhstan renamed its oil exported through Russian seaports as KEBCO to distinguish it from Russian oil. This decision reflects Kazakhstan's efforts to safeguard its economic interests amidst geopolitical changes.

The EU's pursuit of energy supply diversification has also influenced Kazakhstan's choices. With the decline in raw material transshipment via the Northern Route, the attractiveness of transporting Kazakh oil through Azerbaijan has increased. As EU countries seek to reduce their dependence on Russian energy, Kazakhstan's oil has become an attractive alternative.

In 2022, Kazakh President Tokayev told the EU that Kazakhstan was willing to help Europe overcome its oil and gas shortages. This statement indicates Kazakhstan's attempt to maintain a balance between East and West while protecting its own economic interests.

05 Challenges and Prospects of Diversifying Transportation Routes

While the trans-Caspian route has garnered significant attention, Kazakhstan faces numerous challenges in diversifying its oil exports. Kazakhstan's Energy Minister, Erlan Akenonov, pointed out that using the Baku-Supsa pipeline is more expensive than transporting via the Russian route.

"Oil must be loaded onto tankers at Aktau port, unloaded at Baku port, and then reloaded into the Baku-Supsa system to reach the Black Sea," he explained. This double loading and unloading makes the route more expensive for Kazakh shippers.

The BTC pipeline also has limited transport capacity. Currently, Kazakhstan's planned annual transport volume via the BTC pipeline is 1.5 million tons, far below the CPC pipeline's annual capacity of 67 million tons. Shifting such a massive transshipment volume to alternative pipelines—whether to China or via the BTC route—remains currently not feasible.

From the beginning of 2025 to November 21, over 65.5 million tons of Kazakh oil have been exported via the CPC route, more than 9 million tons higher than the same period last year. This indicates that despite the existence of alternative routes, Kazakhstan will remain heavily reliant on Russia's CPC pipeline system for the foreseeable future.

Kazakhstan is also exploring other alternative routes, including constructing a trans-Caspian international transport corridor to the west, directly supplying oil and gas to European countries; and tapping the potential of the China-Kazakhstan oil pipeline to the east, continuously increasing the transport capacity of the Atyrau-Kenkiyak and Kenkiyak-Kumkol oil pipelines through Alashankou to China.

Kazakhstan's Deputy Energy Minister Sanzar Zharkeshev stated, "The BTC route is strategically significant for Kazakhstan because it helps diversify export routes and reduce dependence on specific supply directions. We anticipate a response from Azerbaijan, which shares this strong interest, and we are ready to commit to implementing this route."

As the conflict in Ukraine continues, Kazakhstan is accelerating its oil export diversification strategy. In December, oil shipments via the Baku-Tbilisi-Ceyhan pipeline were estimated at 188,000 tons, a 30% increase from November.

With the increasingly complex situation at the port of Novorossiysk, the Kazakh Ministry of Energy has urgently accelerated its plan to shift export volumes through alternative routes.

In the foreseeable future, Kazakhstan's oil will continue to flow to both Eastern and Western markets. However, geopolitical shifts are subtly reshaping the flow of energy in Central Asia, and the TRACECA transport corridor, after experiencing ups and downs, is now poised for new opportunities.