Tensions between OPEC+ and Kazakhstan have been mounting, as oil prices have fallen.  Kazakhstan and some OPEC+ members have defied output quotas, prompting OPEC+ to increase production by 411,000 barrels per day in June.  The new target comes after disagreements between OPEC+ members, with countries like Iraq, the United Arab Emirates, and Kazakhstan defying initial quotas. The recent move by OPEC+ is seen as a method to rein in Kazakhstan and other renegade members, by making Astana’s increase in oil production less lucrative than it had hoped for.  Crude oil futures stood at $73 per barrel in January but have dropped to $58 per barrel, since the oil oligopoly’s increased production announcement earlier this week. There have since been reports of Kazakhstan potentially exiting OPEC+.

Since 2022, Saudi Arabia, the unofficial leader of OPEC+, has pushed for collective production cuts to around 5.85 million barrels per day (bpd). Kazakhstan’s crude oil production surged to 1.85 million bpd in March above its average 1.74 million bpd last year. Its March 2025 output exceeded the 300,000 bpd ceiling set by OPEC+. 

Kazakhstan’s recently appointed energy minister, Erlan Akkenzhenov, said in an interview with Reuters that his country was unable to reduce production at its three major oil fields, Tengiz, Kashagan, and Karachaganak, because they are controlled by foreign major oil companies. Regardless, Kazakhstan would “act only in accordance with [its] national interests,” Akkenzhenov stated. 

With crude oil accounting for 52% of its exports in 2024, a continuous fall in oil prices will be problematic for Kazakhstan. Astana’s current national budget is based on oil priced at $75 per barrel.  Current prices have fallen below that threshold and experts are concerned that, if prices fall below $50 per barrel, Kazakhstan will have to draw from its reserves and weaken the Kazakh Tenge. 

Even prior to President Trump’s tariff policies and tensions with OPEC+, Kazakhstan was already preparing for a gloomy economic outlook.  Inflation in the country has been gradually climbing to nearly 9%. The National Bank of Kazakhstan hopes to stabilize inflation at 5% in the near term. 

In late January, the government proposed raising the value-added-tax (VAT) from 12% to 20%. VAT is a tax on the value added in each production stage of a good or service. The government has reasoned that doing so would increase the share of VAT payers that currently only stands at just 6%. While raising taxes and cutting back on spending can slow inflation, raising VAT specifically could also raise prices, hurting low-income consumers and small businesses. 

Kazakhstan could also draw from its gold and foreign exchange reserves to soften financial shocks, as it was forced to do during the global pandemic and after Russia’s second invasion of Ukraine.  Nevertheless, in the past 10 years, the country has managed to raise the value of its foreign reserves from $29.2 billion to $45.8 billion, and that could continue to grow if Kazakhstan is able to gain additional revenues from critical minerals and Middle Corridor freight transit fees. 

With an economy primarily dependent on oil revenues, President of Kazakhstan Kassym Jomart-Tokayev is concerned by current global economic trends.  He has stated that the world might not only be heading into another recession but also “a possible fundamental crisis affecting the foundations of the world economy, with the most serious consequences for the entire system of international relations.” He also reaffirmed that Kazakhstan would stay the course towards comprehensive modernization.