CASPIA presents an interview with the Kazakh economist and expert, Rakhim Oshakbayev.

– How do you assess the current state of the EAEU amid geopolitical turbulence and sanctions pressure?

-The EAEU has arguably proven to be one of the most timely integration projects in modern history. When the union was created, few could have foreseen the scale of external shocks the region would face between 2022 and 2026: unprecedented sanctions, disrupted supply chains, and distorted market signals amid significant geopolitical shifts. This period highlighted the true value of an already established framework: existing infrastructure, unified trade rules, and coordination between member states helped mitigate the impact of external instability.

All participants benefited, albeit to varying degrees. For Russia, integration provided diversification of logistics and trade routes during the sanctions period, which was critical to sustaining foreign trade and industrial production. For smaller economies—Armenia and Kyrgyzstan—the EAEU became a powerful driver of economic growth: Armenia recorded double-digit GDP growth in 2022–2023, and Kyrgyzstan significantly increased budget revenues, enabling improvements in social programs and infrastructure. Kazakhstan maintained flexible foreign trade links that would have been impossible without a unified customs space and coordinated policies.

Today, the primary task is to protect the four freedoms already achieved: the movement of goods, capital, services, and labor. These principles are currently under threat amid growing external fragmentation. The EAEU is not a fully independent economic center in the Western sense—it lacks a single currency, a unified foreign policy, and a centralized capital market regulator. Nevertheless, as a trade and logistics framework, it has proven its effectiveness. The question of deeper integration is not yet on the agenda, but the fact that the union has mitigated negative external shocks in recent years deserves high recognition.

– How does the Iran crisis affect the resilience of the North–South Transport Corridor?

-The conflict around Iran is still evolving, and assessing its impact on logistics must account for scenario uncertainty. However, several structural effects are already evident and cannot be ignored.

First, the situation exposed the vulnerability of all active routes simultaneously. The Suez Canal is partially closed due to tensions in the Red Sea, the Strait of Hormuz is under potential Iranian control, and the Persian Gulf is effectively blocked. According to Sea-Intelligence, around 204,000 TEU of container capacity are stuck in the Persian Gulf, creating a severe shortage of empty containers in Asia and further destabilizing the Asia–Europe market.

Second, Iran’s exit from the conflict with strong negotiating positions fundamentally changes the landscape. Iran now effectively controls key maritime arteries, and any transit routes through its territory will reflect Iranian interests rather than bypass them. The North–South Transport Corridor via the western Caspian coast (through Azerbaijan) operates relatively stably. Iranian Caspian ports—Bandar Anzali and Amirabad—remain operational, although Israeli strikes on civilian infrastructure set precedents for risks even along this route.

Third, routes developed in alignment with Iran’s interests and through dialogue with Tehran have real long-term prospects. The “3+3” format (South Caucasus countries plus Russia, Iran, and Turkey) envisioned a regional solution without an external arbiter. Today, this approach appears even more relevant.

– Can the Caspian route through Azerbaijan and Kazakhstan replace Iranian logistics?

-This is not a question of replacement but of parallel development. All three North–South Transport Corridor routes—the western (through Azerbaijan), eastern (through Kazakhstan and Turkmenistan), and maritime (across the Caspian)—should develop simultaneously and complement each other.

The western route through Azerbaijan is currently the most developed and heavily used. It functions but faces capacity limits at the junction with the Iranian railway network. The eastern route via Kazakh ports Aktau and Kuryk is actively developing but still lags in volume compared to the western corridor.

The main “bottleneck” of the maritime route is the limited draft at the Volga River mouth, which Russia is attempting to address through dredging. For Kazakhstan, this route is strategically important but requires coordination with Russian and Iranian infrastructure. The ultimate prospects of all routes will depend on the outcome of the Iran conflict and the ability of regional players to reach agreements without an external mediator.

– Do you see a risk of long-term rerouting in favor of alternative corridors?

