Kazakhstan is in talks with Russia regarding the processing of Russian crude oil at more Kazakhstani refineries, with a portion of the finished product to be exported back to Russia, Kazakhstan’s Ministry of Energy said in a written response to Reuters. Kazakhstan’s Kondensat refinery is already processing Russian crude, and earlier this month the facility exported motor gasoline to Russia for the first time.
The talks are taking place against a backdrop of simultaneous disruptions in the oil sectors of both Russia and Kazakhstan. In July, Kazakhstan cut crude oil and gas condensate production by more than half following the suspension of exports via the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk — on July 26, output fell to approximately 1 million barrels per day, compared with an average of 2.16 million barrels in June. The CPC, through which more than 80% of Kazakhstani oil is exported, had suspended crude intake following a series of Ukrainian drone attacks on tankers near the terminal.
At the same time, Russia’s fuel market has faced a gasoline shortage due to refinery shutdowns following drone attacks and maintenance work. Due to Ukrainian strikes in 2026, by July 20 a total of 16 Russian refineries had fully or partially suspended processing, according to The Insider’s count. Additionally, the Russian business outlet Kommersant has noted that by July 20, refineries with a combined capacity of more than 45 million metric tons of oil per year had not yet resumed fuel sales on the St. Petersburg Exchange.
According to a Reuters assessment, by July 10 gasoline production in Russia was meeting roughly 65% of seasonal demand. The daily shortfall was estimated at 40,000–45,000 metric tons against consumption of 115,000–120,000 tons per day. Due to the shortfall, Russia was already cutting fuel supplies to Central Asian countries and looking for additional sources of petroleum products.
In its reply to Reuters, the Kazakhstani Ministry of Energy explained the talks by pointing to the need to ensure stable capacity utilization at the country’s refineries, as well as to preserve jobs and supply the domestic market with fuel. Kazakhstan’s authorities have stated that fully meeting the country’s own needs is a prerequisite for any possible deal.
The volumes and terms of supply, as well as the refineries that could process Russian crude, have not yet been determined. Commercial parameters, including delivery destinations and export volumes, are to be agreed upon by the market participants themselves, the Ministry of Energy noted.
Russia and Kazakhstan annually agree on quotas for duty-free petroleum product supplies. For 2026, the parties settled on deliveries from Russia to Kazakhstan of 285,000 metric tons of motor gasoline, 450,000 metric tons of diesel fuel, and 300,000 metric tons of jet fuel. These supplies fall under an exemption from Russia’s fuel export ban.
