Kazakhstan is discussing with Russia the possibility of processing Russian crude at Kazakh refineries and selling some of the resulting fuel back to Russia, Kazakhstan's Energy Ministry told Reuters. The ministry said the talks aim to ensure stable utilization of Kazakh refineries, preserve jobs, and supply the domestic market with fuel, with full coverage of Kazakhstan's needs as a priority condition for any potential deal.
Volumes, processing terms, and which refineries would handle Russian crude have not been determined. Commercial parameters, including shipment destinations, will be agreed by market participants independently, the ministry said.
One Kazakh refinery, Kondensat, already processes Russian crude and in July exported gasoline to Russia for the first time.
The talks come amid disruptions in both countries' oil sectors. In July, Kazakhstan more than halved its oil and gas condensate output after exports via the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk were halted. On July 26, production fell to about 1 million barrels per day from a June average of 2.16 million. The CPC, which handles over 80% of Kazakhstan's oil, stopped accepting crude after a series of attacks on tankers near the terminal.
At the same time, Russia's fuel market has faced gasoline shortages due to refinery shutdowns after drone attacks and maintenance. By July 20, 16 Russian refineries had fully or partially halted processing after strikes in 2026, according to The Insider. Kommersant reported that by July 20, refineries with a combined capacity of over 45 million tonnes of oil per year had not resumed fuel sales on the St. Petersburg International Mercantile Exchange. Reuters calculated that by July 10, Russian gasoline output covered about 65% of seasonal demand, with a daily deficit of 40,000–45,000 tonnes against consumption of 115,000–120,000 tonnes per day.
Against this backdrop, Russia has reduced fuel supplies to Central Asian countries and begun seeking additional sources of petroleum products. Moscow and Astana annually agree on quotas for duty-free fuel deliveries: for 2026, the sides agreed on Russian supplies to Kazakhstan of 285,000 tonnes of gasoline, 450,000 tonnes of diesel, and 300,000 tonnes of jet fuel. These deliveries are exempt from Russia's fuel export ban.