Interview CASPIA with leading analyst of the National Energy Security Fund and expert at the Financial University under the Government of the Russian Federation, Igor Yushkov, about Kazakhstan’s decision regarding Naftogaz’s lawsuit against Gazprom, the reorientation of Russian oil and gas exports, and the consequences of the crisis around the Strait of Hormuz for global energy markets and China.

How would you comment on the news that the Kazakh side refused to enforce the decision of a Kazakh arbitration court in the Naftogaz lawsuit against Gazprom?

Kazakhstan took a rational position because joining the practice of seizing Gazprom’s assets would have led to negative consequences for all parties involved. At the same time, this is not directly about Kazakhstan’s legal system, since arbitration is a separate structure to which companies apply for relevant services, and it is not directly connected to Kazakhstan’s state judicial system.

It is not entirely clear why the Kazakh arbitration body took up this case in the first place, but it is obvious that Astana is not interested in negative consequences. Yes, Kazakhstan approaches cooperation with Russia cautiously, fearing secondary sanctions, but at the same time it is highly disadvantageous for it to seriously damage relations with Moscow.

If Kazakhstan’s judicial system had recognized the international arbitration ruling and transferred Gazprom’s assets in Kazakhstan to the Ukrainian Naftogaz, then Russian gas transiting through Kazakhstan to Uzbekistan could have been seized. In that case, Gazprom would most likely have stopped this transit — that is, ceased supplying gas into Kazakhstan’s gas transportation system.

This would have led to a gas shortage in Uzbekistan, especially during the heating season, when the country has an acute need for additional volumes. In the worst-case scenario, the situation could have taken on a humanitarian dimension, since there would not have been enough gas to supply apartment buildings. In other words, the consequences would have affected the entire region.

In response, Russia could have halted the transit of Kazakh oil through its territory, which would have directly harmed Kazakhstan itself. Most of the republic’s oil exports pass through Russia — both via the CPC system and through Transneft infrastructure, which pumps around 10 million tons of oil toward the Baltic and Black Seas.

Kazakhstan, in turn, could have blocked the transit of Russian oil to China. This would also have been problematic for Russia, since those volumes would then have to be redirected to maritime exports, significantly increasing costs. In other words, such escalation would have benefited no one. Therefore, Kazakhstan acted entirely pragmatically.

In addition, the arbitration ruling itself stated that for it to come into force, both parties needed to recognize the arbitration body. Gazprom is not a resident of this arbitration jurisdiction and does not recognize its authority. Most likely, Naftogaz filed the lawsuit understanding that it had a better chance of obtaining the desired decision in this arbitration forum than in Kazakhstan’s judicial system. At the same time, the case was probably aimed more at achieving a media effect than at actually recovering Gazprom’s assets.

How is Russia diversifying its oil and gas exports today, and who are the largest importers of its oil and gas products? How is pricing being formed in this context?

Since 2022, Russia has redirected its oil exports primarily toward Asian markets. Supplies to Europe remain only via pipelines, since on December 5, 2022, the EU banned maritime imports of Russian oil, and from February 5, 2023, petroleum products as well.

At present, pipeline deliveries of Russian oil to the EU effectively go only to Hungary and Slovakia. In addition, oil is supplied to Serbia, which is not a member of the European Union.

The main volumes were redirected to Asia. The largest buyers of Russian oil became China and India — together accounting for up to 90% of Russia’s seaborne oil exports. India periodically surpasses China in purchase volumes, although China remains the overall largest consumer of Russian oil.

Turkey is also a major importer. Oil from the Sakhalin projects is supplied to Japan and South Korea. As for petroleum products, from 2022 through the end of 2025, Turkey remains the largest importer. Significant volumes are also purchased by Brazil, Egypt, and North African countries. Subsequently, part of these petroleum products effectively ends up on the European market.

