Global Shocks Reshape Gulf and Central Asia Energy Ties
The evolving global energy landscape can catalyse stronger ties between the Gulf Cooperation Council (GCC) states and the countries of Central Asia. Over the past fifteen years a cascade of disruptions has reshaped energy markets—beginning with the shale revolution, followed by the accelerated fourth energy transition, underinvestment in hydrocarbons, the COVID-19 pandemic, the war in Ukraine, and, most recently, the return of Donald Trump to the White House in 2025.
These overlapping shocks have reshaped the structure of global energy markets, causing their volatility and giving rise to several new defining trends. Uncertainty has become systemic, undermining the ability to predict market dynamics. Traditional trade flows have shifted: Russia has redirected energy exports to Asia and the Middle East, while the EU’s hydrocarbon phase-out and the US's pivot towards energy exports have intensified competition for Asian markets. As a part of this strategic shift, the GCC countries had an opportunity to play a role in replacing the lost volumes of Russian hydrocarbons at the European market. While in 2021 the total import of mineral fuels from the GCC to the EU was worth €25.1 billion, in 2022 it peaked at €65.5 billion and remained high at €58.4 billion in 2023. By 2024, fuel made up over 75 percent of the EU’s total imports from the GCC region.
Simultaneously, global political and economic instability has slowed the decline of fossil fuels even as it accelerates the push for renewable energy sources. One of the major forces in this transition is China. No longer a passive participant, Beijing has emerged as both a top importer of Gulf hydrocarbons and a global leader in renewable technology exports. By the mid-2020s, Gulf producers supplied more than 40% of China’s crude oil imports. Saudi Arabia has consistently vied for the position of Beijing’s leading supplier, while Oman, the UAE, and Kuwait also rank among China’s key energy partners. At the same time, China has become indispensable for the Gulf’s renewable ambitions: Chinese firms play a dominant role in providing solar and wind equipment to the region. In 2022 and 2023, for example, the UAE sourced 99.1 percent and 98.8 percent of its solar modules from China, while Oman relied on Chinese imports for 78.6 percent and 83.5 percent of its modules in those years. This dual role has strengthened China’s position as a central energy pivot between Asia and the Middle East and opened doors for cooperation between China and GCC member states in third countries, including Central Asian republics.
The Gulf states have responded to the energy markets upheaval with a dual-track strategy: protecting hydrocarbon revenues while advancing green transformation. On the defensive front, GCC producers are working through OPEC+ to stabilise markets and are maximising export capacity through efficiency gains—for example, by replacing domestic oil use with natural gas.
At the same time, energy producers across the Gulf region are engaging in mutually beneficial cooperation that extends beyond traditional alliances. This includes efforts to enhance each other’s export capabilities. For example, Kuwait is reducing domestic oil consumption—thereby freeing more crude for export—by importing LNG from Qatar, even at the apparent cost of greater energy dependence on a single supplier.
This practice extends beyond the region as well. GCC member states increasingly have the opportunity to invest in the downstream and upstream sectors of potential competitors outside of the Gulf. In doing so, they form new alliances and diversify future revenue streams, thus disincentivising potential competition among oil and gas producers.
On the "green" track, notable progress has also been made. To enhance the environmental image of their hydrocarbon exports, GCC countries are actively investing in carbon capture technologies and integrating renewables into oil and gas production and export processes. A distinct—albeit often controversial—component of this strategy is the development of “blue” and “green” hydrogen projects. Additionally, GCC investors are showing growing interest in overseas ventures related to renewable energy development, particularly in emerging supply chains for the components and materials essential to renewable generation and distribution.
Amid these dynamics, closer energy ties with Central Asia are emerging as a strategic extension of the GCC’s global ambitions. Both regions possess vast hydrocarbon reserves and share a rising commitment to renewable development. Their partnership is being formalised through high-level diplomacy—most notably the 2023 GCC-Central Asia Summit, which produced a joint action plan (2023-2027) focused among other things on energy, trade, and infrastructure.
Several specific areas of cooperation are gaining momentum. GCC countries are increasingly demonstrating interest in expanding into Central Asian energy sectors, including oil, gas and electric energy production. The UAE’s ADNOC is in discussions with Kazakhstan’s QazaqGaz regarding potential joint ventures, and with Turkmenistan’s Türkmengaz to co-develop the Galkynysh gas field. These moves align with Turkmenistan’s goal of reducing overdependence on China.
Through Dragon Oil, the UAE also holds a stake in offshore oil production in Turkmenistan. Meanwhile, Saudi Arabia’s ACWA Power is spearheading a $7.5 billion investment in Uzbekistan’s power infrastructure, including a 1.5 GW gas plant. In 2024, Qatar’s Nebras Power and Pearl Overseas expressed interest in building combined-cycle and hydroelectric plants in Kazakhstan.
