Central Asia Gains as War Shakes Energy Markets and Trade Routes

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Kazakh President Kassym-Jomart Tokayev and his Uzbek counterpart, Shavkat Mirziyoyev, are seen as enjoying the US leader’s favor, with both invited to this year’s Group of 20 summit in Miami in December. 

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“Kazakhstan and Uzbekistan have moved closer to Washington during Trump’s presidency,” said Arkady Dubnov, a Jerusalem based expert on Central Asia.

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The backdrop is helping companies tap an emerging market bond boom, even with Russia’s continuing campaign against Ukraine and the Middle East war next door.

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With a daily output of over 1.7 million barrels of oil, Kazakhstan remains well-placed to lure investors keen to buy energy-linked assets outside the Middle East and Russia. The world’s largest uranium producer holds investment grade status at all three major ratings agencies and the 10-year spread to US treasuries has contracted sharply since March.

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Railroad monopoly Temir Zholy sold $1 billion of bonds this month, its first deal in years ahead of a potential initial public offering. Fintech firm Kaspi.kz just placed $600 million in debt at a record low rate in its history, while it’s also drawn new investors including China’s giant Tencent Holdings Ltd. and US university endowments.

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Neighboring Uzbekistan has launched an ambitious reform program and this month sold a sovereign eurobond at about 12.25%, its lowest soum-denominated borrowing cost to date. The national investment fund, UzNIF, launched the country’s first IPO in London, drawing investors including BlackRock Inc. and Franklin Resources.

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One of the top-ten biggest gold producers, Uzbekistan is enjoying a windfall from elevated prices for the precious metal, offsetting a higher bill for energy imports, said Dmitry Dolgin, chief economist for the region at ING Bank. The nation still has room to boost gold exports, he said. 

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To be sure, inflation remains a problem, with Kazakhstan maintaining a record high interest rate of 18% and Uzbekistan holding its benchmark at 14%. Tajikistan, which reported the region’s lowest inflation at 3.6% in early 2026 and growth of 8.4% in 2025, faces vulnerabilities such as heavy reliance on remittances, mostly from Russia, as well as its landlocked position and dependence on external trade routes, including via Iran, and proximity to Afghanistan, S&P Global Ratings said in February, even as it revised the outlook to positive.

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A global inflation spike could still ripple through the region, according to Tatiana Orlova, lead economist at Oxford Economics Ltd. Higher fuel prices are likely to weigh on some economies, especially those that rely on imports of gasoline and diesel, such as Kyrgyzstan. 

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The Iran war has also disrupted roughly a third of seaborne fertilizer trade, raising the risk of a broader food crisis that could affect Central Asia. Still, the region is partly insulated by strong trade ties with Russia and Belarus, major fertilizer producers.

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In fact, Central Asia has avoided major disruptions to energy supplies and air connectivity, while it benefits from higher energy prices that support exporters such as Kazakhstan and Turkmenistan, Vladimir Osakovskiy, Dubai-based chief economist at Bank of America Corp., said by email. 

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BP Plc said it might return to Kazakhstan with a deal to explore the oil and gas block, while it’s also looking to expand into Uzbekistan.

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Turkmenistan, which holds the world’s fourth-largest natural gas reserves, produced 76.5 billion cubic meters last year and most exports flow to China.