Afghanistan, Kazakhstan, Turkmenistan Agree to Establish Logistics Hub for Russian Oil Exports

Afghanistan, Kazakhstan, and Turkmenistan have reached a landmark agreement to establish alogistics hubin Herat province, western Afghanistan. The hub, with an initial capacity of 1 million tons of oil, is set to facilitate the transportation of Russian oil exports to South Asia, particularly Pakistan. This development stems from six months of talks between the three countries, with technical teams now tasked with drafting a formal agreement within the next two months.

Why this matters: This agreement has significant implications for regional energy trade, as it provides a new route for Russian oil exports to South Asia, potentially reshaping the energy landscape in the region. The success of this initiative could also pave the way for further economic collaboration and development in the region, strengthening Afghanistan's position as a key connectivity point between South and Central Asia.

Nooruddin Azizi, the Taliban's acting commerce minister, stated, "Based on our discussions, a logistics centre is going to be established in Herat province, which can connect the north to South Asia." The logistics hub is part of the Taliban's broader efforts to leverage Afghanistan's strategic location, situated between South and Central Asia and sharing borders with China and Iran. Azizi emphasized, "The three countries have done their best to prove Afghanistan's claim as a connectivity point. Reaching Pakistan through Afghanistan will be the best option."

Kazakhstan has expressed particular interest in developing roads and a railway through Afghanistan to establish connections with the Gulf and South Asia. Currently, Kazakhstan's crude oil exports rely on logistics in Russia and Russian ports on the Black Sea. The creation of the hub will enable the development of multi-modal services, consolidating truck shipments in the dry port and sending them along railroads on the North-South corridor to sea ports in the Gulf, Pakistan, and the Indian Ocean towards India.

The Taliban government has already struck fuel deals with Iran and Russia in recent years, including a deal with Russia in 2022 to import 1 million tons of gasoline, 1 million tons of diesel fuel, 500,000 tons of liquefied petroleum gas, and 2 million tons of wheat per year. The establishment of the logistics hub is expected to further strengthen regional energy trade and provide a new route for Russian oil exports to South Asia.

However, the Taliban government faces challenges in funding development and avoiding economic stagnation as foreign aid to Afghanistan falls and the country's predominantly agricultural economy is marred by persistent drought. The agreement with Kazakhstan and Turkmenistan represents a vital step in the Taliban's efforts to position Afghanistan as a regional connectivity point and attract investment.

While Pakistan, a major trading partner with Afghanistan, has signed on to regional energy connectivity agreements, relations between the two countries have been strained in recent years over accusations that Afghanistan is harboring anti-Pakistan militants. The establishment of the logistics hub in Herat province could potentially ease tensions and promote increased economic cooperation between the two neighbors.

Technical teams are finalizing the agreement and the three countries are preparing to invest in the project, the logistics hub in Herat province holds the potential to reshape regional energy trade and strengthen Afghanistan's position as a key connectivity point between South and Central Asia. The success of this initiative could pave the way for further economic collaboration and development in the region.

Key Takeaways

• Afghanistan, Kazakhstan, and Turkmenistan agree to establish a logistics hub in Herat province.
• The hub will facilitate Russian oil exports to South Asia, particularly Pakistan.
• Initial capacity will be 1 million tons of oil, with potential for expansion.
• The hub will strengthen Afghanistan's position as a key connectivity point between South and Central Asia.
• The project could pave the way for further economic collaboration and development in the region.