Diversification and Insurance Policy: Experts on Caspian Oil Supplies via Baku

Kazakhstan has taken another step towards reducing its dependence on traditional oil export routes, as the first shipment of crude oil from the giant Kashagan field reached the Baku-Tbilisi-Ceyhan (BTC) pipeline at the end of January. In an interview with Kazinform, experts consider this move as part of a broader strategy to diversify transit options and hedge against geopolitical risks.

The initial shipment, totaling around 6,000 tons, was loaded onto a tanker at the port of Aktau on January 25 and arrived at the Sangachal terminal two days later. From there, it will be transported to Turkey and onward to international markets via BTC, in line with an agreement signed on January 15, 2025, between SOCAR Midstream Operations LLC and KMG Trading.

This shipment marks the beginning of a gradual increase in Kazakh oil transit through Azerbaijan. In March 2024, both countries agreed to raise supplies, setting an initial target of 2.2 million tons per year, up from 1.4 million tons in 2024. Experts predict that this figure will rise to 1.5 million tons in 2025, with long-term plans aiming for 20 million tons annually.

Azerbaijani economist and expert Anar Azizov views this milestone as a crucial event in the energy cooperation between Azerbaijan and Kazakhstan. He emphasized that since 2022, Kazakhstan has been focused on diversifying its oil export routes and will increasingly rely on Azerbaijan's infrastructure, including the BTC pipeline and potentially the underutilized Baku-Supsa pipeline.

"Expanding transit volumes will require a larger tanker fleet and enhanced logistical capabilities," noted Azizov. "Both countries are taking steps in this direction, and cooperation is likely to bring additional revenue to Azerbaijan through the Baku Shipyard."

Ilham Shabanov, head of the Azerbaijan Oil Research Center, highlighted the growing role of Kazakh oil in the overall capacity of the BTC pipeline. While the pipeline transported 5.3 million tons of oil in 2024, the volume of Kazakh oil transited through it increased significantly from 1 million tons in 2023 to 1.4 million tons in 2024. Shabanov stressed that the partnership between Azerbaijan and Kazakhstan strengthens Baku's position as an energy hub in the Caspian region.

Rauf Agamirzaev, a transport and logistics expert, described the transit of Kashagan oil via BTC as a historic event, emphasizing Kazakhstan's need to diversify energy export routes. He forecasted increased supplies of Kazakh oil through Azerbaijan, including via Turkish ports. He also pointed to the potential role of railroads in future energy transportation through Azerbaijan.

Energy expert Lada Evgrashina noted that while BTC enhances Kazakhstan's export flexibility, it remains a secondary route in the country's broader energy strategy. She pointed out challenges such as the high sulfur content in Kashagan crude, which requires blending or desulfurization, and infrastructure bottlenecks at the Aktau port. Nonetheless, BTC serves as an important "insurance policy" in Kazakhstan's efforts to reduce dependence on Russian transit routes, although its long-term success will depend on infrastructure modernization and cost optimization.