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CENTRAL ASIA IN GLOBAL ENERGY MARKETS: GEOPOLITICAL RISKS AND
ECONOMIC OPPORTUNITIES
Pirmatova Dilnozа Ortiqboyevna
Teaching lecturer at the Department of Agricultural Economics, Faculty of Agricultural
Economics, Logistics and Services, Tashkent State Agrarian University."
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This article analyzes the evolving role of Central Asia in global energy markets,
highlighting both the economic opportunities and geopolitical risks facing the region. It explores
the energy potential of Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan—
including oil, natural gas, hydropower, and renewables—while examining their strategic
importance as energy exporters and transit hubs. The piece discusses the impact of rising
domestic energy demand, aging infrastructure, and external dependencies, particularly on Russia
and China. It also considers the region’s growing relevance to the European Union and global
green transition efforts. By addressing challenges such as political instability, climate
vulnerability, and infrastructure gaps, the article offers a comprehensive overview of Central
Asia’s prospects in the shifting global energy order.
Keywords:
central Asia, global energy markets, geopolitics, energy security, renewable energy,
energy transition, infrastructure, regional cooperation, green hydrogen, climate risk.
Introduction.
Central Asia, long considered a geopolitical crossroads of empires and
civilizations, is now emerging as a critical player in the global energy landscape. Encompassing
the five post-Soviet republics of Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and
Tajikistan, the region holds vast reserves of oil, natural gas, uranium, and hydropower, along
with untapped potential in renewable energy. Its strategic location—bordering China, Russia,
Iran, and Afghanistan—makes it a vital transit and supply corridor in a world increasingly
defined by energy competition, supply chain reorientation, and the transition to cleaner fuels. As
global energy markets grapple with shifting demand, climate imperatives, and geopolitical
realignments—especially after Russia's invasion of Ukraine and escalating U.S.–China rivalry—
Central Asia has become a contested space for influence among major powers. China’s Belt and
Road Initiative (BRI), Russia’s energy networks, and the European Union’s search for
alternative suppliers are all converging in this region, intensifying its geopolitical relevance.
At the same time, Central Asian countries face complex internal challenges. Rapid population
growth, aging infrastructure, seasonal energy shortages, and the threat of resource depletion put
pressure on domestic energy systems. Despite exporting substantial volumes of fossil fuels,
countries like Uzbekistan and Kazakhstan are struggling to meet rising domestic demand,
particularly during harsh winters. Meanwhile, the region is also pursuing ambitious renewable
energy and green transition strategies, aiming to reduce dependency on hydrocarbons and
increase energy self-sufficiency. This article explores Central Asia’s evolving role in global
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energy markets by analyzing its resource base, infrastructure, and export dynamics.
Figure 1. Central Asia in a shifting geopolitical landscapes
It examines the region’s strategic economic opportunities—particularly in renewables,
hydrogen, and regional cooperation—while addressing the geopolitical risks tied to external
influence, environmental vulnerabilities, and energy insecurity. As the global energy map is
redrawn, Central Asia’s choices will not only shape its own development but also influence the
stability and sustainability of global energy flows in the decades to come.
Materials and methods.
This study employs a qualitative, multi-method research design to
explore the geopolitical and economic dimensions of Central Asia’s role in global energy
markets. The approach combines:
Literature review and policy analysis
Document and data analysis
Comparative regional analysis
The study focuses on five Central Asian countries: Kazakhstan, Uzbekistan, Turkmenistan,
Kyrgyzstan, and Tajikistan, assessing both fossil fuel and renewable energy dynamics in the
context of global energy shifts. The study draws on a diverse range of primary and secondary
data sources, including:
Academic literature: Peer-reviewed journals such as Energy Policy, Energy,
Sustainability and Society, Central Asian Survey, and Asian Affairs were consulted to
understand theoretical and empirical developments.
Policy documents and reports: Publications from the International Energy Agency (IEA),
World Bank, International Renewable Energy Agency (IRENA), and Asian Development Bank
(ADB) provided regional energy statistics and policy assessments.
Official statistics: National energy ministries, statistical agencies (e.g., KazStat, UzStat),
and international databases (BP Statistical Review, Global Energy Monitor, IEA World Energy
Outlook) were used for quantitative indicators such as production volumes, reserves, exports,
and infrastructure capacity.
News media and institutional insights: Reports from Reuters, The Diplomat, Financial
Times, and Eurasianet were used to capture real-time developments, diplomatic strategies, and
emerging geopolitical risks.
Geospatial data: Maps of pipeline infrastructure, trade corridors, and hydropower
projects were cross-referenced using datasets from OpenStreetMap and the Energy
Infrastructure Mapping Project (EIMP).
