By Mokhidil Nizamova, UWED Doctoral Student
The potential cessation of Kazakh oil transit via the “Friendship” pipeline toward the Schwedt refinery in Germany represents not merely a technical alteration of transportation routes, but rather a contraction of one of the key access channels to the European market. Against the backdrop of existing dependence on Russian infrastructure and mounting sanctions pressure, this development further increases the vulnerability of Kazakhstan’s export-oriented commodity model and translates into significant socio-economic risks for the population.
Firstly, oil exports to the European Union are of strategic importance for Kazakhstan. The country ranks among the five largest oil suppliers to the EU, with transit flows predominantly routed through the territory of the Russian Federation. At present, transportation via Russian infrastructure remains more economically advantageous compared to alternative routes such as the “Middle Corridor” (the Trans-Caspian route through the Caspian Sea, Azerbaijan, Georgia, and Türkiye), which is more costly, capacity-constrained, and exposed to regional geopolitical risks. A potential suspension of deliveries through the “Friendship” route to Germany would reduce Kazakhstan’s flexibility in the European direction and may lead to a partial decline in export revenues if alternative capacities are not rapidly expanded.
Secondly, anti-Russian sanctions have already created a competitive and risk-prone environment for Kazakhstan in the European market. On the one hand, pressure on Russian exports opens a market niche that Astana seeks to occupy; on the other hand, reliance on Russian infrastructure increasingly functions as a geopolitical and economic leverage instrument, including the potential suspension of Kazakh oil shipments via Russian transit routes. The targeted disruption of one export corridor namely deliveries to Germany via “Friendship” heightens uncertainty for investors and market participants, increases the need for transit risk insurance, and raises logistical costs. This may result in reduced investment inflows into the sector and increased fiscal pressure, ultimately constraining the state’s capacity to finance social programs, infrastructure development, and employment policies.
Thirdly, the socio-economic effects on the population manifest through multiple transmission channels. The oil and gas sector accounts for a substantial share of export revenues and the tax base; therefore, any sustained reduction in export flows through economically efficient routes limits fiscal space for wage growth in the public sector, social transfers, and regional development programs. Kazakhstan exports nearly all of its crude oil production; consequently, export volumes and global prices directly influence macroeconomic dynamics and domestic demand. In the event of deteriorating external conditions, a slowdown in economic growth, rising unemployment in related sectors (logistics, services, infrastructure construction), and widening regional income disparities may occur.
Fourthly, these adverse effects may be mitigated if Kazakhstan accelerates the diversification of export routes and the structural transformation of its oil sector. In this regard, the following directions may be identified:
expansion of supplies via Caspian–Black Sea routes (CPC, BTC pipelines),
development of domestic refining and petrochemical industries, as well as increased exports to regional markets (Central Asia, China),
utilization of oil swap arrangements with the Russian Federation (oil deliveries to China in exchange for Russian volumes in Baltic ports).
However, in the short term, none of the alternative routes are capable of fully substituting the existing infrastructural linkage with Russia. Accordingly, a suspension of transit via the “Friendship” pipeline would likely result in an adjustment period characterized by elevated costs and increased risks to revenues and employment.
In conclusion, the scenario of suspending Kazakh oil transit via the “Friendship” pipeline would exert socio-economic impacts on Kazakhstan depending on the depth and duration of the restriction, the speed of alternative route expansion, and the effectiveness of state policy in supporting the industry and population. In the case of rapid adaptation and redirection of flows, the impact may be limited to short-term logistical and price shocks. In contrast, prolonged restrictions and weak diversification could lead to declining export revenues, increased fiscal pressure, and rising social tensions.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
