Kazakhstan’s $2.3 billion oil blow: Export problems trigger major revenue loss

In the first quarter of 2025, Kazakhstan’s oil exports dropped more than 20%, driving a 12% decline year-on-year in the country’s total exports. Copper cathode exports also fell 15%. As a result, Kazakhstan’s exports to its three main markets — the European Union, China and Russia — have declined.

Kazakhstan’s oil exports

Kazakhstan’s top 10 export items, excluding oil

Kazakhstan’s top 10 fast-growing export items

Kazakhstan’s major export destinations

Kazakhstan’s oil exports

In the first quarter (Q1) of 2025, Kazakhstan’s total exports fell by $2.2 billion to $16.4 billion, an 11.9% decrease year-on-year (YoY). The country’s export economy is highly concentrated, meaning fluctuations in just a few key products can significantly impact overall figures.

This time, oil — the country’s leading export commodity, which typically generates more than half of total export revenue — was the primary driver of the decline. Between January and March 2025, oil export revenues dropped by $2.3 billion to $8.6 billion, down by 21.2% YoY. The decline was driven by reduced physical shipments and lower global prices for crude oil.

Kazakhstan’s oil producers have been hit hard by falling prices. Following a roughly 9% YoY drop in the price of Brent crude, the global benchmark, the price of Kazakh oil on international markets fell 8.5%, from $608 per ton in Q1 2024 to $556 in Q1 2025.

However, the losses were driven more by structural disruptions than short-term market fluctuations. In Q1 2025, Kazakhstan shipped 15.4 million tons of oil to its trading partners, down 2.5 million tons or 14% YoY.

The drop in volumes had been anticipated as early as February, following a Ukrainian drone strike on the Kropotkinskaya pumping station, one of the largest facilities of the Caspian Pipeline Consortium (CPC). The pipeline handles up to 80% of Kazakhstan’s oil exports, most of which are bound for high-value markets in Europe and North America.

On Feb. 17, 2025, Ukrainian armed forces targeted the Kropotkinskaya station. According to the CPC, the attack damaged closed switchgear, a gas turbine unit (GTU), cables, a cable rack, a water tank, two transformers, filters and the GTU’s fire extinguishing system. The next day, CPC engineers confirmed that crude oil was still being pumped through the Tengiz-Novorossiysk pipeline under an emergency workaround, bypassing the damaged station. Even so, the consortium warned that exports from Kazakhstan could fall by up to 30% during the repair period, initially estimated to last about two months. As of the latest update, the station is expected to return to full operation by the end of May.

The feared 30% collapse did not materialize: crude oil shipments via the CPC system rose 3.8% YoY in Q1, reaching 17.8 million tons, according to KazMunayGas (KMG), Kazakhstan’s national oil company. Customs data also show that physical exports to Western markets, Europe and North America, increased 1.3% to 14.2 million tons.

Overall, oil shipments began to decline in January 2025, when exports fell 13.7% YoY to 4.8 million tons, a drop of 766,000 tons. The steepest losses came from three Asian markets: China (down 925,000 tons), Singapore (down 270,000 tons) and South Korea (down 154,000 tons). Combined, those three countries reduced imports of Kazakh oil by 2.4 million tons in Q1, accounting for a nearly 2.5 million-ton quarterly decline.

China accounted for nearly half of Kazakhstan’s YoY losses in physical oil export volume during Q1 2025. In recent years, China has driven much of the growth in global hydrocarbon demand. However, data from the first three months of 2025 show a softening of that trend, with the country reducing oil imports by 1.5% to 135.3 million tons.

The decline may reflect broader economic challenges. In February, analysts from the International Energy Agency (IEA) warned that China’s consumption of oil products was nearing a plateau and could soon begin to decline. The agency pointed to falling gasoline demand, driven by rapid growth in electric vehicle sales and expanded public transportation infrastructure. Notably, in 2024, China purchased 2.9 million tons of Kazakh oil for $1.9 billion, ranking sixth among Kazakhstan’s oil buyers.

Meanwhile, South Korea has halted imports of Kazakhstani oil altogether. In March, S&P Global reported that South Korea had suspended purchases of Kazakhstan’s CPC Blend crude due to heightened risks from Houthi attacks on shipping in the Red Sea. As a result, South Korea increased its imports of U.S. West Texas Intermediate (WTI) crude instead.

CPC Blend crude travels from Kazakhstan to the Russian Black Sea port of Novorossiysk and is typically shipped via the Suez Canal to South Korea. But since late 2023, rerouting through the Cape of Good Hope has become necessary to avoid conflict zones, making transportation longer, more complex and prohibitively expensive. In 2024, South Korea had imported 1.7 million tons of Kazakhstani oil worth $1.1 billion, ranking 11th out of 27 importers.