When Europeans point to signs of re-exporting, intermediary countries deny this, explaining that Russian petroleum products are used for domestic consumption, while their own production volumes are exported. However, since March, the EU has introduced a ban on imports of Russian petroleum products produced in third countries. The United Kingdom did not join these restrictions, since such measures create difficulties for exports from India, Turkey, and several other states. Nevertheless, Russia continues to find markets for both oil and petroleum products.

The situation with gas is much more complicated because transportation is constrained by infrastructure. After supplies to Europe were reduced in 2021–2022, Russia had to significantly cut production, since it is impossible to quickly redirect such volumes to alternative markets. Production declined by approximately 120–140 billion cubic meters compared to 2021 levels.

At the same time, the pricing system is also changing. If in Europe gas contracts are mainly linked to exchange indexes, in Asia prices are more often tied to oil prices.

Does Russia view Azerbaijan as a gas supplier for its southern regions?

Russia does not need gas supplies from Azerbaijan. On the contrary, it would prefer to supply gas to Azerbaijan because of excess capacity. If Azerbaijan has the opportunity to increase its gas exports to Europe, then negotiations could take place regarding Russian gas exports to Azerbaijan. 

How did the blockade of the Strait of Hormuz and the broader Middle Eastern crisis change the global logistics system for energy resources? What consequences did this have for China?

The crisis around the Strait of Hormuz led to the maximum utilization of existing regional oil pipelines that previously had not been fully used. For example, this concerns the oil pipeline across Saudi Arabia to the port of Yanbu on the Red Sea. A similar situation occurred in the UAE, where the oil pipeline to the port of Fujairah in the Gulf of Oman allows bypassing the Strait of Hormuz. Its design capacity is 1.8 million barrels per day.

During the war, operation of this route was temporarily suspended due to Iranian strikes, but supplies were later restored. Iraq also attempted to increase shipments through the Turkish port of Ceyhan, although difficulties arose in redirecting oil from southern fields. Against the backdrop of the effective halt of Iranian oil exports, China and India began purchasing more Russian Urals crude. Europe, meanwhile, increased imports of American oil. Consumer countries also quickly began using strategic reserves. An additional source covering the deficit was Russian oil stored in tankers because of previously low prices.

The average price of Russian Urals crude at the end of 2025 was around $39 per barrel, rising to $41 in January 2026 and $44 in February. According to Bloomberg estimates, up to 160 million tons of Russian oil were at sea during the crisis. For China, the consequences were especially sensitive. Beijing effectively lost access to a significant portion of Middle Eastern oil, including Iranian supplies, as well as Qatar LNG.

China compensated for part of the gas deficit by increasing coal consumption. In the oil sector, the situation proved even more interesting. For many years, China purchased oil not only for current consumption but also to fill strategic reserves — up to 1 million barrels per day were directed specifically for this purpose. Thanks to this, Beijing created substantial strategic stockpiles. It is unclear whether China began using these reserves fully, but it is known for certain that it stopped actively replenishing them. This alone helped stabilize the market.

At the same time, China increased imports of Russian oil but did not return to purchasing American energy resources. Imports of oil and gas from the United States were effectively halted after the start of the trade war in 2025. For China, this crisis became an important strategic lesson. Beijing saw how vulnerable maritime energy supply routes can be and how quickly critical volumes can be lost.

First, China faced restrictions on access to cheap Venezuelan oil, then to Iranian oil. As a result, Beijing concluded that as confrontation intensifies, the United States could deliberately create resource shortages for China.

This is pushing China toward closer energy cooperation with Russia and once again reviving the Power of Siberia 2 project, which is much harder to block compared to maritime supplies. The reliability factor in supplies is becoming increasingly important for China. It is possible that Beijing will intensify cooperation with Russia in the LNG sector, including participation in sanctioned projects, as well as in the development of gas pipeline infrastructure. Construction of new oil pipelines also remains possible.

Overall, China is increasingly thinking about how to structure its energy policy so that the United States cannot block its key transportation arteries at a critical moment.