Kazakh refinery deal could ease Russia’s front-line fuel pressure—but it covers just 0.3% of demand

Kazakhstan's private-owned Kondensat refinery has been processing Russian crude oil and sending about 70% of its output back to Russia, according to Kazakh Energy Minister Yerlan Akkenzhenov on August 25, as reported by Radio Liberty. This arrangement yields roughly 0.3% of the country's daily summer gasoline demand, making it a stopgap solution rather than a comprehensive fix.

John Roberts from the Atlantic Council noted that even small additional supplies could alleviate the acute shortage, but it won't solve the issue entirely. The Ukrainian drone strikes have disabled numerous Russian refineries, prompting Moscow to impose fuel export restrictions and rationing. Gasoline delivery caps were reinstated in Moscow and St. Petersburg in August, while Rosneft limited fuel fills to 30 liters per vehicle nationwide.

Kondensat has processed Russian oil previously, beginning in 2024 with Tatneft's TANECO refinery. However, Central Asia lacks the refining capacity to significantly impact Russia's situation, as Ukrainian energy analyst Hennadiy Riabtsev pointed out. Kazakhstan, Kyrgyzstan, India, China, and Belarus's potential contributions would remain insignificant for the Russian market.

Additionally, these prospective suppliers recognize the link between Russian fuel demand and the war effort, and they are wary of sanctions risks. Russia's fuel shortage has implications beyond gasoline shortages, affecting farming and public transport, with fuel-sale restrictions extending to over 40 regions as of July, according to Euromaidan Press.

Moscow's export limits have also driven up prices and constrained supplies across Central Asia. Nevertheless, Russia's increasing reliance on Kazakhstan provides the latter with more leverage. Prior Ukrainian strikes prompted Russian retailer Wildberries to expand its warehousing operations in Kazakhstan, and Astana has promoted domestic alternatives.