Escalating US-Iran Tensions Threaten Central Asia's Economic Interests

The United States and Iran have exchanged their heaviest barrage since July in a renewed escalation of their conflict. The US struck military targets along Iran's southern coast, while Tehran responded with missile and drone attacks on US assets in Kuwait, Jordan, Bahrain, and Iraq.

Central Asia is at risk from this increased tension, particularly when it comes to oil prices and transport corridors through the Persian Gulf. All five countries in the region will likely feel economic effects, although some may initially benefit from higher oil prices.

Kazakhstan could profit from rising oil prices, but existing logistical constraints limit its ability to capitalize on this opportunity. Ukraine's attacks on the Caspian Pipeline Consortium have reduced production, and shipments through the Baku-Tbilisi-Ceyhan pipeline are not enough to compensate for a major disruption to the CPC.

Tajikistan is already struggling with fuel shortages due to Ukrainian attacks targeting Russian refineries. The country asked Iran for over 2.5 million tons of crude oil and fuel, including 300,000 tons of diesel and 150,000 tons of gasoline. Renewed escalation could make this logistics chain more difficult and expensive.

Uzbekistan's dependence on Iran is primarily logistical, with $3.9 billion worth of imports reaching the country in transit through Iran in 2025. The region is more important to Uzbekistan from a logistics perspective than direct trade, which remained small at $2.1 billion in 2025.

Turkmenistan has invested heavily in transport infrastructure projects aimed at increasing freight flows toward Iran and India. However, relying on Iran as a transit country poses risks due to the renewed instability in the region.