Strategically located between Russia, China, India and the Greater Middle East, Kazakhstan may have a bright future in what some analysts call the upcoming Asian Century. Goods can be transported in seven directions from and towards Kazakhstan (north-westwards towards European Russia, northwards towards the Arctic, north-eastwards towards Eastern Siberia and Vladivostok, eastwards towards China, southwards towards Afghanistan and Pakistan, south-westwards towards Iran and westwards towards the South Caucasus), and this would allow Kazakhstan to become the main logistical hub of Eurasia. Still, in its external trade, the Golden Eagle suffers the lack of diversification of its transportation routes, which has proved to be a weakness among the current geopolitical tensions.
According to some estimates, after all, more than 70 per cent of Kazakhstan’s imports come through or from Russia (most notably through or from the aforementioned North-Western route, be it through the ports of St Petersburg or Novorossiysk or by land from Belarus and Central Russia), while around 20 per cent are imported through or from China. The remaining five directions are highly underdeveloped to date.
The north-western land route towards Central Russia and Belarus is traditionally the quickest one to transport goods from and to Western Europe. The competitiveness of this route increased after the launch of the New Silk Road, which has been accompanied by a wave of infrastructure building, sometimes from scratch (see Western Europe – Western China highway), and with the institution of the Eurasian Customs Union in 2010, which made many customs checks between Russia and Kazakhstan redundant since a customs union implies a unified customs code and trade policy.
Unlike between Russia and Belarus, whose border is totally seamless, there are still border checks between Russia and Kazakhstan, also because there are limits on how long the citizens of either country can stay in the other without work permits or similar; but, since Kazakhstan and Russia follow the same customs code, the border between the two countries is very soft, also because their citizens can enter the other one with internal passports or ID cards. This made the land route through Russia and Belarus a natural transit route for Kazakhstani imports and exports.
Unfortunately, following the launch of the Special Military Operation, some European countries banned vehicles with Russian and Belarusian plates, while Poland closed three of its four border points with Belarus in the wake of its ongoing tensions with its eastern neighbour. This created a temporary monopoly for truck drivers from Kazakhstan and Kyrgyzstan in the trade between the EU and the Eurasian Economic Union countries; but, on 21st February 2023, Poland banned also vehicles from Armenia, Moldova and the Central Asian countries to cross its territory. This not only limited the outreach of this temporary monopoly, but also made travel times much longer: while in 2020 it took 12 to 14 days to go from Germany to Kazakhstan by truck, now 20 days are needed.
The Kazakhstani government and business operators, therefore, have been rather active in exploring alternative routes, in particular for their westward trade. One of the options is the Trans-Caspian Route, which goes from Aktau to Georgia through the Caspian Sea and Azerbaijan. From Georgia onwards, goods can either be shipped from the Georgian port of Poti or proceed towards Turkey. This route has been occasionally used by grain exporters and it has been eyed by Kazatomprom as an alternative to St Petersburg for its uranium shipments in 2022. But the Trans-Caspian Route requires at least two hard border crossings and a transhipment in order to cross the Caspian Sea.
Moreover, while the main staple of the route (the Baku – Tbilisi – Kars railway) has a capacity of 6.5 million tonnes/year and only half of its capacity is used, the national sea shipping company Kazmortransflot has a relatively small fleet, and the country must rely on Azerbaijan’s fleet. Finally, at least part of the goods would still have to be disembarked (or embarked) in Black Sea ports, which is potentially risky in the current geopolitical climate. Therefore, in spite of the strong US support, the Trans-Caspian Route is not particularly attractive for Kazakhstan, and the Head of Kazatomprom Meirzhan Yussupov himself recently stated on an interview to the Financial Times that “it’s much easier to us to sell most, if not all, of our production to our Asian partners… or to our partners in the north”. The primary reference, of course, is to Russia and China.
The Iranian Way through the North-South Corridor is rather promising, especially given the rising Indian economy and the possibility to reach the Arab Peninsula and even East Africa and South-East Asia. In 2014 has been inaugurated a double-track railway line which connects Uzen in Kazakhstan and Gorgan in Iran through Turkmenistan, creating a direct railway connection between Kazakhstan (and from there Russia) and Iran. Its capacity, 10 million tonnes/year, is higher than the one of the Baku – Tbilisi – Kars railway. The importance of the line goes far beyond Central Asia: on 7th July 2022, the first container train left Moscow to reach the Indian port of Nhava Sheva near Mumbai through Kazakhstan, Turkmenistan, Iran and the Indian Ocean. But, at the moment, the usage of the line is still very low, despite of the interest shown by both Russia and China, and even shipments between Kazakhstan and Pakistan or the UAE are made through Novorossiysk or St Petersburg, because it’s actually easier.