While exports to Asia have weakened, Kazakhstan has sharply ramped up domestic oil production. In late January 2025, trial operations began at the long-anticipated Third Generation Plant at the Tengiz field, which accounts for nearly one-third of the country’s total oil output. Once fully operational, the facility is expected to boost Tengiz production by an additional 12 million tons annually. In 2024, the field produced 28.9 million tons.

Thanks to this expansion, Kazakhstan’s oil production rose 7.4% in Q1 2025 to 24.6 million tons. Following this major development, the Ministry of Energy reaffirmed its forecast for total 2025 production to reach 96.2 million tons, nearly a 10% increase from the 87.7 million tons produced in 2024.

Despite commitments under the OPEC+ agreement, which aims to stabilize global prices by capping output, Kazakhstan has consistently exceeded its production quotas. The Ministry of Energy has pledged to offset overproduction and honor its obligations, but mounting pressure from OPEC+ suggests a growing rift. In early May, OPEC+ members agreed to increase oil production in June, repeating a similar decision made in April. According to Bloomberg, the move was partly driven by Saudi Arabia’s frustration with countries like Kazakhstan and Iraq repeatedly breaching quotas. The increased production is seen as a form of financial pressure amid falling oil prices, intended to penalize noncompliant members by straining their revenues.

Kazakhstan’s top 10 export items, excluding oil

In addition to oil, export revenues declined for three other commodities in Kazakhstan’s top 10. Cathode copper, ranked No. 2, brought in $770.6 million, down 15.3% YoY. Despite a 10.8% increase in global copper prices, reaching $9,300 per ton, Kazakhstani producers reduced cathode copper smelting by 14.5% to 104,700 tons. As a result, export volumes fell 20% to 88,800 tons.

During the reporting period, revenues also declined for other distillates (down 10.2% to $179.6 million) and flour (down 10.2% to $118.5 million).

Table 1: Kazakhstan’s top 10 export products, Q1 2025
Source: Kursiv Research estimates, based on data from the Bureau of National Statistics

Notably absent from the top 10 in Q1 2025 were uranium exports, which had provided the country’s highest solid mineral export revenue the previous year. In Q1 2025, uranium exports totaled just $72.5 million, an 84% drop, placing the commodity at No. 27 by revenue, compared with No. 4 a year earlier. A production report from the national nuclear company Kazatomprom for the latest quarter explains the shift. Although uranium production rose 11% to 5,600 tons, sales fell 7% to 2,600 tons.

The company attributed the decrease to its entry into new markets and said it expects uranium exports to rebound. Kazatomprom signed its first contracts to supply natural uranium concentrates to Switzerland’s Beznau and Leibstadt nuclear power plants under agreements with Axpo Power AG and Kernkraftwerk Leibstadt AG. The company also signed a separate deal with the Czech energy firm CEZ Group.

«The supply of Kazakh natural uranium concentrates in the next seven years can cover approximately one-third of uranium needs for Westinghouse-manufactured fuel assemblies for the Temelín nuclear power plant,» Kazatomprom stated in the report. «The agreement enhances the energy security of the Czech Republic and supports the plant’s role in providing clean and sustainable energy.»

Meanwhile, six of the top 10 export categories saw strong growth. Exports rose for copper ores and concentrates (up 0.8% to $651.1 million), high-carbon ferrochrome (up 1.8% to $440.2 million), soft wheat (up 30.4% to $319.7 million), natural gas (up 156.4% to $229.2 million), raw zinc (up 10.7% to $146.2 million) and sunflower oil (up 73.3% to $131.9 million). Natural gas exports posted the largest absolute increase, with revenues up by $139.8 million.

Kazakhstan’s top 10 fast-growing export items

Kursiv Research regularly compiles a ranking of Kazakhstan’s fastest-growing export goods, helping to identify early-stage growth areas and potential future export leaders. The methodology focuses on products with export revenues exceeding $25 million during the reporting period, filtering out unstable or low-volume contracts. From that group, the items with the highest relative YoY growth are selected.

In Q1 2025, turbojet engines with thrust exceeding 25 kilonewtons (kN), typically used in passenger aircraft, posted the fastest growth. This trend, seen in previous surveys, is largely attributed to re-export operations linked to airline leasing agreements.

Table 2: Kazakhstan’s top 10 fast-growing export items, Q1 2025
Source: Kursiv Research estimates, based on data from the Bureau of National Statistics

Among the top 10 fast-growing items are natural gas and sunflower oil, both of which also ranked among Kazakhstan’s largest exports during the quarter. The remaining seven items are all agricultural products, showing a strong surge in demand:

• Other sunflower oil fractions: up 166.9% to $39.1 million.
• Animal feed: up 165.8% to $91.6 million.
• Barley: up 156.3% to $110.5 million.
• Solid sugar: up 132.0% to $37.1 million.
• Flax seeds: up 118.5% to $84.9 million.
• Lentils: up 99.1% to $27.7 million.
• Sunflower seeds: up 77.9% to $36.8 million.

