Russia Seen Being Edged Out of Central Asian Markets Not Just by China and West but by Kazakhstan

Paul Goble

            Staunton, July 4 – A great deal of attention has been given to the inroads China and Western countries have made in the economies of Central Asian countries since the end of Soviet times; but now Kazakhstan, a dark horse in this competition, is expanded its presence and edging Russia out as well, according to Viktoriya Panfilova of Nezavisimaya gazeta.

            The specialist on the former Soviet republics reports that Kazakhstan is beginning to export oil and gas to other Central Asian countries, despite its earlier agreement not to do so because Kazakhstan imports these commodities from Russia and Moscow opposes their resale (ng.ru/cis/2018-07-03/1_7257_market.html).

            But Astana has just spent six billion US dollars on the modernization of its oil processing plants and is seeking to gain energy independence from Russia. As a result, it has some gas and oil available to sell to other Central Asian countries and is seeking at meetings this week a revision in its agreement with Moscow on that possibility.

            Russian specialists in the oil market suggest that there is no conflict of interests between Moscow and Astana over this issue; but, of course, there is: if Kazakhstan is able to expand its sale of gas and oil to the other Central Asian countries, something it is likely to be able to do because its prices are much lower, Russia’s sales and its leverage there are likely to decline.

            What Moscow would like to do is to get Kazakhstan to sell its oil and gas not to the former Soviet republics, Panfilova says, but rather to Afghanistan; but that possibility is limited by the lack of adequate pipelines and by the greater profits financial and political Astana can gain by selling these things closer to home.