Taliban Gets Into The Oil Game

The Taliban has just opened the spigot on five new oil wells in Afghanistan after the U.S. military withdrew from the country during the Biden administration. The new wells were opened in the Zamrad Sai area of the Amu…

Francis KapperJun 2, 20264 min read

Energy

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The Taliban has just opened the spigot on five new oil wells in Afghanistan after the U.S. military withdrew from the country during the Biden administration.

The new wells were opened in the Zamrad Sai area of the Amu Darya oil basin in the Jawzjan province in northern Afghanistan, the Islamic Emirate of Afghanistan’s Ministry of Mines and Petroleum said in a press release. The entire project has been handled solely by Afghan engineers, Ahmad Jan, adviser to the Ministry of Mines and Petroleum, said in the release.

This is only the beginning of Taliban-led oil production. So far, the Taliban has only opened five of the proposed 12 wells in the region, according to the press release.

“ no meaningful effect on the global market, even if production expands substantially,” J.D. Foster, a former senior fellow in the economics of fiscal policy at the Heritage Foundation, told the Daily Caller News Foundation. “It’s essentially a rounding error compared to the renewed flows from Venezuela and eventually through the Strait of Hormuz.”

The U.S. completed its withdrawal from Afghanistan on Aug. 30, 2021, when the final U.S. military aircraft departed Kabul, according to the Pentagon.

The White House, the U.S. Treasury, the Taliban Ministry of Mines and Petroleum and Taliban spokesman Zabihullah Mujahid did not respond to a request for comment. The State Department could not provide a comment before publication.

Videos circulating on X appear to depict a ceremonial opening of the well, in which a man opens the valve to a pipeline, and oil flows into an open container.

‘Roughly 8,800 Barrels Per Day’

Afghan engineers have discovered new oil and gas deposits in the region after conducting roughly 250 miles of seismic surveys in the Zamrad Sai area, according to the press release. This new development could lead to increased global oil production if the newly found oil and gas deposits are harvested at scale.

“It’s great to see Afghanistan making a new find in the Amu Darya basin,” Energy public policy analyst David Blackmon told the DCNF. “With the global market remaining dangerously undersupplied due to the closure of the Strait of Hormuz, every little bit of new production counts.”

One expert told the DCNF this development could be significant for the local economy, but it will not move the needle on the global economy.

“If the Taliban activate all twelve wells and hit the advertised 1,200 tonnes a day, you’re looking at roughly 8,800 barrels per day, or about a quarter of consumption,” Steve Hanke, a professor of applied economics at Johns Hopkins University, told the DCNF. “That is genuine import substitution for a country that has historically produced essentially no oil, and for an economy of under $20 billion it is not trivial. If all goes according to plan this will be a modest move toward fuel self-sufficiency at best, not an oil boom.”

China invested $49 million in the Afghan oil production, U.S. government-funded Voice of America reported Feb. 6, 2024; however, the Chinese Embassy in Washington told the DCNF it was not familiar with the new wells. The wells were developed without foreign interference, Pajhwok Afghan News, a local Afghan news agency, reported on Thursday.

One expert said China’s investments in the region will not gain Beijing any ground with the Taliban.

“Not in the least, despite China’s efforts,” Foster told the DCNF. “Nobody influences the Taliban government materially but the Taliban, not even Allah.”

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