TEHRAN – In a significant move toward deepening energy and economic ties, Iran and Kyrgyzstan have agreed to jointly review a proposal for the construction of an oil refinery in Kyrgyzstan. The announcement came on the sidelines of the Shanghai Cooperation Organization (SCO) and Shanghai-Plus summit held in Kyrgyzstan on Monday.

Iran's President Masoud Pezeshkian, who met with Kyrgyz President Sadyr Japarov on the summit's margins, confirmed that Tehran has reviewed the proposal positively and agreed to its principle. "Kyrgyzstan's proposal for the joint construction of a refinery in this country has been reviewed positively, and Iran agrees with the principle of this proposal," Pezeshkian stated.

Under the proposed framework, Iran would supply the crude oil required for the refinery, while the resulting petroleum products would be divided between the two nations. The Iranian president described this model of cooperation as a timely opportunity to elevate the level of economic and energy collaboration between the two countries.

The proposal comes at a critical juncture, as energy cooperation has been a central pillar of bilateral relations in recent years. Kyrgyzstan, which currently depends heavily on imports to meet its domestic oil and petroleum product needs, stands to benefit significantly from domestic refining capacity. If finalized, the partnership could expand beyond simple oil and product trade into joint investment, refining operations, technical and engineering services, and the marketing of petroleum products.

President Japarov welcomed the expansion of economic and energy cooperation with Iran and extended an invitation to capable Iranian companies active in oil exploration to bring their expertise to Kyrgyzstan. This invitation is expected to pave the way for a greater Iranian corporate presence in Kyrgyzstan's oil projects and the utilization of Iranian technical and engineering capabilities across various sectors of the Central Asian nation's petroleum industry.

Expanding bilateral economic ties

The refinery proposal is part of a broader push to strengthen economic relations between the two countries. In early August, Iran's Minister of Industry, Mining and Trade, Seyyed Mohammad Atabak, met with Kyrgyzstan's Minister of Economy and Commerce, Sydykov Bakyt Tolomushevich. During that meeting, both sides emphasized the development of trade exchanges, joint investment, and the expansion of cooperation in industry, mining, energy, transport, and free zones.

The two ministers underscored the vast capacities for economic cooperation and stressed the importance of advancing trade and investment within the framework of regional agreements, including the Eurasian Economic Union (EAEU) and the Shanghai Cooperation Organization. They also discussed joint production for export to third-country markets, increased collaboration in the export of knowledge-based products, pharmaceuticals, and medical equipment, as well as expanded cooperation between free zones.

Mining, energy, and transit cooperation

In the mining and energy sector, Kyrgyzstan's mineral wealth was a key topic. Iran announced its readiness to cooperate in exploration, extraction, processing, provision of technical and engineering services, modernization of mining industries, and the transfer of technical knowledge.

On the transport and transit front, the two sides emphasized the activation of the Bandar Abbas–Osh railway route, the establishment of direct flights, the reduction of transit costs, and the completion of regional corridors. They also highlighted the importance of participating in China's "Belt and Road" initiative and utilizing Iran's strategic transit position to connect Kyrgyzstan to regional and international markets.

Banking and financial infrastructure

To facilitate this expanding economic partnership, both countries agreed on the development of banking, logistics, and transport infrastructure. Other key agreements included holding a joint banking committee, utilizing national currencies in bilateral transactions, establishing joint investment funds, and employing modern financing methods.

As Iran and Kyrgyzstan continue to build on their growing partnership, the proposed joint oil refinery stands as a potential flagship project—one that could redefine the contours of their economic and energy cooperation for years to come.