The transport routes through Russia, therefore, are still the most convenient ones from both a logistical and an economic point of view; and, in this contest, Murmansk presents itself as a viable alternative to Saint Petersburg and even Novorossiysk. Given the ongoing conflict in Ukraine, the Port of Novorossiysk is a potential target for Kiev’s forces, while the Danish Prime Minister Mette Fredericksen has repeatedly threatened to close the Danish Straits – the gateway of the Baltic ports to the open sea – to the so-called Russian Shadow Fleet. Since this would amount to a blockade, that would trigger a Russian reaction, as well as to a violation of the international shipping law (the 1857 Copenhagen Convention made the straits open to international shipping, and the Straits are regarded as an international waterway), many experts think that such a move would be possible only in case NATO feels ready for a direct armed conflict with Russia. Therefore, such a move is highly unlikely at the moment; but, at the same time, “minor nagging with Russian ships cannot be ruled out”. Last but not least, the Port of St Petersburg is subject to winter freeze and is uncapable of hosting ships above the Baltimax standard due to the physical constraints of the Danish Straits.
Located on the east bank of the Kola Bay, on the other hand, Murmansk stays ice-free all year round, thanks to the warm waters of the Gulf Stream, and it also enjoys a direct access to the Atlantic Ocean. Therefore, while the Port of St Petersburg is constrained by the limits regarding the size of the ships which can cross the Danish Straits, and even the Turkish Straits have air draft constraints because of the bridges which cross the Bosphorus and the Dardanelles, the Port of Murmansk is capable of hosting Capesize ships, the largest cargo ships currently available (and called this way because they have to go along the Cape of Good Hope and Cape Horn in order to sail between oceans, since they are too big to cross the Suez Canal).
These features were clear already during WWII, when the Western Allies chose Murmansk as one of the destination ports of their war supplies to the Soviet Union (the other one was Arkhangelsk, on the White Sea), despite the first port’s closeness to Finland and Norway (the former an Axis member, the latter ruled by a collaborationist regime until the end of the war). Likewise, being the last ice-free port of the Arctic Ocean made Murmansk the ideal home port of Atomflot, the world’s only fleet of nuclear-powered icebreakers.
But what makes the Port of Murmansk really outstanding compared to other ports of the Russian Arctic – and at least most of the non-Arctic Russian ports – are the ongoing works for the realisation of the Murmansk Transport Hub, aimed to turn this Arctic port into the main interchange between the Northern Sea Route and the North-South Corridor and therefore the Persian Gulf. One of them is the realisation of the new Lavna Terminal, on the west side of the Kola Bay, destinated to the transportation of oil and coal and expected to be completed in December.
The opening will take place in two phases. During the first one, the terminal will have a capacity of 4 million tonnes/year; while, once completed, it will be able to load and unload 18 million tonnes of goods per year. The terminal will be connected to the existing railway line between Murmansk and St Petersburg through a 46-km long new line, opened on 15th December 2023 with the inauguration of a 1300 m long railway bridge on the Tuloma River.
Another main project is the construction of a Belarusian terminal, following an agreement signed in April 2024: its expected capacity will be of 25-30 million tonnes per year, and it is planned to be completed in 2028. Moreover, the Murmansk Bulk Terminal itself is undergoing renovation works, which started this year and are supposed to end in 2026. Last but not least, there are plans for a new terminal in Tuloma, with a capacity of 4 million tonnes/year eventually increasable up to 6. Its realisation, nevertheless, is undergoing some delays: the project for the construction of the transhipment terminal realised by Lenmorniiproekt has indeed been declined in 2022.
Therefore, in spite of some bumps in the road, there is a general optimism among the economic operators about the future of the port. In 2023, the Port of Murmansk handled 57.8 million tonnes of goods, making it the 17th largest in Europe for annual cargo tonnage, and the current tensions with the West, while affecting the geography of Russia’s trade, are not leading to a reduction in the trade flows, as shown by the 10.5 per cent increase in the shipment of fertilisers in 2023, when they reached an overall amount of 2.21 million tonnes thanks also to the new export markets in Africa and Latin America. And, according to the Governor of the Murmansk Oblast Andrei Chibis, the Port of Murmansk will handle an annual cargo tonnage of 110 million tonnes/year in 2027, when the new terminals are planned to be ultimated.
