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.
