Russian oil is under Western sanctions, and Germany turns to Kazakhstan

Mondo International Updated on 2024-02-01

The conflict between Russia and Ukraine has led to the imposition of an embargo on Russian oil by Western countries. Germany is one of Russia's main oil customers, but from this month, Germany announced that it would stop importing Russian oil. In order to guarantee oil **, Germany chose another Central Asian country - Kazakhstan. And Russia did not stop this move, but agreed to Kazakhstan to use its oil pipeline to export oil to Germany. Behind this, the relationship with China also has a certain impact.

Kazakhstan is a big oil country, and the oil industry is the backbone of its economy. However, due to its inland location and inconvenient transportation, Kazakhstan relies on Russian pipelines and ports for most of its oil exports. In the first five months of this year, Kazakhstan exported 28.75 million tonnes of oil, 97% of which went through Russia, according to the Ministry of Energy. This also makes Kazakhstan somewhat dependent on Russia and even affected by it.

Tensions between Russia and Ukraine escalated last year, with Western countries imposing a series of sanctions on Russia, including restrictions on its oil exports. This dealt a huge blow to Russia's economy and also affected its relations with European countries. Germany is one of Russia's largest oil customers, but under the pressure of the Russia-Ukraine conflict, Germany has decided to completely stop importing Russian oil starting this month. This has also caused difficulties for German oil**, especially some refineries in the east, which have had to reduce their production capacity due to a lack of raw materials.

In order to solve the problem of oil shortage, Germany began to look for other oil suppliers. Kazakhstan became Germany's first choice. Kazakhstan has high and low oil quality, and it has good political and economic relations with Germany. Kazakhstan's energy minister, Borat, said that Kazakhstan plans to export oil to Germany through Russia's "friendship" oil pipeline, and the first export is 20,000 tons, which will be implemented this month, and the move has been allowed by Russia. Kazakhstan aims to export 1.5 million tonnes of oil to Germany, up to 6 million tonnes if conditions allow.

Why did Russia agree to Kazakhstan borrowing its oil pipeline to export oil to Germany? It seemed like a loss-making deal, not only losing Germany as a big customer, but also helping a competitor. But in reality, Russia is not unprofitable, but has trade-offs. On the one hand, Russia can receive a certain amount of income from transit fees in Kazakhstan, which is also an important foreign exchange for Russia**. On the other hand, Russia is also making concessions in order to maintain its best relations with China.

China is the world's largest oil importer and an important partner of Russia. There are several oil pipelines between Russia and China, one of which is the Atasu-Alashankou pipeline through Kazakhstan. The pipeline is an important energy cooperation project between Russia and China, as well as the "lifeblood" of Kazakhstan's oil exports. Recently, Russia and China reached an agreement to extend the life of the pipeline by 10 years, until 2034. This means that Russia can continue to export oil to China through this pipeline, and Kazakhstan can continue to receive transit fees from it.

Russia's agreement to Kazakhstan to use its oil pipeline to export oil to Germany is also to ensure the stable operation of the pipeline and to avoid Kazakhstan's resentment or hostility towards it. Kazakh Tokayev has said that he wants to reduce dependence on Russia and look for other channels for oil exports. Last year, Kazakhstan and Azerbaijan were interested in signing an oil contract, planning to bypass Russia and send oil to Europe through other pipelines and ports. But this requires a lot of time and money, and Germany and other European countries are in dire need of oil, so Kazakhstan can only borrow Russian pipelines for the time being. Russia also did not want to lose Kazakhstan, an important neighbor and partner, so it agreed to this request.

In short, Russian oil was sanctioned by the West, and Germany turned to Kazakhstan, which is a complex international political and economic game. Russia, Kazakhstan, Germany and China all have their own interests and considerations, and they are all looking for the best solution. Oil is an important strategic resource and an important factor affecting international relations. In the future, oil cooperation and competition between these four countries will continue to develop and change.

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