Tokayev`s special mission

On August 24, the President of Kazakhstan Kassym-Jomart Tokayev  paid a one-day official visit to Azerbaijan to discuss with  the President Ilham Aliyev issues of mutual interest amid the instability caused by the Ukrainian war.

"I have arrived with a special mission - to bring bilateral cooperation to a new level," Tokayev said in Baku.

The visit coincided with the Independence Day of Ukraine and the summit of the "Crimean Platform" of states in solidarity with Kyiv. The day before, Aliyev and Tokayev expressed support for the territorial integrity and sovereignty of Ukraine.

The one-day working visit may indicate that the Azerbaijani-Kazakh consultations that have been going on for some time have a certain result, which should be confirmed by the words and signatures of the heads of the two Caspian states. The success of the working consultations can be evidenced by the Order "Altyn Kyran" (Golden Eagle), which Tokayev presented Aliyev for special merits immediately upon arrival in the capital of Azerbaijan.

Information about the problems of transporting Kazakh oil to world markets, as well as growing trade and economic ties between Azerbaijan and Kazakhstan, suggests that the visit of President Tokayev is important in terms of three main aspects of creating conditions for increasing the transportation of Kazakh oil to world markets through the infrastructure of Azerbaijan, strengthening bilateral relations in order to develop efficient Asia-Europe logistics, expanding cooperation in various fields, including the economy, security, and culture.

Prior to Tokayev's visit, there was fourth failure in the oil pipeline of the Caspian Pipeline Consortium (CPC), transporting Kazakh oil through the Russian port of Novorossiysk to world markets. It is unlikely that  the accident was unexpected. In July of this year, the informed Tokayev instructed the government to develop alternative routes for exporting oil. According to experts, the accident in the port of Novorossiysk can be eliminated only by the spring of 2023, and this will limit the export of Kazakh oil from 67 million tons to 40 million tons per year. At the Russian Baltic port of Ust-Luga, Kazakhstan exports 2.2 million tons to Europe and almost the same to Azerbaijan. However, the Azerbaijani route, with appropriate measures, is able to increase transportation by several times. Some part of Kazakh oil can be received by the Baku-Tbilisi-Ceyhan (BTS) pipeline. The restrictions are because the Kazakh CPC Blend is a light sour oil, which, as a result of significant mixing, can reduce the quality of the Azeri Light brand, which is highly quoted on world markets.

However, it is possible to transport Kazakh oil via the Baku-Supsa pipeline (Georgian port on the Black Sea) with a capacity of 5 million tons of oil per year. The pipeline has already stopped transporting Azerbaijani oil and may switch to Kazakh oil. However, this will also require the consolidation of the tanker fleet and the intensification of the work of the terminals in the Caspian Sea of ​​the two countries.

It is possible that in the future the issue of building a Caspian oil pipeline Kazakhstan-Azerbaijan with further connection to the BTC may arise. For this purpose, a project is being considered for the construction of an oil refinery on the Kazakh coast of the Caspian Sea to purify Kazakh oil from sulfur impurities and bring it up to Azeri Light standards.

The second important issue  of particular importance for  both countries is logistics. Kazakhstan and Azerbaijan have already turned into transport hubs in Central Asia and the Caucasus. Statistics show an increase in the transportation of goods along the Silk Road route, and this factor is a priority in regional policy, as the heads of both states have repeatedly noted in their speeches.

In the first half of 2022, cargo transportation between Azerbaijan and Kazakhstan increased by 3.5 times compared to the same period in 2021.

In March of this year, in order to develop the Trans-Caspian International Transport Route (TITR), Azerbaijan, Kazakhstan and Georgia agreed to establish a joint venture. It will address the issues of end-to-end tariff setting, cargo declaration, application of unified IT solutions and consolidation of transit cargo.

The Government of Kazakhstan believes that this route can transport up to 10 million tons per year, including up to 200,000 containers.

Under these conditions, the growth of trade and economic ties becomes natural. According to the Ministry of Trade and Integration (MIT) of Kazakhstan, exports to Azerbaijan have increased significantly in the first half of 2022. During this time, the export of wheat increased  by 11.6 times, oil products - an increase by 2.7 times, electric railway locomotives - by 6.4 times, rail - by $ 7.5 million, waste and scrap of ferrous metals - by $ 5.3 million, mineral fertilizers - by $3.4 million.

In general, the trade turnover between the countries in the first half of the year increased by six times from $49.678 million in the first half of 2021 to the current $326.6 million.

Based on the common interests dictated by the new realities, we should expect further development and strengthening of Azerbaijani-Kazakh relations not only on a bilateral basis, but also within the framework of certain alliances, the main of which is the Organization of Turkic States, the activity of which has become in demand as a result of tectonic challenges on north and south of the Caucasus-Central Asia.

The next meeting between Aliyev and Tokayev can be expected on November 11 in Samarkand at the first summit of the Organization of Turkic States, preparations for which are in full swing. And the visit of the President of Kazakhstan in this case should be considered as a prelude to it.