The long-term forecasts are also positive: thanks also to the massive investments in the Northern Sea Route and the North-South Corridor, the transport volume of the Murmansk Transport Hub may indeed reach 150 million tonnes in 2030 and 200 million tonnes in 2035. Such levels would make the Port of Murmansk the 1st in Russia and the 3rd in Europe, after Rotterdam and Antwerp-Bruges (at least at current annual cargo tonnage levels); but, according to the Professor of the Higher School of Industrial Management at the Peter the Great St Petersburg Polytechnic University Aleksei Fadeev, any further development would require an upgrade of the railway lines leading to Murmansk and the construction of new ones in the Russian Arctic.
The potential is undoubtedly great, and this helps to explain why, on 5th August 2024, a high-ranked Kazakhstani delegation led by the Minister of Transportation Marat Karabayev visited the Murmansk Oblast, and in particular the local ports of Murmansk and Lavna, as well as Murmansk Bulk Terminal, and met the local deputy governor Olga Kuznetsova. The Russian local authorities provided the Kazakhstani delegation with some information about the port and the related transport infrastructures, and Karabayev stated his country’s interest in the logistic potential of the ports of the Murmansk Oblast, which makes them suitable for the realisation of common projects in the transportation sphere.
Will the visit lead to the construction of a Kazakhstani terminal akin to the Belarusian one? While we cannot exclude this in the future, there are no news about it at the moment, while it’s more likely that the direct consequence would be new freight connections between Kazakhstan and Murmansk both by rail and by road. What we can observe now is a general increase in Kazakhstan’s interest for the Arctic. Apart from the Murmansk Way, the Steppe Eagle is also increasing its usage of the Ob-Irtysh River as a navigation way, currently at 1.5 million tonnes/year; and, as stated by the Head of Rosmorrechflot Andrei Tarasenko during the 4th Forum of the SCO Member States’ Regions held in Omsk, there are ongoing discussions between Russia, Kazakhstan and China to fully reinstate river navigation along the Irtysh River, also thanks to the construction of six multimodal hubs by 2027.
The river, according to the Minister of Economy of the Omsk Oblast Anna Negoduiko, can accommodate up to 15 million tonnes of loads per year; but, at the moment, Tarasenko set a more conservative target of 12 million tonnes. The Murmansk Way and the Ob-Irtysh one, nevertheless, are both part of a coherent strategy of Astana to make use of its Arctic connections to diversify its transportation routes and to exploit new ways to transport goods both westwards and eastwards.
Moreover, the outreach of Kazakhstan’s interest for the Port of Murmansk can go well beyond the Golden Eagle. During the 4th National Railway Congress in 2023, for instance, Putin stated that the ongoing works in the Port of Murmansk will allow a direct connection between the Arctic and the Persian Gulf, linking therefore the Port of Murmansk to the North–South Corridor and reducing the voyage between Murmansk and Mumbai to 15 days instead of 45.
Kazakhstan’s strategy regarding the Port of Murmansk and the latter’s connection with the North-South Corridor, therefore, will likely spark an interest in it also from the rest of Central Asia, whose countries are connected to Russia through Kazakhstan with the partial exception of Turkmenistan; and it’s not surprising that, a few days after the visit to Murmansk of Kazakhstani representatives, the Uzbek Ambassador in Moscow Botirjon Asadov stated that his country and the EAEU should remove trade barriers and limitations. Uzbekistan already joined the North-South Corridor in October 2023.
Given the ongoing investments in Murmansk and the growth of the importance of both the Northern Sea Route and the North-South Corridor, the cooperation between Murmansk and the Kazakhstan public and private operators – and, in turn, those of the other Central Asian “stans” – has a great potential; but, at the same time, there are some risks due to ongoing international tensions and the US attempts to check the compliance of third countries to their sanctions against Russia and Iran, for instance through the handover of new digitalised customs servers. This could put Kazakhstan in a difficult situation; and, while Astana has stated multiple times that they have no intention to abide to anti-Russian sanctions, the threat of secondary sanctions is still looming.
At the moment, nevertheless, the European Union doesn’t ban the transit through Russia of goods between the EU and third countries, with the exception of weapons, dual-use technology and some items which can be used for military purposes. Therefore, the Port of Murmansk is still suitable to accommodate at least part of Kazakhstan’s trade towards Western Europe and the Western Hemisphere as a whole. And, given its direct access to the Ocean and its suitability to accommodate Capeside ships, it can also become a tool for Kazakhstan to explore new trade relations, especially with the emerging countries of Africa and Latin America, as it happened for the Russian fertilisers.
Giuseppe Cappelluti
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