Uzbekistan is an energy-rich Central Asian nation with large reserves of natural gas, oil and coal. As such, it aims to strengthen its economic, political, and military role in the region. But how realistic is that given that the country has become dependent on Russian natural gas?
Until 2020, Russian energy giant Gazprom was one of the major buyers of Uzbek gas. In 2018, supplies of Uzbek natural gas to Russia amounted to 3.8 billion cubic meters, while in 2019 they reached 4.9 billion cubic meters. But over the past few years, the production volumes of not only Uzbek natural gas, but also of oil, coal, gasoline, and diesel fuel have significantly decreased. At the same time, domestic demand has grown, which is why Tashkent was forced to begin importing large volumes of Russian gas in 2023.
Uzbekistan is now buying Russian gas for its own market, while it continues fulfilling its long-term contracts and exporting domestically produced gas to China. But the problem for Tashkent is that gas exports to its giant neighbor have dropped remarkably. That is why, according to reports, the Central Asian nation plans to additionally increase imports of Russian gas by 2030.
That, however, does not mean that Tashkent has fallen victim to the Kremlin’s policy of using energy as a weapon. Unlike most countries that continue purchasing Russian energy, Uzbekistan buys Russian gas at a rather low price – $160 per 1000 cubic meters. That is cheaper than what China and Turkey – possibly Moscow’s most important partners – pay for Russian natural gas. Russian sources claim that Beijing pays $260-270 per 1000 cubic meters, while Ankara buys gas from Russia at the rate of $270-280 per 1000 cubic meters.
Uzbekistan, therefore, seems to be getting special treatment in the Kremlin. Given that Kazakhstan is attempting to, if not completely leave Russian geopolitical orbit, then at least reduce Moscow’s influence in the country, the Kremlin is seeking to create a regional counterbalance by developing close economic ties with Uzbekistan. That is one of the reasons why, on 1 November 2023, Russia, Uzbekistan, and Kyrgyzstan agreed to build the Russia–Caspian Sea– Turkmenistan–Uzbekistan–Kyrgyzstan international multimodal transport corridor – a route that would effectively bypass Kazakh territory.
But policymakers in Tashkent do not seem willing to put all of their eggs in one basket. In the coming month, the former Soviet republic plans to hold the Tashkent International Investment Forum, as well as the Uzbekistan Energy Forum — two events that can help the Central Asian nation develop closer economic and energy cooperation with various influential global actors.
At this point, however, for Uzbekistan, Russia remains one of the most important economic partners. But Uzbek authorities also plan to strengthen relations with neighboring Kazakhstan – Russia’s nominal ally in the Collective Security Treaty Organization (CSTO), and a member of the Russian-led Eurasian Economic Union (EAEU). In December 2023, Uzbekistan ratified the Treaty on Allied Relations with Kazakhstan, while in early April 2024 Kazakh President Kassym-Jomart Tokayev held an informal meeting with his Uzbek counterpart Shavkat Mirziyoyev.
Quite aware that partnership between the two neighbors is pivotal for regional development and stability, Uzbekistan and Kazakhstan are aiming to bolster bilateral trade, and also to develop closer military ties. However, after Russia started supplying natural gas to Uzbekistan via Kazakh territory in early October 2023, Kazakhstan has de facto become part of a tripartite gas union between Moscow, Astana, and Tashkent. Uzbek authorities are, therefore, likely to attempt to find a delicate balance between Russia and Kazakhstan.
At the same time, Tashkent will almost certainly continue seeking to strengthen economic relations with the United States, aware that Washington can help the former Soviet republic develop its renewable energy sector and reach a 25% renewable share by 2030. In order to achieve such an ambitious goal, Tashkent has already started attracting foreign investment in its green energy field.
It is no secret that Chinese companies China Poly Group and China Electric intend to build a solar power plant with a capacity of 500 MW in the Forish district of Uzbekistan’s Jizzakh Region, near the border with Kazakhstan. Besides, green energy company ACWA Power is expected to construct two large wind power plants in Uzbekistan – one in the autonomous Karakalpakstan republic, and another one in the Bukhara region’s Gijduvan district.
Indeed, Uzbekistan is quickly moving toward the greater use of renewables. The most populous Central Asian nation has reportedly become a regional leader in renewable energy, although natural gas still accounts for over 70% of power generation in the country. That is why the Uzbek government plans to invest $500 million on expanding capacity in its natural gas transportation system to enable a significant increase in imports from Russia.
Given that Russian energy giants Gazprom and Lukoil control 15 oil and gas fields in Uzbekistan, Moscow is expected to remain one of the most important of Tashkent’s energy partners for the foreseeable future. That, however, is unlikely to prevent Uzbekistan from pursuing its multi-vector foreign policy, hoping that such a concept will allow it to strengthen its positions in Central Asia, and achieve its ambitious economic, energy, and political goals.
Image: Dennis Keller