Both regions are investing in alternative transport corridors to bypass traditional chokepoints, opening further avenues for mutual cooperation. Kazakhstan and Azerbaijan are advancing the Trans-Caspian “Middle Corridor,” with potential extensions to Gulf ports via Turkey and Iraq’s planned “Dry Canal.” This would establish a north–south energy axis, reducing both transit time and cost. GCC actors like DP World and AD Ports are already involved in developing logistics infrastructure at key Caspian ports like Aktau and Baku. The geopolitical role of Iran is also worth noting. Integrating Iran into regional transport corridors could significantly enhance trade flows between Central Asia and the Middle East.
At the same time, Kazakhstan and the UAE are operating tankers on the Caspian Sea to transport oil to Azerbaijan for onward shipment to Europe, partially bypassing Russian-controlled routes. The UAE and Saudi Arabia have also shown interest in ambitious cross-border infrastructure projects, including the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline and the long-proposed Trans-Caspian gas pipeline to Europe.
On top of these efforts, the GCC-Central Asia cooperation could possibly enhance knowledge exchange and local capacity building. Several Gulf-funded energy projects in Central Asia are structured as joint ventures with local partners, facilitating the transfer of technical expertise and operational know-how. For example, the 1 GW wind farm in Kazakhstan—developed by the UAE’s Masdar in partnership with Qazaq Green Power and the Kazakhstan Investment Fund—ensures active participation by local engineers and firms in both construction and project management. There is also growing interest in academic cooperation, with institutions in both regions exploring joint programmes in petroleum engineering and renewable energy.
Finally, GCC and Central Asian producers also have potential for coordinating efforts at the policy level. Kazakhstan and Oman, alongside other GCC members, participate in OPEC+ arrangements aimed at stabilising global oil markets through coordinated output policies. This collaboration helps manage price volatility and supports market predictability amid growing geopolitical and economic uncertainty. Saudi Arabia’s Crown Prince Mohammed bin Salman has publicly advocated for deeper strategic coordination between the GCC and Central Asia to ensure long-term energy security at both regional and global levels.
Beyond production policy, shared challenges posed by the fourth energy transition can become another topic for discussion between the GCC and Central Asian States in the future. For instance, they can discuss a collective response to external regulatory pressures, such as the European Union’s Corporate Sustainability Due Diligence Directive (CS3D) which imposes new sustainability and transparency requirements on suppliers in global energy value chains. Coordinated action in this sphere could help producers in both regions adapt to evolving compliance standards and safeguard their access to European markets.
Despite this momentum, several barriers persist. Many initiatives remain in the early stages of implementation or even stagnate. Knowledge-sharing programs are limited in scope or entirely absent. Tensions within OPEC+ have also begun to surface, as evidenced by Kazakhstan’s 2025 statement prioritising national interests over quota compliance.
Geopolitically, Central Asia remains intertwined with Russian infrastructure. As of 2024, roughly 80 percent of Kazakh oil continues to transit through Russian pipelines, rendering Gulf investment politically sensitive. Simultaneously, China’s entrenched dominance in regional energy—via pipelines and Belt and Road Initiative (BRI) projects—restricts Gulf access and introduces competitive pressures.
Security risks also pose significant challenges. The TAPI pipeline remains stalled due to instability in Afghanistan. Although the Taliban has pledged to protect the project, lingering uncertainty continues to deter Gulf investors. Infrastructure constraints further complicate energy connectivity: Central Asia’s landlocked geography makes it reliant on third-party transit states. Key projects such as the Trans-Caspian Gas Pipeline remain unrealised, limiting Turkmenistan’s access to European markets.
Iran’s exclusion from regional transport plans—due to international sanctions—prevents fuller connectivity between Central Asia and the Gulf. Internally, Central Asian states grapple with regulatory and legal obstacles, including inconsistent frameworks and weak rule of law, which deter long-term foreign investment.
Nevertheless, the intersection of global energy realignment and regional ambition has opened a window of opportunity for enhanced Gulf-Central Asia energy cooperation. Both regions are resource-rich and seek economic diversification amid global volatility. Their growing collaboration spans investments, logistics, policy coordination, and knowledge exchange—laying the foundations for a potential Eurasian energy corridor.
Yet transforming this potential into a durable alliance will require sustained commitment, improved infrastructure, legal harmonisation, and careful geopolitical navigation. If successful, this partnership could reshape the energy geography of Eurasia and anchor both regions more securely within the global energy order.
Photo: Canva
