Unkind coercion: Kazakhstan between Moscow, Beijing and the West

After the explosion at the CPC

Metal is tearing apart in the Black Sea at night. In the waters near Novorossiysk, an explosion occurs at the Caspian Pipeline Consortium marine terminal. On 11/29/2025, the VPU-2 remote mooring device suffers critical damage: it is recognized as beyond repair, tankers are diverted, loading is stopped [1]. Official formulations are cautious: terrorist attack, sabotage, security threat. The perpetrators are “not identified.”

On the maps, it looks like another episode of a major war. For Kazakhstan, everything is simpler and tougher. An explosion on one naval “piece of iron” suddenly exposes the structural truth: the country’s economy hangs on a few buoys near a Russian port [2].

CTC black box

The Caspian Pipeline Consortium is a cash register for Kazakhstan. About 80% of all Kazakh oil exports pass through it [2]. Tengiz, Kashagan, and Karachaganak are not pumping into a void: without the CPC, their flow would run aground on the shore, and then it would be either a tanker or a dead end.

The system is designed for three remote mooring devices. On paper, this is one hundred percent of the theoretical capacity. Formally, the loss of one buoy is minus a third. In real life, two usually work, the third is under repair or in reserve. After the explosion of VPU-2, Kazakhstan goes into “two out of two” mode, without an emergency exit. Any storm, accident, or another incident on any of the buoys instantly cuts the shipment by at least half, and in the worst case, puts it on pause.

The terminal operator politely writes that further work will depend on the “level of threat to personnel and shipping.” [1] The translation from bureaucratic to human: as long as something explodes near the buoys, no one will give a solid guarantee to either the insurer or the fleet.

Logistical thrombus

In government presentations, oil flows in even columns. In reality, a different diagram quickly appears near the damaged buoy - a queue of ships, rising insurance premiums, and shipowners who are crossing Novorossiysk off their routes. The status of a war risk zone turns insurance and freight into political weapons: the tanker market is already hitting Russian exports, depriving Moscow of more than $1,1 billion in export revenue every month. Now these same mechanisms are reaching Kazakhstan.

Even in a soft mode, when the two surviving VPUs are operating without interruption, the flow is no longer the same. Before the explosion, about six million tons of oil were pumped through the CPC per month, most of it Kazakh [3]. The loss of one buoy, according to energy analysts, cuts exports by at least a fifth and loses hundreds of millions of dollars in foreign exchange earnings every month. If insurance companies recognize the water area as a zone of military risk and a large fleet begins to bypass it, the “delay in shipment” will turn into a full-fledged blockade.

A pipe is not a warehouse, but a dead end.

In their speeches, officials like to talk about an "export corridor." It sounds as if there is a huge warehouse somewhere where you can wait out the storm. There is no such warehouse in the CPC. There is a limited tank farm by the sea and a pipe that either delivers oil to tankers or is clogged to the brim.

When shipments drop, the tanks fill up in a matter of days. Then the operators of Tengiz, Kashagan, and Karachaganak receive not an analytical memo but a simple order: cut off the flow or preserve the wells. On paper, this is a “temporary measure.” For high-sulfur fields, it is a risk of corrosion, restart difficulties, and accidents. What was sold for years as “unique world-class assets” suddenly turns out to be dependent on a few hoses in the Black Sea.

Budget and tenge on hunger rations

The oil and gas sector provides the lifeblood of Kazakhstan: up to a fifth of GDP and up to half of budget revenues, if taxes, rents and dividends are included [4], [5]. Every year the government plugs the holes with transfers from the National Fund: the pipe pumps - the fund fills - the budget receives money - pensions and salaries arrive on time [4].

When 80% of oil exports are tied to the route that has been started, this scheme is breaking down. Even a moderate drop in exports by a quarter is minus billions of dollars a year. Part of the volumes can be transferred via other routes, but these are more expensive tariffs, narrower capacities and additional political costs.

The national currency here is not a separate drama, but a continuation of the plot. The tenge is, in fact, tied to the oil flow. As long as there are enough dollars from exports, the National Bank plays with the exchange rate, propping it up with interventions. When the flow shrinks, the choice is primitive: either burn reserves and lose weight along with the National Fund, or let the exchange rate go and get a jump in prices. For a country that imports most medicines, equipment and some products, this does not mean a "macroeconomic correction", but queues at exchangers and very specific conversations in the kitchen.

The illusion of alternatives

In a moment of crisis, they always take out a map and start drawing arrows. Here's the pipeline to China. Here's the port of Aktau and the route to Baku. Here's the railway. On paper, Kazakhstan looks "untied" from Novorossiysk.

Physics is less optimistic. The oil pipeline to China has a design capacity of about 20 million tons per year and is already loaded [6], [7]. The Caspian route via Aktau and Baku provides a few million tons, while the CPC carries tens [3][8]. The railway is not designed for such volumes at all and is turning into an expensive and slow gesture of desperation.

A "lifeline" for Moscow India became the country where a significant part of Russian oil was transferred after European sanctions. There is no such India in Kazakhstan: an alternative buyer in the required volumes is not waiting around the corner, and an alternative route does not appear out of thin air. "Diversification" in its current form is not insurance, but complacency.

Social memory and political cost

Kazakhstan has already seen an economic trigger turn into a political explosion. January 2022 started with gas prices and ended with shootings and an “anti-terrorist operation.” The west of the country, where Tengiz and Karachaganak are located, became the epicenter of the protests.

If, after the explosion at VPU-2, shipments via the CPC remain under threat for a long time, this region will be the first to feel a new wave of impoverishment. Fewer changes, fewer bonuses, frozen projects, and at the same time more expensive products and loans. In the language of the reports, this is called "growing social tension." On the ground, it looks like people who no longer believe that the oil from their steppe works for their own families.

Who will pay for the explosion?

In public, Astana speaks with the utmost caution. Official statements record the fact of the explosion, condemn the attack on critical infrastructure, but do not name the perpetrators [1]. Formally, everything is correct, diplomatic. But this does not change the main thing: Kazakhstan found itself in the role of a passenger whose ticket has long been paid for, and the rails and tunnels are controlled by a neighbor.

There are several options left on the table. You can continue to pretend that the CPC is “purely economic” and pray that the next explosion will happen somewhere else. You can go deeper under the wing of Moscow or Beijing, hoping to buy at least temporary security guarantees and insurance. You can try to attract a Western “umbrella” over the CPC — in the form of investments in security, alternative routes and a fleet — and pay for it with part of the political maneuver.

In any case, the bill for one explosion has already been issued. They will pay not only with metal and concrete. The budget, the National Fund, tenge, and people who will withdraw less money from an ATM will pay. The only question is to whom Kazakhstan will ultimately pay the money for insuring its only sea outlet — and how much sovereignty will remain after payment.

Sources

[1] Reuters — Kazakhstan tells Ukraine to stop attacking CPC oil terminal

[2] Resonance — CPC's share in Kazakhstan's oil exports

[3] Reuters — Kazakhstan plans 12% increase in Caspian CPC oil exports

[4] OECD — Tax Policy Reviews: Kazakhstan 2020

[5] IMF — Republic of Kazakhstan 2024 Article IV Consultation

[6] Times of Central Asia — Russia seeks to boost oil transit to China via Kazakhstan

[7] Wikipedia — Kazakhstan–China oil pipeline data

[8] Kursiv / PortNews — Kazakhstan's Kashagan oil heads West to Turkey's Ceyhan port

Maurice K for Newsky © 2025