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A qualitative thematic analysis was conducted to identify recurring patterns, strategic trends,
and risk typologies across textual sources. Official energy policy documents, summit
declarations (e.g., EU–Central Asia, SCO), and government statements were analyzed to
understand strategic narratives, commitments, and alignments with global energy goals (e.g.,
SDG 7, Paris Agreement). This research is based solely on publicly available data and literature.
No human participants or sensitive fieldwork were involved, and ethical clearance was not
required.
Table 1. Analytical overview of geopolitical risks and economic opportunities in central asia’s
energy sector
Category
Key Variables
Geopolitical Risks
Economic Opportunities
Energy
Resources
Oil, gas, uranium,
hydropower,
renewables
Resource depletion (e.g.,
gas in Uzbekistan), over-
reliance on fossil fuels
Vast reserves (e.g., gas in
Turkmenistan, uranium in
Kazakhstan), renewable
energy potential
Energy
Infrastructure
Pipelines, grids,
storage, transport
corridors
Aging Soviet-era systems,
lack of regional integration,
winter shortages
Investment in
modernization, regional
grid reintegration, green
hydrogen infrastructure
Export and
Transit Routes
Pipelines to China,
Russia, EU; rail to
South Asia
Overdependence on Russian
and Chinese transit systems,
pipeline chokepoints
Diversification (e.g., Trans-
Caspian routes), new
rail/road links (e.g., Middle
Corridor)
Geopolitical
Alignments
Relations with
China, Russia, EU,
US
Strategic tug-of-war;
external dependency; loss
of sovereignty in
negotiation leverage
Multipolar diplomacy;
balancing powers for
investment and stability
Renewable
Energy
Transition
Solar, wind, hydro,
green hydrogen
Lack of capacity, regulatory
gaps, foreign dependence
on tech and finance
Low-cost solar (e.g.,
Uzbekistan), green
hydrogen exports, energy
diversification
Regional
Cooperation
Trade, electricity
exchange,
integration
frameworks
Historical mistrust,
institutional fragmentation,
competition over projects
CASA-1000, SCO green
energy cooperation,
bilateral agreements for
power trade
Research results and discussion.
The research confirms that Central Asia is exceptionally rich
in energy resources. Kazakhstan and Turkmenistan have some of the largest proven oil and gas
reserves in the region, while Uzbekistan remains a key producer with growing potential.
Kyrgyzstan and Tajikistan have vast untapped hydropower potential, accounting for up to 90%
of their domestic electricity generation. However, resource wealth is offset by inefficiencies and
infrastructure constraints. Outdated Soviet-era power plants, limited storage capacity, and
fragmented regional grids have made it difficult to manage seasonal demand spikes—
particularly in Uzbekistan and Kyrgyzstan, where winter blackouts are now common. According
to IEA and national data, power losses in transmission systems can reach 10–12%, significantly
affecting national energy security and export reliability.
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A key finding is that Central Asia’s strategic location has rendered it vulnerable to geopolitical
pressures. The research identifies growing reliance on China and Russia as both a benefit and a
risk. China, through the Belt and Road Initiative (BRI), has funded major energy infrastructure
projects and is now a key importer of Turkmen gas. Meanwhile, Russia has proposed energy
unions and supply arrangements that could limit national sovereignty—such as the proposed
“trilateral gas union” with Kazakhstan and Uzbekistan. These geopolitical alignments come with
complex trade-offs. While Chinese and Russian partnerships bring capital and market access,
they also concentrate power over export routes and pricing. This dependence has grown more
problematic since 2022, as Western sanctions on Russia and the global search for energy
diversification have forced Central Asian states to re-evaluate their strategic priorities. However,
the region is actively seeking new energy corridors to Europe and South Asia, such as the Trans-
Caspian Pipeline and CASA-1000, in an effort to reduce reliance on existing power brokers.
Recent years have shown encouraging movement toward renewable energy transitions in
Central Asia. Kazakhstan has committed to carbon neutrality by 2060 and aims to have 15% of
electricity generated from renewables by 2030. Uzbekistan, more ambitious, has committed to
net-zero emissions by 2050 and is aggressively pursuing solar and wind development with
support from the ADB, World Bank, and Masdar (UAE). The research highlights significant
technical and economic feasibility for a 100% renewable power system in the region,
particularly in Kazakhstan, as indicated in recent energy modeling studies. Yet, challenges
remain: insufficient policy incentives, lack of integrated markets, and dependence on foreign
investment and technology. Despite the potential, Tajikistan and Kyrgyzstan, with their hydro-
heavy profiles, remain isolated from regional green energy strategies due to political
fragmentation and weak cross-border energy cooperation.
