Uzbekistan processes Afghan crude: strategic energy cooperation

Uzbek refiner Saneg begins processing Afghan crude oil at its Fergana refinery, a move designed to alleviate Afghanistan's energy shortages under Taliban rule.

Share:

Raffinerie de Fergana, Ouzbékistan

Uzbekistan, through its refiner Saneg, has initiated the refining of crude oil from Afghanistan, marked by the launch of the first cargo transported by rail from the Hairatan terminal.
This development takes place against the backdrop of an acute energy crisis in Afghanistan, amplified by supply difficulties, notably from Iran and Turkmenistan.
The Taliban government, without formal international recognition since 2021, is seeking to restart local oil production in order to reduce its dependence on fuel imports.

A Partnership with Many Stakes

Saneg agrees to process Afghan crude at the Fergana refinery, a facility designed in Soviet times to handle various types of crude oil, including that with a high sulfur content.
Afghan crude, mainly extracted from blocks in the Amou-Daria basin, is an under-exploited resource due to the lack of refining infrastructure on Afghan soil.
By processing this crude, Uzbekistan not only strengthens its domestic diesel production capacity, but also offers the Afghan authorities a temporary solution to their energy crisis.
The refining agreement represents one of the first cross-border collaborations for Afghan crude oil, despite the historically complex relations between the two countries.
In the absence of official recognition of the Taliban by the international community, these energy cooperation initiatives testify to the Kabul government’s attempt at regional reintegration.

Technical and strategic challenges

The project presents technical challenges related to crude quality and refining capacity.
The high sulfur content of Afghan crude requires adjustments to the treatment process at the Fergana refinery.
In addition, economic sanctions against Afghanistan complicate the implementation and sustainability of this agreement.
Nevertheless, for Uzbekistan, the processing of this crude offers an opportunity to diversify its energy supply and strengthen its exports.
Other countries in the region, notably Russia and Kazakhstan, are exploring similar options to secure market share while indirectly supporting the Afghan economy.
This dynamic reflects the geopolitical repositioning efforts of Central Asian countries in the face of Afghanistan’s isolation on the international stage.

Regional implications and future developments

Saneg’s initiative to process Afghan crude is part of Uzbekistan’s wider strategy to optimize its refining capacities and exploit business opportunities in a volatile regional context.
The prospect of exporting refined products to Afghanistan offers an opportunity for additional revenue and energy support to a troubled neighbor.
However, political uncertainty and the fragility of bilateral relations could limit the long-term benefits of this partnership.
Other companies, such as those based in Russia, have expressed interest in similar arrangements.
Increased cooperation could potentially stabilize energy supplies in the region, while representing a pragmatic response to the international sanctions and internal challenges facing Afghanistan.

Several international agencies have echoed warnings by Teresa Ribera, Vice-President of the European Commission, about commercial risks related to Chinese competition, emphasizing the EU's refusal to engage in a price war.
The European Bank for Reconstruction and Development lends €400 million to JSC Energocom to diversify Moldova's gas and electricity supply, historically dependent on Russian imports via Ukraine.
BRICS adopt a joint financial framework aimed at supporting emerging economies while criticizing European carbon border tax mechanisms, deemed discriminatory and risky for their strategic trade relations.
The European Commission is launching an alliance with member states and industrial players to secure the supply of critical chemicals, amid growing competition from the United States and China.
Trade between Russia and Saudi Arabia grew by over 60% in 2024 to surpass USD 3.8 billion, according to Russian Minister of Industry and Trade Anton Alikhanov, who outlined new avenues for industrial cooperation.
Meeting in Rio, BRICS nations urge global energy market stability, openly condemning Western sanctions and tariff mechanisms in a tense economic and geopolitical context.
Despite strong ties, Iran's dependence on oil revenues limits its ability to secure substantial strategic support from Russia and China amid current international and regional crises, according to several experts.
Egypt’s Electricity Minister engages in new talks with Envision Group, Windey, LONGi, China Energy, PowerChina, and ToNGWEI to boost local industry and attract investments in renewable energy.
The potential closure of the Strait of Hormuz places Gulf producers under intense pressure, highlighting their diplomatic and logistical limitations as a blockage threatens 20 million daily barrels of hydrocarbons destined for global markets.
Budapest and Bratislava jointly reject the European Commission's proposal to ban Russian energy supplies, highlighting significant economic risks and a direct threat to their energy security, days ahead of a key meeting.
Libya officially contests Greece's allocation of offshore oil permits, exacerbating regional tensions over disputed maritime areas south of Crete, rich in hydrocarbons and contested by several Mediterranean states.
Hungary, supported by Slovakia, strongly expresses opposition to the European Commission's plan to phase out imports of Russian energy resources, citing major economic and energy impacts for Central Europe.
Israeli military strikes on Iran's Natanz nuclear site destroyed critical electrical infrastructure but did not reach strategic underground facilities, according to the International Atomic Energy Agency (IAEA).
The French president travels to Nuuk on 15 June to support Greenlandic sovereignty, review energy projects and respond to recent US pressure, according to the Élysée.
Kazakhstan has selected Rosatom and China National Nuclear Corporation to build two nuclear power plants totaling 2.4 GW, a decision following a favorable referendum and coinciding with Xi Jinping’s upcoming strategic visit.
Israeli strikes against Iranian nuclear sites disrupt US-Iranian talks on the nuclear deal. Tehran now considers canceling the upcoming negotiation round in Oman, heightening regional economic concerns.
Facing alarming breaches of uranium enrichment thresholds by Iran and explicit existential threats, Israel launches targeted military strikes against Iranian nuclear infrastructure, escalating regional tensions dramatically.
The Kremlin has confirmed that Vladimir Putin aims to help resolve the nuclear dispute between the United States and Iran, leveraging strengthened strategic ties with Tehran.
President Lee Jae-myung adopts an energy diplomacy rooted in national interest, amid a complex international landscape of rivalries that could create challenging situations for the country and its energy businesses.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.