Oil and Gas Economics in Central Asia: from Resource Dependence to Diversified and Sustainable Growth

Central Asia's oil and gas sector stands at a pivotal crossroads: abundant hydrocarbon reserves have historically underpinned economic growth, yet over-reliance on resource revenues exposes governments to price volatility, constrains institutional development, and impedes the structural transformation needed for long-term prosperity. This article examines the economic dynamics, policy landscape, and strategic transition pathways of the oil and gas sector across Central Asia, with particular focus on Uzbekistan as a representative transition economy. The study employs a mixed-methods approach combining quantitative indicator analysis (2019–2024), systematic policy document review, and structured stakeholder consultation with 21 organisations. Findings reveal measurable progress in reducing fiscal hydrocarbon dependence, attracting foreign direct investment, and improving energy efficiency, yet significant structural barriers including ageing Soviet-era infrastructure, insufficient downstream processing depth, and underdeveloped carbon governance mechanisms require coordinated policy intervention. The paper proposes a five-pillar strategic framework for sector modernisation, encompassing regulatory reform, downstream capacity investment, energy efficiency acceleration, digital resource management, and international financing partnerships. The conclusions provide actionable guidance for policymakers, multilateral development banks, and private sector actors engaged in Central Asia's energy transition.