Shipment of Kazakh Oil via Baku Port Increases

Kazakhstan is making progress in its efforts to expand the export of crude oil through non-Russian routes, as part of its diversification strategy.

On Wednesday, Kazakhstan’s major oil transporter KazTransOil revealed that the flow of Kazakh oil to European markets through Azerbaijan increased in April.

"The increase in the transportation of Kazakh oil for export from the port of Aktau is related to the increase in the volume of raw materials transported to the port of Baku from 87,000 tons to 152,400 tons, or 75 percent compared to March 2023," KazTransOil said in a press statement.

This came under a master agreement, signed earlier between Azerbaijan’s SOCAR and Kazakh national energy firm KazMunayGas, which provides for the transport of 1.5 million tons of oil annually from the Tengiz field through the Baku-Tbilisi-Ceyhan pipeline.

There has been a significant surge in export of Kazakh oil from Aktau port. The transport volume increased month-on-month by 60,500 tons, or 24 percent, to 312,600 tons in April 2023. This comprises 115,000 tons of crude oil sourced from the Tengiz field, 19,200 tons from the Dunga onshore field, and 178,300 tons from the Buzachi Peninsula.

In addition, a total of 160,200 tons of oil were shipped from Aktau port to Makhachkala port.

In 2022, Kazakh President Kassym-Jomart Tokayev emphasized the significance of fully leveraging the potential of the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, which stretches from China to Europe covering Central Asia and South Caucasus.

The Trans-Caspian route matters to Kazakhstan's economic security and has grown more important, as exports through Russian territory are becoming increasingly difficult due to the fallout from Moscow's Ukraine war.

The Middle Corridor has emerged as a key trade route between Europe and Asia, offering greater economic benefits and faster transit times for the landlocked countries in the region. The Baku International Sea Trade Port in Azerbaijan, Aktau/Kuryk ports in Kazakhstan, and Turkmenbashi Port in Turkmenistan are the primary maritime points on this route, which promises significant gains for regional trade.

Compared to the Northern Corridor, the Middle Corridor provides a more cost-effective and faster trade route, cutting down the travel distance by 2,000 kilometers. Additionally, the Middle Corridor passes through more favorable climate conditions and reduces travel time by 15 days compared to sea routes. The Middle Corridor also presents immense opportunities for cargo traffic in Asia, enabling goods to reach the Middle East, North Africa, and the Mediterranean region by integrating port connections in Türkiye.

The strategic location of the Middle Corridor is expected to create significant economic opportunities, enabling South Caucasian and Central Asian countries to benefit from the $600 billion China-Europe trade annually. The development and deepening of Trans-Caspian cooperation will be facilitated by the establishment of logistics centers and free trade zones at the ports of Azerbaijan, Kazakhstan, and Turkmenistan, providing a boost to regional economies. By leveraging the benefits of the Middle Corridor effectively, the countries in the region can reap the rewards of increased trade and economic growth.