The war in Ukraine and subsequent Western sanctions have fundamentally altered trans-Eurasian commercial geography. As Russian trade channels reorient eastward, landlocked “middle powers” across Central and Inner Asia are demonstrating that the reliance on traditional transit and energy monopolies is no longer mandatory.
While spanning Inner and Central Asia, Kazakhstan and Mongolia face nearly identical middle power constraints caused by their lack of access to open seas as resource-rich states trapped between Russia and China. Rather than being trapped merely as geographic buffers between Moscow and Beijing, both nations are actively using cross-border trade and institutional ties to protect their economic sovereignty. By leveraging strategic positions across emerging Eurasian energy networks, these middle powers have built overlapping commercial ties that allow them to negotiate with major powers on their own terms.
Comparing the two major Eurasian gas pipeline networks reveals how these landlocked states use distinct structural mechanisms to achieve this strategic manoeuvrability. Central Asian states operate primarily as direct natural gas exporters. The Central Asia to China gas pipeline network allows Turkmenistan, Uzbekistan, and Kazakhstan to sell gas directly to Chinese industrial hubs. Planned infrastructure projects, including Line D across Tajikistan and Kyrgyzstan, further diversify regional export routes. Direct export capacity enables Central Asian governments to secure long-term state revenues and attract substantial foreign capital, giving them structural leverage as indispensable energy suppliers. This system functions as a modern Silk Road where energy resources and critical minerals replace historical trade goods.
While Central Asian states like Kazakhstan gain leverage by directly exporting their own energy, Mongolia emerged as a potential transit corridor for Russia’s proposed Power of Siberia 2 pipeline, whose transit section across Mongolian territory is called the Soyuz Vostok, translating to the Union East. At first glance, hosting a pipeline connecting Russia directly to China appears to bind Mongolia strictly to its immediate neighbours. Yet, as its name suggests, this transit role operates within a broader framework of strategic balancing. While long negotiations between Moscow and Beijing might seem to leave transit states vulnerable to economic concessions, the true leverage of a middle power emerges through its third neighbour partnerships. As Western and Asian powers, including France, Japan, and the United States, commit billions of dollars to local uranium extraction and critical mineral supply chains, they have a direct geopolitical stake in ensuring the host nation’s economy is not coerced or marginalized. This financial backing gives local political leaders the leverage they need to resist unilateral demands from neighbouring capitals. Controlled cooperation on regional energy corridors generates immediate transit revenue, while foreign capital investments build independent domestic wealth, allowing these landlocked middle powers to gradually escape the hand-to-mouth reliance that comes from single-source energy monopolies.
To sustain essential regional trade with Russia, which is now isolated by extensive Western sanctions over the war in Ukraine, Central Asian and Mongolian commercial banks increasingly adopt cross-border local currency trade settlements, including the Kazakh tenge, Mongolian tügrik, and Chinese yuan. By shifting regional energy clearing out of Western dollar networks while simultaneously enforcing strict sanctions compliance to align with international treasury standards, these middle powers shield their domestic institutions from any added Western penalties while preserving access to Western capital markets.
Recent diplomatic movements across Inner Eurasia demonstrate the broader evolution of their institutional hedging, where these middle powers are turning their joint economic ties into collective bargaining leverage. Rather than trying to emulate maritime export strategies ill-suited for landlocked geography, Ulaanbaatar recognizes that its long-term economic security aligns with overland Eurasian trade routes. This convergence drives interest in expanding traditional diplomatic formats like C5+1, which groups the five Central Asian republics (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) to collectively negotiate with major global powers. The expansion of this to a proposed C6+1, integrating Mongolia, would further reinforce Mongolia’s sovereignty, creating transformative policies that changes its role as a passive observer in the region to an active partner. By uniting with these Central Asian republics, Mongolia and neighbouring middle powers present a unified economic front, reinforcing Mongolia’s Third Neighbor Policy and Kazakhstan’s Multi-Vector Diplomacy, which are inherently designed to use diversified investments, aid, and cooperation with multiple global partners rather than depending on a single partner. This supports Mongolia’s long-term development agenda, Vision 2050, along with that of Kazakhstan’s 2050 Strategy, which has a similar goal of becoming leaders in social development, economic growth, and quality of life. For both nations, this path begins with the integration of the Middle Corridor.
Landlocked middle powers across Central and Inner Asia are actively reshaping the Eurasian political economy. This reality was seen most recently with Mongolian President Khurelsukh and Kazakh President Tokayev meeting and making Kazakhstan Mongolia’s first and only formal strategic partner in Central Asia. Kazakhstan is backing 100 percent of Mongolia's wheat needs, securing fuel, and planning to take their trade toward $500 million. Through pipeline leverage, compliant banking systems that allow local-currency trade, and expanded multilateral diplomacy, these nations prove that geographic isolation does not prevent strategic autonomy. International financial institutions should prioritize technical assistance and funding for domestic gas distribution networks and grid modernization in landlocked transit states. Western policymakers should maintain direct advisory channels with regional commercial banks to enforce sanctions compliance on Russia without cutting off everyday trade access for local economies. Finally, diplomatic partners should support initiatives that integrate Mongolia into Central Asian regional dialogues under a C6+1 setup, engaging landlocked Eurasia as an interconnected, proactive economic group.
Edited by Doha Yousaf