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Taliban plan regional energy trade hub with Russian oil in mind

May 2, 2024 at 11:53 am

A picture shows export oil pipelines at an oil facility on February 23, 2016 [STR/AFP via Getty Images]

The Taliban government in Afghanistan has agreed with Kazakhstan and Turkmenistan to build a logistics hub in the west of the country aimed at making the country a major logistics point for regional exports, including oil from Russia to South Asia, Reuters has reported. The announcement was made by Afghanistan’s acting minister of commerce.

Following a meeting between representatives of the three countries in the Afghan capital last week, Nooruddin Azizi said that technical teams would draw up a written agreement within two months on the formal plans for the hub, which all three countries would invest in. The move follows six months of talks.

As foreign aid to Afghanistan falls and the predominantly agricultural economy is marred by persistent drought, the internationally-unrecognised Taliban government has faced questions over how to fund development and avoid economic stagnation.

According to Azizi, the new hub will be part of broader efforts to take advantage of Afghanistan’s strategic location. Once a thoroughfare for the ancient Silk Road trade route, it lies between South and Central Asia and shares borders with China and Iran. No date was announced for when the hub is expected to be operational.

“Based on our discussions, a logistics centre is going to be established in Herat province, which can connect the north to South Asia,” explained the minister. He added that the government in Kabul is eyeing the millions of tons of oil it expects Russia to be selling in coming years to South Asian countries, particularly Pakistan, which will pass through the new hub. “The three countries have done their best to prove Afghanistan’s claim as a connectivity point. Reaching Pakistan through Afghanistan will be the best option.”

Azizi added that they were focused on Russia’s petroleum exports and that Kazakhstan was also planning to export goods through Herat into South Asian markets.

Kazakhstan’s trade ministry pointed out in a statement to Reuters that it wanted to develop roads and a railway through Afghanistan to connect with South Asia and the Gulf, with the hub serving as an important logistics point.

“The creation of the hub will allow for the development of multi-modal services by consolidating truck shipments in the dry port where they will be sorted and sent along railroads on the North-South corridor to sea ports in the Gulf, Pakistan and the Indian Ocean towards India,” said the Kazakh ministry.

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Turkmenistan’s government did not immediately respond to a request for comment and Moscow did not respond to a request for comment as it was a Russian national holiday. Although Pakistan is a major trading partner with Afghanistan and has signed on to regional energy connectivity agreements, its foreign office and energy minister did not respond to a request for comment. Islamabad has had strained relations with the Taliban in recent years over accusations that Afghanistan is harbouring anti-Pakistan militants, which Kabul denies.

Cash-strapped Pakistan last year became Russia’s latest customer, snapping up discounted crude oil that has been banned from European markets due to Russia’s war on Ukraine. Afghanistan also buys oil, gas and wheat from Russia at discounted rates.

Azizi said that the Afghan government is also speaking with the Chinese authorities on building a road through the remote, narrow Wakhan corridor that connects Afghanistan with China and that they hoped Afghanistan would eventually develop into a route for trade between China and Iran. He concluded by saying that Afghan commerce ministry officials had been sent to China recently for training.