Torn Between the EU and Russia: Kazakhstan’s Oil Dilemma

Written by | Friday, August 4th, 2017

Kazakhstan, who has joined OPEC and non-OPEC countries to curb oil output with the aim to prop up oil prices, has recently resented the remarks of Russian Energy Minister Aleksandr Novak, who called on oil producers to commit more to adhering to the output freeze deal. Kazakhstan is in a more difficult situation that other oil producing countries since it has been an avid Russian ally since the dismantlement of the USSR. However, the Caucasian country is also trying to solidify its political and commercial links with the European Union.

Since the Russian annexation of Crimea in 2014, Kazakhstan has been facing more internal divisions as the allusions about the Kremlin seizing north of the country have shifted from a rather unlikely to a somewhat plausible medium-threat. In 1989, Kazakhstan was 39% ethnic Kazakh, while now it is almost 70% due to higher birth rates among the Kazakhs and many Russians leaving.  Yet, ethnic Russians still make up about 25% of the country’s population and Astana needs to increasingly take into account the influences posed by having such a large ethnic Russian minority in the country. Given Kazakhstan’s rich ethnic make-up, Astana has always been trying to strike a delicate balance between Russia and the West.

Moscow’s call to Astana to decrease the oil production is another in a series of signs that Russia is exerting pressure on Kazakhstan. However, despite the moves to integrate the Kazakh economy with that of Russia, the EU remains to be Kazakhstan’s main economic and trade partner. Over the past 15 years, the EU has become the destination for 40% of its Kazakh exports while the Caucasian country has positioned itself as a major energy supplier to the bloc. Brussels also supported Kazakhstan’s membership in the World Trade Organization.

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