-This is not a risk but a natural and healthy market response. The current crisis has shown that no active route is absolutely reliable: the Suez Canal is vulnerable via the Red Sea, the Panama Canal suffers from drought, and the Strait of Hormuz is at risk of closure. Diversification is not optional; it is necessary.

We are already observing concrete shifts. According to CEVA Logistics, total rail and road freight volumes between Asia and Europe grew by about 15% year-on-year. DHL reports a notable increase in demand for overland routes. Chinese forwarders have raised container allocation fees for China–Europe rail services by $1,000 per container.

The long-term trend is clear: increasing turbulence will drive investment in alternative infrastructure—new pipelines, rail corridors, and port capacities. Kazakhstan and the broader Central Asian region are in a strong position as a transit hub capable of offering routes independent of geopolitically unstable chokepoints.

– How competitive is the Middle Corridor compared to northern and southern routes?

-Today, the Middle Corridor (Trans-Caspian International Transport Route, TMTM) is more than a transit artery—it is a strategic initiative attracting significant political attention from all participants. Its potential is about 200,000 containers per year, while the Northern Route through Russia can handle 1.5–2 million TEU with growth. Thus, the Middle Corridor does not compete with the northern route in volume but becomes vital under sanctions and geopolitical risks.

Data from JSC “OTLK ERA” show that TMTM cargo volumes grew from zero in 2022 to 36,247 TEU in 2024 and 41,465 TEU in 2025—an increase of more than tenfold in three years. Its share in OTLK ERA transit reached 11.7% in 2025 versus 0% in 2022.

The main competitive advantage of the Middle Corridor is reliability. In logistics, reliability often outweighs speed and cost. The ability to use a route independent of Russian infrastructure makes it strategically valuable. Kazakhstan actively invests in development: ports Aktau and Kuryk are being expanded, and rail infrastructure modernized. This confirms that TMTM is growing as an independent and resilient corridor.

– How is the structure of Chinese investments in Central Asia shifting under the Belt and Road Initiative?
Amid escalating US–China competition, Chinese investment strategies in Central Asia are becoming increasingly diversified, pragmatic, and well-planned. China is focusing on several key areas: extraction of rare earths and strategic raw materials, logistics infrastructure, agriculture, and fertilizer production.

The current crisis has clearly demonstrated the vulnerability of global supply chains—including helium, urea, and electronic components—prompting China to invest more in local production closer to raw materials and transport corridors.

It is important to note that not all countries benefit equally from Chinese involvement. The greatest gains accrue to those integrated into Chinese logistics and production chains while maintaining sovereignty and debt control. Chinese investments per se do not pose a threat—the risk arises from irresponsible borrowing without repayment capacity. This problem lies with borrowers, not China.

– Is China shifting focus from energy to logistics and industry? Who benefits most?
China has long moved beyond pure energy partnerships in the region. It is becoming a key technological and logistical player. Advances in drone technology, industrial AI applications, electric vehicles, and agricultural machinery reflect Chinese leadership surpassing the US, Europe, Japan, and South Korea in many sectors.

The greatest beneficiaries are countries embedded in Chinese production and logistics chains without losing autonomy. Kazakhstan is in a very favorable position: a convenient geographic location, rich resources, and developed transit infrastructure. OTLK ERA data show that transit cargo through Kazakhstan in 2025 totaled $39.5 billion. The largest categories—electronics and communication equipment (19.4%), machinery and computers (17.5%), automotive (12.9%)—mostly Chinese exports transiting Kazakhstan.

– How realistic is deeper economic integration within Central Asia without external powers?
Integration in Central Asia is more than feasible. A persistent myth suggests China, Russia, and the US fiercely compete for influence, blocking regional integration. In practice, this is not the case. The real obstacles are internal rigidity, imperfect regulatory practices, fragmented customs procedures, and insufficient trade digitalization.

A very positive development is Azerbaijan’s effective involvement in the C5+1 format, turning it into a “5+1” or even “C6.” Ideally, the macro-region should unite all Caspian littoral states—including Iran—and potentially Afghanistan and Pakistan. Modern technologies—digitalization, AI, data exchange platforms—allow integration faster than 20 years ago. Political will + professional administration + digital tools = realistically achievable integration.

