Kazakhstan eyes stable KEBCO crude exports until end-decade: executive

Kazakhstan sees exports of its Urals "lookalike" KEBCO crude remaining stable at around 10 million mt/year (200,000 b/d) for four-to-five years before domestic crude needs increase at the end of the decade, Bulat Zakirov, deputy chairman of state-owned KazMunayGaz, told Platts.

Kazakhstan launched the Kazakhstan Export Blend Crude Oil brand in 2022 to differentiate its oil from Urals after sanctions were imposed on Russia and its flagship crude grade over the invasion of Ukraine. The Central Asian country is effectively landlocked and relies on third-party infrastructure, with KEBCO delivered via Russia's Transneft pipeline system -- comingling with Urals -- through Russian ports, or directly to Germany.

The KEBCO export level indicated by Zakirov represents a small portion of Kazakh oil exports, which are mainly shipped as CPC Blend, a light sweet grade with its own pipeline to the Black Sea. Kazakhstan was the EU's third largest source of oil imports in 2023 and 2024, according to Eurostat. KEBCO shipments have been entirely to the EU or Turkey since 2023, according to S&P Global Commodities at Sea data.

The crude supplied by Kazakhstan into the Transneft system in fulfilment of KEBCO sales can vary in quality -- including light sweet volumes from fields such as Karachaganak -- but comingling in Russia means buyers receive crude of the same quality as Urals. Kazakh certificates of origin mean KEBCO cargoes are sanctions-free.

KEBCO volumes "will remain the same [10 million mt/year] with probably a slight, gradual decrease, in the next four-five years," Zakirov told Platts in recent communications.

Most of the KEBCO crude is currently exported via the Black Sea port of Novorossiisk, but more than 20% is sent via Ust-Luga on the Gulf of Finland, and 15% by pipeline to Germany, Zakirov added.

KEBCO prices have been supported by Europe's need for sour crude in the absence of Urals. KEBCO was last assessed by Platts at a $2/b premium to Dated Brent on May 27.

The volume of KEBCO shipments to Europe remains small by comparison with EU oil imports from Russia before the invasion, which were more than 3 million b/d. The trade has found acceptance among Western governments that have recognized Kazakhstan's reliance on exports and the risk of disruptions to the CPC pipeline -- a risk highlighted by a drone attack that badly damaged a CPC pumping station in February 2025.

Kazakhstan's KEBCO shipments were described as a "relief valve" by one observer close to the situation, who stressed the need to keep exports flowing given Kazakhstan relies on associated gas from its oil fields to generate electricity, especially in the west of the country.

On the portion sent to Germany's Schwedt refinery near Berlin -- now effectively under German government control due to sanctions on Russia's Rosneft – Zakirov said volumes were likely to reach 2 million mt this year, or an average of 40,000 b/d, up from nearly 1.5 million mt in 2024.

Germany sought to end its use of Russian crude after the invasion of Ukraine, and Schwedt draws its feedstock mainly from the Baltic ports of Rostock and Gdansk, but the use of KEBCO reflects the refinery's former reliance on Russian crude.

China exports

Kazakhstan remains heavily reliant on the CPC route to Russia's Black Sea coast, which has carried in excess of 1.5 million b/d since an expansion at the giant Tengiz field ramped up earlier this year. Alternative routes -- into western China by pipeline or across the Caspian Sea -- carry limited volumes, according to officials. A Kazakh export pipeline into China via the border town of Alashankou is used mainly for transit of Russian crude to China, with talks said to be underway on expanding these transit flows.

Zakirov said Kazakhstan was "interested" in a potential increase after Russian media quoted Deputy Prime Minister Alexander Novak as saying Moscow and Beijing were discussing raising transit volumes by 2.5 million mt/year (50,000 b/d).

This might require expanding a pipeline that skirts the Kazakh-Russian border bringing crude east from Russia's Urals region -- the Tuymazy-Omsk-Novosibirsk-2 (TON-2) pipeline -- officials have said.

Current shipments through the Kazakh pipeline to China total around 11 million mt/year (220,000 b/d), of which 10 million mt are Russian volumes. "There is spare capacity -- we can accommodate this 2.5 million mt," Zakirov said. "We're interested and we will be discussing."

Zakirov noted KEBCO exports could drop at the end of the decade as Kazakhstan plans to increase its refining capacity, the main focus being expansion of the 120,000 b/d Shymkent refinery, jointly owned by KazMunayGaz and China's CNPC, in southern Kazakhstan.

Many of Kazakhstan's legacy onshore oil fields are in decline, but the country could boost crude supply to its refineries with imports from Russia.

With plans afoot to liberalize the Kazakh fuels market, the country's refineries could be supplied not only from its onshore fields, but the "big three" fields that currently feed CPC Blend, Zakirov said.

The three giant fields -- Tengiz, Kashagan and Karachaganak -- "could also be a source, that's why the economics [need to] work for that," Zakirov said. "That's why we're talking about liberalization of the internal market."