Kazakhstan has promised EU aid, and the Kremlin is already sending signals. “I want Tokajew to bow down”

What an extraordinary coincidence: On July 4, the President of Kazakhstan, Kasym-Żomart, Tokayev, announced in a telephone conversation with the President of the European Council Charles Michel that his country was ready to help the European Union overcome the current energy shortage. The next day, a district court in the Russian port city of Novorossiysk ordered the suspension of the operation of the oil terminal through which the main stream of Kazakh oil to Europe passes for a month.

The Caspian Pipeline Consortium (CPC) pipeline, which runs from the giant Tengiz field in western Kazakhstan through Russian territory to the Black Sea, ends in Novorossiysk. But Russian regulator Rostransnadzor has now found that CPC’s Novorossiysk plants are in breach of environmental legislation and asked the court to suspend production activities for 90 days. Although no direct environmental pollution has been identified, according to the Russian media, there are shortcomings in the plan for dealing with oil spills in crisis situations.

The Kazakh authorities are trying, on the one hand, to de-escalate the situation. They reported that the terminal was still operational. On the other hand, President Tokayev demonstratively ordered on 7 July to look for alternatives to the gas transit.

The Kremlin is sending signals that Tokayev should bow

“I think the closure of the terminal near Novorossiysk, through which the CPC oil is delivered, is one of a series of purely political events,” says DW Mikhail Krutichin, a Russian energy expert and partner at RusEnergy consulting company. Krutikhin views the court’s decision as a reaction to the recent statement by the President of Kazakhstan.

– He expressed a willingness to use oil and gas from Kazakhstan to help solve the problems of the European Union, where shortages may occur due to the EU oil embargo against Russia – he says.

Leyla Alieva, a political scientist at the University of Oxford and an expert on Eastern Europe, however, believes that the court’s ruling should not be seen as a direct response to Tokayev’s statement that he wants to help the EU. “It was rather a reaction to Kazakhstan’s growing tendency to shape its policy independently of Moscow,” he says.

In this context, Alieva recalls Tokayev’s speech at the June Economic Forum in St. Petersburg, where he unexpectedly stated that Kazakhstan would by no means recognize the self-proclaimed pro-Russian territories in Ukraine and would respect Western sanctions. Kazakhstan itself considers itself endangered by Russia. Several senior Russian officials have recently hinted that the Ukrainian scenario is also possible in Kazakhstan.

Not the first stop of deliveries

The latest Russian court decision to suspend the shipment of Kazakh oil is not the first of its kind since Russia launched a full-scale war with Ukraine. On March 22, the port in Novorossiysk informed that the equipment used for filling the tankers had been damaged as a result of the storm. In the 20-year history of the pipeline, it has never failed due to a storm, as the newspaper Handelsblatt then noted. One of the two allegedly damaged loading platforms was restarted on April 23, while the other was shut down until July 1.

Meanwhile, on June 15, routine work began in the port waters of searching for underwater mines from World War II. For 10 days, only a small part of the raw material could be shipped. The search for the mines was then extended for a further 10 days to 5 July.

Finding alternatives

The Kremlin wants to check Kazakhstan’s reaction to such a court verdict, says Leyla Alieva. – Kazakhstan could enter into negotiations and make some concessions. I think that is what the Kremlin is counting on. However, the effect of such pressure is usually counterproductive. Countries are starting to look more and more for alternative sources of supply, alternative alliances and markets, he says.

But it is not easy to find alternative export routes. Therefore, in an interview with Charles Michel Kasym-Żomart, Tokayev called on the European Union to help develop alternative transcontinental corridors, including the trans-Caspian international transport route. In particular, it concerns the export of Kazakh oil, bypassing Russia, along the Caspian Sea to Azerbaijan, where the oil pipeline from Baku via Tbilisi to the Turkish Mediterranean port of Ceyhan begins. But this part has yet to be expanded. Kazakhstan already has access to the Baku-Tbilisi-Ceyhan pipeline, but oil supplies from Kazakhstan through this pipeline are minimal.

For Kazakhstan, the stoppage of exports by Novorossiysk remains a big and persistent problem, Mikhail Krutikhin says. In his opinion, alternatives can only slightly compensate for the current CPC blockade.

Oil from Kazakhstan more and more important for the EU

Germany has been buying Kazakh oil for over two decades, and its market share has grown rapidly in recent years. In 2021, Kazakhstan for the first time became the third largest supplier of oil to Germany after Russia and the USA. When the EU embargo on Russian oil enters into force at the end of 2022, the role of this Central Asian country in supplying not only Germany but the entire European Union may increase. Already in 2019, i.e. before the coronavirus pandemic, Kazakhstan was already one of the five most important suppliers of crude oil to the EU, with a share of 7.65 percent, just ahead of Saudi Arabia and the US.

In the case of the European market, Mikhail Krutikhin does not expect any major problems due to the interruptions in the supply of Kazakh oil to the EU. – This may worsen the supply of refineries in the EU, but it is difficult to assess the scale of these possible problems. After all, there is no shortage of crude oil on the global market at present – adds the expert.