BAKU, Azerbaijan, July 7. As a vital pillar of Uzbekistan’s economy, the oil and gas sector plays a central role in ensuring energy security and supporting industrial expansion. Although the country possesses a mature hydrocarbon base, the industry is being reshaped by falling upstream production, changing investment dynamics, and stronger involvement of international partners, while preserving its role in regional energy cooperation and transit.
Resource base shows signs of maturity
According to the statistics, as of 2025, Uzbekistan holds approximately 0.6 billion barrels of proven oil reserves (estimates vary by source), placing the country placing it among mid-ranked global producers and accounting for around 0.034 percent of global oil reserves. These reserves are equivalent to roughly twelve times annual domestic consumption, indicating moderate sufficiency in the short to medium term but limited long-term expansion capacity if new discoveries do not materialize. The country’s energy profile remains heavily gas-oriented, while oil plays a secondary but still structurally important role in domestic supply and industrial usage.
Uzbekistan’s hydrocarbon base is mature and geographically concentrated, with much of production coming from long-operating fields. This makes long-term output increasingly vulnerable to depletion.
Oil reserves are sufficient for over a decade of current consumption but remain modest globally, placing Uzbekistan in a mid-tier position. As a result, energy stability depends more on efficiency, technology, and trade balance than on resource abundance. Natural gas remains dominant, highlighting the importance of pipelines, infrastructure, and transit systems in the energy sector.
Production decline reshapes the industry
Between 2024 and 2026, Uzbekistan’s hydrocarbon production has exhibited a consistent downward trajectory across key upstream indicators. Natural gas production declined from 18.9 billion cubic meters in 2024 to 18.4 billion cubic meters in 2025 and further to 15.8 billion cubic meters in the first five months of 2026. This represents a noticeable contraction in output over a relatively short period, reflecting both geological depletion and operational constraints within mature fields.
A similar trend is observed in oil production, which fell from 305,000 tonnes in 2024 to 270,800 tonnes in 2025 and further to 261,900 tonnes in the January–May period of 2026. Gas condensate production also declined significantly, decreasing from 528,400 tonnes in 2024 to 482,100 tonnes in 2025 and 391,700 tonnes in 2026. These figures collectively indicate that the upstream segment is experiencing a broad-based contraction rather than isolated fluctuations.
Coal production shows a more volatile pattern, declining sharply in 2026 after a temporary increase in 2025, suggesting instability in solid fuel extraction or shifting demand dynamics. In contrast to these declines, petroleum product output demonstrates a different trajectory. Diesel production increased steadily from 389,700 tonnes in 2024 to 442,000 tonnes in 2025 and further to 476,400 tonnes in 2026. Motor gasoline production also showed moderate growth in 2026 compared to 2025, although it remained below 2024 levels. This divergence suggests a gradual structural shift from raw hydrocarbon extraction toward refining and value-added processing activities.
Refining gains importance as upstream weakens
The divergence between upstream decline and downstream growth reflects a structural shift in Uzbekistan’s oil and gas sector. While extraction is constrained by depletion, refining and processing are becoming more important for value creation.
Upstream still accounts for about 54.62% of sector revenue, but midstream activities such as transport and pipeline infrastructure are growing faster due to Uzbekistan’s landlocked geography. Maintenance and turnaround services are also expanding, driven by an aging asset base and rising efficiency needs.
The sector remains over 94% onshore, with limited offshore activity expected to develop gradually. Overall, the industry is shifting from expansion-led growth toward a model focused on maintenance, efficiency, and infrastructure development.
Foreign investment accelerates modernization
A key feature of Uzbekistan’s oil and gas sector is the growing role of foreign investment, particularly cooperation with Chinese companies. The partnership between Uzbekneftegaz and China National Petroleum Corporation (CNPC) plays a central role in upstream and midstream development.
CNPC is involved in joint exploration, production, and pipeline projects, including drilling activities in the Ustyurt region aimed at identifying new reserves. The company also provides technical support for mature gas fields, helping to sustain output and improve efficiency.
Overall, this cooperation reflects Uzbekistan’s increasing reliance on foreign capital and expertise to maintain production and develop energy infrastructure, supported by strong bilateral relations with China.
Efficiency replaces expansion as the growth driver
The oil and gas market in Uzbekistan is projected to grow from approximately 1.01 billion USD in 2025 to 1.05 billion USD in 2026, with expectations of reaching 1.28 billion USD by 2031, following the Mordor Intelligence forecast. This corresponds to a compound annual growth rate of approximately 4.06 percent, indicating moderate but stable expansion.
This growth is driven not by higher extraction volumes, but by structural shifts such as upstream consolidation, midstream infrastructure expansion, and downstream projects like gas-to-liquids technologies. Rising industrial gas demand and gradual tariff liberalization are also supporting revenue diversification.
Challenges cloud the sector’s outlook
Despite reforms and investment, the sector faces persistent challenges, including declining oil, gas, and condensate production due to mature fields and limited new discoveries, raising long-term sustainability concerns.
Additional constraints include aging infrastructure, high maintenance costs, and the need for modernization, along with technological gaps in advanced extraction methods. Growing reliance on foreign partners, particularly Chinese firms, also creates structural dependency. At the same time, rising domestic consumption continues to limit supply availability and reduce export flexibility.
Forecast points to gradual stabilization
Uzbekistan’s oil and gas sector is in a transitional phase marked by declining upstream output, growing downstream importance, and expanding international cooperation. While short-term stability is supported by existing reserves, long-term sustainability depends on structural transformation.
Uzbekistan’s oil and gas sector is expected to face continued short-term declines in upstream production due to mature fields. In the medium term, stabilization may occur through investment, field rehabilitation, and improved extraction technologies. Downstream and midstream segments are likely to grow steadily, driven by infrastructure development and industrial demand. Overall, long-term performance will depend more on efficiency, digitalization, and foreign investment than on resource expansion.
