Iran’s oil exports have faced challenges due to a US blockade, but a crisis in Russian energy supplies may provide an opportunity for Iranian oil in Central Asia. Countries in Central Asia have started purchasing oil from Iran as their traditional Russian fuel supplies diminish amid ongoing Ukrainian attacks on Russian energy infrastructure.
In August, Tajikistan announced it was receiving oil and petroleum products from Iran due to uncertainties regarding its fuel supply from Russia. Tehran also agreed to establish a joint refinery in Kyrgyzstan and supply crude oil to the country.
Moscow is experiencing fuel shortages as a result of Ukrainian drone strikes on its refineries, which are part of the ongoing conflict with Ukraine. Central Asian nations like Tajikistan and Kyrgyzstan, which have historically depended on Russian oil, are now seeking alternatives. Tajikistan has sourced up to 80 percent of its petroleum products from Russia, while Kyrgyzstan relies on Russia for over 90 percent of its petrol.
Galiya Ibragimova, an expert on Central Asia, noted that these countries have been significantly affected by the crisis. Kyrgyzstan is part of the Eurasian Economic Union, a free trade bloc of former Soviet nations dominated by Russia, while Tajikistan has historically purchased discounted Russian fuel as a form of political loyalty.
Kazakhstan, which has three large Soviet-era oil refineries, has seen fuel prices rise by 15.6 percent this year. Uzbekistan, less reliant on Russian energy, is also diversifying its imports due to increased demand from neighbors.
Russia's fuel deficit has been exacerbated by Ukrainian strikes, which have reportedly reduced its oil refining capacity by 25 to 50 percent. In response, Russia has implemented fuel rationing and banned certain fuel exports. A state of emergency has been declared in Russian-occupied Crimea.
Despite acknowledging the crisis, Russian President Vladimir Putin has expressed reluctance to end the war in Ukraine, maintaining that the situation is manageable.
Tajikistan's Energy and Water Resources Ministry announced plans to receive 2.55 million tonnes of oil and petroleum products from Iran. Additionally, Iranian President Masoud Pezeshkian welcomed Kyrgyzstan's proposal for a joint refinery, with Iran supplying the necessary crude oil.
Iran's oil revenues have been impacted by the US blockade, with exports dropping significantly from two million barrels per day in March to around 740,000 barrels per day in July. Recent reports indicate that Iranian crude loadings have decreased further.
Analysts suggest that the Russian fuel crisis may provide Iran with short-term opportunities in Central Asia, although logistics and infrastructure favor Russia. Iran does not share borders with Tajikistan or Kyrgyzstan, making transport more complex.
Frederic Schneider, a senior fellow at the Middle East Council on Global Affairs, noted that the potential for Iran's success in Central Asia depends on the continuation of Ukrainian strikes on Russian refineries. He also highlighted that US sanctions could pose risks for Central Asian nations engaging in trade with Iran, although direct sanctions on these governments are considered unlikely due to geopolitical dynamics.
Overall, while Central Asia may offer a temporary outlet for Iranian oil, it cannot replace the larger Chinese market, and Iran must navigate its relationship with Russia carefully to avoid jeopardizing its strategic partnership.