– Can the C5+1 region develop its own integration agenda independent of Russia, China, and the West?

-Yes, the formation of an independent agenda in Central Asia is already underway. Regular summits of the “five,” intensive discussions on trade, transport, water, and energy—these are reality, not just statements.

Independence does not mean isolation. It implies the ability to define priorities and defend them in negotiations with any partner. Governments must work seriously: harmonize regulatory regimes, remove non-tariff barriers, mutually recognize standards. Digitalization and connected technologies make this feasible within reasonable timeframes.

– What barriers constrain trade growth between Azerbaijan and Kazakhstan?

-Azerbaijan and Kazakhstan are specialized economies with high oil and petroleum exports. Hence, trade diversification requires targeted efforts. Kazakh consumer and agricultural goods should be promoted in Azerbaijan, and Azerbaijani industrial and processed products in Kazakhstan.

Practical measures include regular interregional forums and fairs, preferential business regimes, trade missions, and permanent business platforms. Caspian transport connectivity is already a competitive advantage and must be filled with real commodity flows.

– How important is port infrastructure synchronization on the Caspian? Can energy become an integration driver?

-Port infrastructure and data exchange on the Caspian are bottlenecks, solvable with political will and professional execution. Kazakhstan is actively expanding Aktau and Kuryk ports. Infrastructure deficits exist but are being addressed.

The key principle is the concept of “smart connectivity”: not just physical infrastructure but data synchronization, electronic documentation, and reduced downtime. Most delays on the Middle Corridor occur not due to physical capacity but imperfect customs legislation and paperwork. Digitalization is the fastest and most cost-effective way to increase route competitiveness.

Energy, including renewable sources and electricity supply, can become an independent integration driver. The current energy crisis in Southeast Asia has heightened interest in renewables, where China is a global leader, and Kazakhstan has significant potential.

– Are rising oil prices a short-term factor or a long-term trend? What dividends does Kazakhstan gain?

-The recent oil price spike is primarily a situational response to disrupted logistics through the Strait of Hormuz and the Red Sea. After the ceasefire announcement, prices immediately adjusted, confirming the short-term nature.

Nevertheless, even after routes normalize, the effects of prior disruptions will linger: accumulated deficits, broken supply chains, weakened infrastructure. For Kazakhstan, high prices replenish the budget and National Fund but do not remove the need for economic diversification. On the contrary, the crisis highlights the vulnerability of countries reliant on a single commodity export and stimulates interest in local energy self-sufficiency and renewables.

– Is the US decision to release strategic oil reserves a political tool or an economic stabilizer?

-It is more of a situational anti-crisis measure that does not provide a systemic solution. Release of strategic reserves may temporarily smooth price spikes but does not address structural causes of volatility—route disruptions, vessel shortages, geopolitical uncertainty.

The political dimension is clear: the move is timed with negotiations, demonstrating Washington’s influence on the market. But resources are limited, and structural imbalances are not resolved administratively. Eventually, the market will revert to fundamentally justified price levels.

– Is a new economic map of Eurasia forming? What role will Kazakhstan play?

-A new economic map of Eurasia is forming in real time. Final contours will become clear after major conflicts conclude: in Ukraine, the Middle East, potential escalation in South Asia, and tensions around Taiwan.

Several trends are already clear. The center of economic growth is shifting to Southeast Asia. Eurasia, particularly Central Asia, is transitioning from a transit “buffer” to a self-sufficient macro-region with a growing population, favorable demographics, and internal demand.

Kazakhstan occupies a favorable position: the geographic center of Eurasia, a transit hub between China and Europe, with developed logistics and resources. OTLK ERA data show that total cargo volumes in 2025 reached 711,000 TEU—a record for the company—exceeding strategic targets. Even when China–EU transit fell 17.7% to 353,600 TEU, Kazakhstan strengthened its role.

The region deserves optimism—based on fundamental advantages: geography, resources, young population, and an already established institutional base. This optimism should be well-founded, not naive.