BAKU, Azerbaijan, April 27. Baku hosted the 2nd Forum on Logistics and Oil Trade in the Caspian and Central Asian Regions, an event that increasingly reflects not merely an industry-specific discussion but a systemic restructuring of global energy logistics.
The forum’s agenda included transportation and infrastructure, financial aspects, trading strategies, and risk management amid highly volatile markets. Essentially, the discussion centered on how the region is adapting to a new reality where stable routes are becoming increasingly scarce.
Speaking at the forum, Taghi Taghi-zada, Acting Director of Trading Operations at SOCAR Trading, noted that the oil market has entered a phase of chronic instability in recent years.
According to him, since 2019, the industry has experienced a series of shocks, ranging from attacks on infrastructure in Saudi Arabia and the COVID-19 pandemic to the Russia-Ukraine conflict and the current tensions surrounding the Strait of Hormuz.
Taghi Taghi-zada paid particular attention to the Strait of Hormuz, which has traditionally been viewed in the context of an “extreme scenario” in textbooks and analytical reports.
“And now we are effectively facing this,” he noted, adding that the market has been operating under conditions of heightened uncertainty and reacting to the news flow for quite some time.
In effect, this means that oil prices and logistics solutions are becoming less dependent on long-term fundamental factors and increasingly influenced by short-term geopolitical signals.
Against this backdrop, the role of regional routes and alternative corridors is growing.
Assylbek Jakiyev, Chairman of Kazakhstan’s PetroCouncil, emphasized in his speech that Kazakhstan plans to attract approximately $15 billion in investments in the petrochemical sector in the coming years.
Among the key projects are large-scale polyethylene and butadiene production facilities, which are expected to significantly alter the country’s export structure.
However, as Jakiyev noted, the main challenge lies not in production, but in delivering products to foreign markets.
He emphasized that northern routes may remain limited in the medium term, which automatically increases the importance of alternative routes, primarily China, the Caspian region, and the Middle Corridor.
This marks a key shift: logistics ceases to be a support function and becomes an element of strategic planning.
This theme was further developed in the presentations by representatives of the region’s oil industry and logistics companies, who are increasingly speaking of the need to synchronize infrastructure investments on both sides of the Caspian Sea.
The forum placed particular emphasis on the Middle Corridor, which is already considered one of the most reliable routes.
Kuanysh Keskinbayev, Deputy General Director of KMG Kashagan B.V., noted that the corridor’s capacity for Kazakhstani oil is approximately 5 million tons; however, further growth requires investment in ports, the fleet, and railway infrastructure.
He also highlighted the economic specifics of the route: despite higher transportation costs compared to the CPC, the final export profitability can be comparable due to oil price factors.
This effectively means that the choice of route is increasingly determined not only by tariffs but also by the flexibility of the system as a whole.
A practical example of infrastructure development is the Kulevi terminal on the Black Sea, which was discussed by Ismayil Kerimov, CEO of SOCAR Georgia Black Sea Terminal.
He announced that the transition to round-the-clock operations and infrastructure modernization has made it possible to nearly double transshipment capacity.
Today, the terminal is capable of handling large-capacity vessels and operating without significant delays, which directly impacts the speed of the entire supply chain.
This reflects a broader trend: competition in oil logistics is increasingly less determined by production and more by the efficiency of infrastructure.
At the same time, the forum discussed the development of the ports of Alat, Dubendi, Aktau, and Kuryk, as well as Baku-Tbilisi-Kars and other key hubs that form the backbone of the Middle Corridor.
Separately, experts also touched on the prospects for the southern route.
Shehryar Omar, a representative of the Petroleum Institute of Pakistan, noted that over the next 5–10 years, demand growth will shift toward South Asia and markets with a population of about two billion people.
According to him, this is gradually changing the logic of global flows, reducing Europe’s long-term role and increasing the importance of routes to the Arabian Sea.
For countries in the region, this means not only new opportunities but also the need for accelerated infrastructure development.
In this context, Pakistan is increasingly viewed as a potential energy and transportation hub connecting Central Asia with southern markets.
Concluding the discussion on risks, representatives from the financial and legal sectors noted that the growing complexity of supply chains requires more active implementation of insurance instruments.
According to Mike Shaw of Orbis Risk Partners, charterer liability and multimodal transport insurance in the region remains underdeveloped, despite the growing complexity of logistics chains.
In effect, this means that risks are currently distributed unevenly, and many market participants remain vulnerable to supply chain disruptions.
At the same time, Dentons partner Tim Stubbs emphasized that increased uncertainty is accompanied by increased opportunities.
According to him, the accelerated development of the Middle Corridor opens up new prospects for the countries of Central Asia and the Caucasus, especially against the backdrop of the restructuring of global trade.
The forum in Baku effectively marked a significant shift: the region’s oil logistics are moving away from a linear system and evolving into a multi-layered architecture of routes, risks, and investment decisions.
Indeed, the ability of the Caspian and Central Asian countries to rapidly adapt their infrastructure is becoming a key factor in their competitiveness within the new energy landscape.