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Kazakhstan to Supply Oil to Germany via Russia’s Pipeline

By Vusala Abbasova January 14, 2023

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Oil sourced from the Karachaganak field in western Kazakhstan will be pumped through Russia’s Druzhba pipeline and delivered to Poland via Belarus before reaching Germany. / Bloomberg

Kazakhstan’s major oil transporter KazTransOil will deliver 300,000 tons of oil to Germany via the Druzhba pipeline, the world’s longest oil pipeline running from Russia to various points in eastern and central Europe.

In the press release issued on Friday, Kazakhstan’s state-owned oil transportation company claimed that the permit granted by the Russian Energy Ministry is valid for the first quarter of this year.

“KazTransOil JSC received confirmation from the Ministry of Energy of the Russian Federation for the transportation in the first quarter of 2023 of 300 thousand tons of Kazakh oil through the system of main oil pipelines of Transneft PJSC in the direction of the Adamova Zastava oil delivery point for further delivery to Germany,” the press release reads.

Oil sourced from the Karachaganak field in western Kazakhstan will be pumped through Russia’s Druzhba pipeline and delivered to Poland via Belarus before reaching Germany. The ultimate point of transit is the oil refinery in Schwedt, Brandenburg. A pilot batch of 20,000 tons of oil will be delivered to Germany in January.

On January 11, Kazakh Energy Minister Bolat Akchulakov revealed the country’s plans to export 1.5 million tons to Germany via Russia in 2023, stressing that this volume could be ramped up to seven million tons.

“There is enough capacity (in the pipeline system). The main thing is the consumers (from Germany) to take it. We have never had major problems with Russia in terms of pumping,” Eurasianet quoted Akchulakov as saying.

Kazakhstan is the ninth-largest crude oil exporter globally. The country holds three percent of the world’s total oil reserves and it is the third-largest oil producer in the Caspian region, after Russia and Iran. With over 70 percent of its oil exports going to the EU, Kazakhstan is already the third-largest non-OPEC supplier of the bloc, which is considered one of the most prolific markets for energy exporters, given its lack of domestic resources.

Meanwhile, the EU expects the volumes of Kazakhstani oil to increase amid a partial embargo and price cap on Russian oil.

After Russia’s invasion of Ukraine, which started in February 2022, European countries have been focusing on how to wean themselves off Russian oil and gas and prevent a wider energy crisis. As part of the sixth and toughest sanctions package against Moscow, European Union leaders agreed to embargo two-thirds of Russian oil imports into the bloc by late 2022.

EU countries stopped imports of Russian oil delivered by sea in 2022, with a ban on refined oil products from February 2023. The US has also completely stopped importing Russian oil. The UK pledged to completely stop importing Russian oil by the end of 2022 and implemented a ban on imports of Russian liquified natural gas (LNG) that came into effect on January 1, 2023. Other European leaders have focused on limiting their imports over the next several years through conservation, finding alternative sources, and switching to wind and solar power as fast as possible.

Energy-rich Kazakhstan annually supplies 67 million tons of oil to Europe through Russia. For 20 years, Kazakh oil has been shipped through the CPC pipeline to Russia’s Novorossiysk, which provides access to the global market. Kazakhstan exports more than two-thirds of its oil via the CPC pipeline.

In early July 2022, a Russian court banned Kazakh oil exports via Novorossiysk for 30 days, marking the third time that Russia restricted or threatened to restrict the operations of the CPC since March. However, an appeals court overturned the ban on July 11.