Growth in most of these agricultural exports was driven by increased demand from existing markets. China significantly boosted imports of animal feed, sunflower oil fractions, flax seeds and sunflower seeds. Uzbekistan continued to expand purchases of sugar, while Turkey increased imports of lentils. Additionally, Kazakhstan is now supplying sizable quantities of barley to Iran and lentils to Italy and the United Arab Emirates, markets that previously had little to no imports.

Kazakhstan’s major export destinations

Kursiv Research also monitors Kazakhstan’s key export destinations: the European Union (EU-27), China, the Eurasian Economic Union (EEU) and Central Asia. Among them, the European Union remains Kazakhstan’s most stable export market, largely due to consistent energy shipments.

In Q1 2025, Kazakhstan’s exports to the EU totaled $8.4 billion, a 2.4% decline YoY. Crude oil made up 88.7% of the total. Although the EU increased its import volume of Kazakh oil by 5.2% to 13.6 million tons, it wasn’t enough to offset a 7.3% drop in oil prices.

Table 3: Kazakhstan’s top 10 export destinations, Q1 2025
Source: Kursiv Research estimates, based on data from the Bureau of National Statistics

Exports to China fell sharply, down 21.3% to $2.5 billion. Despite the overall decline, eight of Kazakhstan’s 10 largest exports to China showed positive trends:

• Copper ores and concentrates: up 13.0% to $642.3 million.
• High-carbon ferrochrome: up 4.7% to $264.2 million.
• Natural gas: up 193.2% to $210.9 million.
• Raw zinc: up 189.2% to $129.5 million.
• Animal feed: up 177.1% to $88.7 million.
• Zinc ores and concentrates: up 194.5% to $74.4 million.
• Fuel assemblies: up 1.1% to $86.4 million.
• Sunflower oil: up 140.6% to $64.8 million.

However, the additional $453.5 million in revenue from these fast-growing categories was not enough to make up for sharp declines in oil exports (down $827 million) and cathode copper (down $265 million).

Kazakhstan’s exports to countries in the EEU have been declining over the past two years, and the trend continued in Q1 2025. Total exports to EEU member states fell 11.3% YoY to $1.9 billion, driven by reduced shipments to Russia and Belarus.

Exports to Russia, which accounts for 81% of Kazakhstan’s trade with the EEU, fell to $1.6 billion, a 17.3% decline. Exports to Belarus also dropped, down 4.1% to $35.1 million. In contrast, trade with other EEU members grew: exports to Kyrgyzstan increased 32.7% to $341.9 million, while exports to Armenia rose 30.9% to $4.4 million.

Despite the overall drop, eight of the top 10 Kazakh export items to Russia posted YoY gains:

• Aluminum oxide: up 27.8% to $100.6 million.
• Hot-rolled flat products over 10 mm thick: up 22.5% to $71.1 million.
• Galvanized flat products: up 0.5% to $60.7 million.
• Cold-rolled flat products over 3 mm thick: up 13.4% to $54.2 million.
• Raw gold: up 45.5% to $46.1 million.
• Coal: up 23.8% to $34.4 million.
• Hot-rolled flat products under 3 mm thick: up 29.7% to $29.4 million.
• Polypropylene: up 15.0% to $26.8 million.

However, exports of two key items fell sharply:

• Non-sintered iron ores and concentrates: down 32.3% to $32.7 million.
• Sintered iron ores: down 48.0% to $32.3 million.

Notably, uranium, typically one of Kazakhstan’s largest export items to Russia, was absent from the top exports list for Q1 2025. Customs data recorded no uranium shipments during the quarter, compared to $195.6 million in Q1 2024.

Kazakhstan’s exports to Central Asian countries grew 19.3% in Q1 2025, reaching nearly $1.5 billion. Three of the four countries in the region posted double-digit increases:

• Kyrgyzstan: up 32.7%.
• Tajikistan: up 17.4%.
• Uzbekistan: up 16.9%.
• Turkmenistan: up 0.5%.

Uzbekistan remained Kazakhstan’s largest trade partner in the region, accounting for more than half of total exports. Nine of the top 10 export items to Uzbekistan posted gains, including:

• Soft wheat: up 9.5% to $150.9 million.
• Flour: up 1.7% to $31.6 million.
• Sunflower oil: up 64.1% to $47.2 million.
• Hot-rolled flat products under 3 mm thick: up 45.5% to $18.3 million.
• Flat-rolled products with notches: up 575.4% to $33.0 million.
• Solid sugar: up 144.3% to $27.3 million.
• Other fractions of sunflower oil: up 109.8% to $21.2 million.

Two new product categories emerged in Q1 2025, with exports starting from zero: semi-finished iron and steel products ($24.4 million) and light distillates ($21.7 million). The only decline was in other medium and heavy distillates, which fell 41.0% to $14.3 million.