Kazakhstan mulls diversifying oil exports amid intensifying tensions with Russia

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Kazakhstan’s president Thursday ordered officials to find oil export routes bypassing Russia in a move that risks deepening tensions that have emerged between the two countries over Ukraine.

Kazakhstan has already seen two notable interruptions to its crude exports via a pipeline that unloads at the Russian Black Sea port of Novorossiysk in the months since Moscow sent troops into Ukraine in February.

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The route accounts for around three quarters of Kazakhstan's total oil exports and the stoppages have triggered speculation that the Kremlin might be punishing its Central Asian ally for its neutral stance on Ukraine.

A third interruption looked imminent earlier this week after a Russian court ordered a 30-day ban on unloading from the 1,500-kilometre (930-mile) pipeline from Kazakh oil fields to the Novorossiysk terminal, citing environmental violations.

An appeal lodged by the Caspian Pipeline Consortium that operates the pipeline has prevented the suspension taking effect for the moment, Kazakhstan’s energy ministry said Thursday.

At a government meeting, President Kassym-Jomart Tokayev said that a new route crossing the Caspian Sea was “a priority direction” and asked officials to “take measures to increase capacity” of sections of a pipeline taking crude to China, his office said.

Kremlin spokesman Dmitry Peskov said it was “unlikely” the court’s decision was politically motivated.”

“More contact with our Kazakhstan colleagues is needed,” Peskov said.

Tokayev earlier this week risked the Kremlin's wrath by pledging deeper energy cooperation with the European Union in a phone call with EU Council President Charles Michel as Brussels seeks alternatives to Russian oil.

Speaking at last month’s economic forum in Saint Petersburg where he was sharing the stage with Putin, Tokayev raised eyebrows by calling Russia-backed separatist entities in eastern Ukraine “quasi-states” and saying that Kazakhstan would not recognize them.

Restrictions on deliveries via the pipeline in March and June were blamed by the CPC on damage from storms and the threat of sea mines dating back to World War II respectively.

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