BAKU, Azerbaijan, March 28. Kazakh exporters intend to continue rail shipments of crude oil to Uzbekistan this year, Trend reports citing the Argus Media report.
According to the report, the ability of oil suppliers from the Caspian region to transit through Russian ports may be significantly limited by sanctions [against Russia]. In this regard, exporters are considering alternative routes.
One such alternative route for Kazakh oil exporters could be the railroad supply of raw materials to Uzbekistan, as well as to small refineries in the Central Asian countries.
“Theoretically, the Kazakh exporters can redirect part of the transit volumes by rail to Uzbekistan, but the volume of shipments in this direction is unlikely to exceed one-two million tons per year,” the report said.
The export of Kazakh crude oil to Uzbekistan in 2021 amounted to only about 50,000 tons compared to 459,200 tons a year earlier. Last year, Uzbekistan was mainly provided with batches of Kumkol oil, which was delivered from the Shagyr station in the south of Kazakhstan to the Akhunbabayev station near the Fergana refinery. These shipments accounted for nearly 35,500 tons, according to rail freight forwarders.
The main part of the volumes of Kumkol crude oil is delivered to the Shagyr station through a pipeline system, which allows optimize the transportation costs of exporters.
The cost of rail transportation of oil from Shagyr to Akhunbabayev station is estimated by market participants at $43-45 per ton using a private Kazakh fleet and taking into account the return of empty railway oil tankers.
Besides, in September last year, trading companies shipped 10,000 tons of Kazakh crude oil from the Makhambet station in western Kazakhstan to the Karaul-Bazar station, located near the Bukhara plant. The cost of transporting oil along this route is estimated at $85/ton.
Kazakh exporters expect to continue rail shipments of the crude oil to Uzbekistan this year, however Uzbek companies have refrained from buying Kazakh oil for supplies to local refineries since the beginning of the year.
“The Uzbek side is still coordinating the procurement budget for the current year, the parameters of such supplies and their balance,” the market participant noted.
The capacity of the railway terminal in Shagyr is estimated at 1.1 million tons per year. The complex is located approximately 50 km southwest of Shymkent.