Modernizing energy infrastructure emerged as a top priority in all five Central Asian countries.
Uzbekistan and Kazakhstan are reactivating grid ties with their neighbors, while investing in
smart grids and energy storage. These efforts, however, face logistical and financial constraints.
For example, re-establishing the Unified Energy System of Central Asia (UESCA) remains a
political challenge due to differing national priorities and unresolved transboundary disputes.
Nevertheless, projects like CASA-1000, aimed at exporting excess summer hydropower from
Kyrgyzstan and Tajikistan to Pakistan and Afghanistan, demonstrate the economic viability of
cross-border trade, provided governance structures and security conditions improve. The
research also emphasizes that Central Asia’s energy future is at risk from climate change and
environmental degradation. Water availability is a central concern—especially as glaciers recede
and droughts intensify, threatening hydropower generation in the eastern part of the region.
Large infrastructure projects, such as the Rogun Dam in Tajikistan, pose both strategic and
ecological risks. Disputes with Uzbekistan over downstream water flows have previously
escalated into diplomatic standoffs. In the context of climate change, such tensions could worsen,
unless countries adopt shared water-energy management frameworks. The lack of environmental
impact assessment in several major energy and infrastructure projects, along with weak
enforcement of sustainability standards, risks undermining long-term resilience. One of the most
promising developments observed is the region’s growing engagement with the European Union,
Japan, and international financial institutions. Following the war in Ukraine, Europe is seeking
to diversify its energy imports away from Russia, and Central Asia has emerged as a viable
long-term partner.
For instance, Kazakhstan and Uzbekistan are now positioning themselves as future green
hydrogen suppliers to the EU, with initial pilot projects underway. Similarly, regional
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governments have issued green bonds, liberalized energy tariffs, and created public–private
partnership (PPP) frameworks to attract global capital.
While Western investments still lag behind Chinese funding, the geopolitical diversification
trend is real and gathering momentum—especially in Kazakhstan, the most reform-oriented and
investment-friendly among the five.
Central Asia’s resource potential remains underexploited due to infrastructure gaps and
regional fragmentation.
Geopolitical dependencies on Russia and China are double-edged—providing short-term
economic gain but creating long-term strategic vulnerabilities.
The region is slowly transitioning toward renewables, but policy frameworks, grid
integration, and investment environments need urgent strengthening.
Climate change, especially water stress, presents a shared regional threat, making
cooperation imperative.
Engagement with Europe and multilateral institutions offers an emerging counterbalance
to Eastern dominance and is a strategic opportunity to build a diversified, sustainable energy
future.
To fully realize its energy potential, Central Asia must overcome internal fragmentation and
shift from a primarily extractive and reactive energy posture to one that is strategic, cooperative,
and forward-looking. Deepening ties with multilateral partners, accelerating investment in clean
energy technologies, and restoring regional energy connectivity will be essential steps toward
building a resilient and diversified energy future. Ultimately, Central Asia’s trajectory in global
energy markets will depend not just on resource endowment, but on the political choices,
partnerships, and institutional frameworks its leaders adopt in the coming decade. Whether the
region becomes a bridge of cooperation or a battleground of great power competition remains an
open—and urgent—question.
Conclusion.
Central Asia stands at a pivotal juncture in the evolving global energy landscape.
Rich in fossil fuels, abundant in renewable potential, and strategically positioned between major
powers, the region possesses all the structural elements to become a significant energy hub.
However, this potential remains constrained by outdated infrastructure, fragmented regional
cooperation, geopolitical dependencies, and environmental vulnerabilities. The research
highlights a dual reality. On one hand, countries like Kazakhstan, Uzbekistan, and Turkmenistan
are benefitting from increased global attention amid Europe's diversification away from Russian
energy and China's growing energy demands. On the other hand, this attention often reinforces
strategic dependencies that limit long-term autonomy. Smaller and energy-poor states like
Kyrgyzstan and Tajikistan face unique challenges—namely, hydropower reliability, winter
shortages, and limited export capacity—requiring tailored solutions and cooperative frameworks.
Encouragingly, the region has begun to embrace renewable energy transitions, supported by
global institutions, green finance, and policy reforms. Yet these initiatives are still in their early
stages and risk being undermined by political inertia, lack of coordination, and short-term
economic interests. Climate risks, particularly water scarcity and glacial melt, further underscore
the urgency of integrating environmental considerations into national and regional energy
strategies.
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https://www.realinstitutoelcano.org/en/analyses/energy-security-in-central-asia-
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