Germany is looking for oil for Druzhba

In 2024, Kazakhstan can increase pipeline supplies of oil through Russia to refineries in Germany to 2 million tons. This is 1.7 times more than the volume stipulated in the current contract. But, Kommersant’s interlocutors believe, the issue depends on the price of supplies, since Astana will have to withdraw additional volumes from other export destinations.

Kazakhstan has begun consultations with Germany on increasing oil supplies to the country’s refineries via the Druzhba oil pipeline in transit through Russia to 2 million tons in 2024. This was announced by the Minister of Energy of Kazakhstan Almasadam Satkaliev. “We currently have a request from the relevant German companies to increase the volume,” he noted. According to the current agreement between Kaztransoil and Transneft, the volume of supplies from Kazakhstan to Germany for 2024 is 1.2 million tons. Transneft told Kommersant that Astana did not contact the company with a request to increase transit. In 2023, Kaztransoil supplies to German refineries were at the level of 993 thousand tons.

In parallel, Kazakhstan is negotiating to increase shipments to Azerbaijan. The day before, representatives of the countries held negotiations on increasing the transit of Kazakh oil, including within the framework of an agreement on the annual transportation of 1.5 million tons of oil from Kazakhstan via the Baku-Tbilisi-Ceyhan pipeline.

Kommersant’s sources note that even if Kazakhstan increases supplies through Druzhba, these will be volumes redirected from other export destinations through Russia. At the moment, Kazakh oil is shipped through the facilities of the Caspian Pipeline Consortium in Novorossiysk (56.6 million tons in 2023), through the port of Ust-Luga (about 10 million tons) and through Druzhba. Kommersant’s interlocutors explain that Kazakhstan cannot simply increase supplies to Germany due to restrictions on its own production. Thus, in 2023, Kazakh companies supplied to Germany via Druzhba the volumes removed from shipments through Ust-Luga. At the same time, there is a technical possibility of increasing the supply of Kazakh oil via Druzhba, since previously about 20 million tons of Russian oil were supplied to Germany via this pipeline annually.

Last year, production in Kazakhstan, according to authorities, increased by 6.9%, to 90 million tons. Of this, 70.5 million tons were exported (an increase of 9.6%). At the same time, the country has committed to reducing oil production by 82 thousand barrels per day in the first two quarters of 2024 (to 1.47 million barrels per day). But, according to Almasadam Satkaliev, Astana does not yet intend to adjust the production forecast for 2024 at 90.3 million tons.

Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, agrees that increasing supplies from Kazakhstan to Germany via the pipeline, taking into account voluntary obligations to OPEC+, is possible only by redirecting volumes from Ust-Luga. But he doubts this development of events, since Astana has an established sales channel in the Baltic and contracts with traders, which the country is in no hurry to break. For Germany itself, the expert notes, it would be more profitable to receive oil through a pipeline, since then there is no need to pay for transshipment in Gdansk and transportation to the refinery, and there is also no need to compound the oil received through Druzhba, since it is initially of suitable quality. But, Mr. Yushkov believes, only an increase in price can convince Kazakhstan to increase supplies to Germany via pipe.

Olga Mordyushenko