The EU’s latest proposed sanctions against Russia did not, as anticipated, include additional steps to halt pipeline imports of Russian oil and natural gas. However, the intransigence of Hungary and Slovakia over the issue is looking increasingly untenable.
The sanctions package unveiled on Friday, the EU’s 19th, included a ban on importing Russian liquefied natural gas (LNG) by 2026 – a year earlier than the previous proposal – as well as a full transaction ban on key state oil companies, Rosneft and Gazprom Neft. It did not, however, include any further measures on oil and gas reaching the EU by pipeline.
Hungary and Slovakia, the EU’s largest remaining importers of Russia oil and gas, maintain that they are unable to halt such pipeline imports due to security-of-supply concerns and the higher costs of alternative sources.
But in a notable shift it is no longer just the EU but also the US – hitherto a staunch ally of both the countries’ prime ministers since Donald Trump’s reelection – that is urging them to stop financing the Russian war effort.
In his speech to the UN general assembly on Tuesday and in a following meeting with Ukrainian President Volodymyr Zelensky in New York, the US president repeated previous demands for Europe to end its “inexcusable” purchases of oil and gas from Russia. On Hungary in particular, Trump said: “[Hungarian Prime Minister Viktor Orban] is a friend of mine. I have not spoken to him [about importing Russian oil], but I have a feeling if I did, he might stop, and I think I’ll be doing that.”
Just stop (buying) oil
Prior to Trump’s speech at the UN, Hungarian government officials have tended to regard the threats coming out of the US as empty and a pretext for its inaction against the Kremlin.
Orban’s chief of staff, Gergely Gulyas, brushed off the demands at his weekly press conference on September 17, insisting that “Hungary will maintain its energy purchases and Europe would do better to strive for long-term economic cooperation with Russia.”
Hungarian Minister for European Affairs Janos Boka downplayed the significance of his country’s role in the Russian economy. “Our American partners are very understanding of Hungary’s position – more so than some European partners,” Boka told reporters in Brussels. “They understand that the future of the Russian war economy doesn’t depend on Hungary and Slovakia. We’re just 15 million people, contributing less than 2 per cent of the EU’s [gross national income] – it’s not us who are keeping Russia afloat.”
Hungarian Foreign Minister Peter Szijjarto, an open admirer of his Russian counterpart Sergei Lavrov, also pointed out the hypocrisy of EU member states demanding that Hungary halt its imports. EU countries imported Russian crude oil and gas worth 22 billion euros in 2024, as well as roughly 5 billion euros in Russian oil-based petroleum products, according to the Centre for Research on Energy and Clean Air (CREA).
“Hungary openly buys Russian crude oil because we have no other option, while other European countries buy it secretly via indirect routes, because it is cheaper,” said Szijjarto on Friday, as he went on the offensive against the EU’s latest sanctions package.
Zoltan Kiszelly, director of political analysis at the government-aligned Szazadveg Foundation, also rejects the idea of serious US pressure being applied. “Although a bipartisan bill proposes a 500 per cent tariff on countries purchasing Russian oil, President Trump hasn’t acted on it. He uses it as political leverage,” Kiszelly told BIRN.
By contrast, Slovak Prime Minister Robert Fico has chosen not to respond to the threats coming out of the US, but he has long described cutting ties with Russian energy as a “dangerous game” and “economic suicide”. He argues that Slovakia would be unable to secure sufficient oil and gas at reasonable prices elsewhere. Energy specialists dispute this, pointing out that prices are set on international markets, not dictated by Moscow. What matters more for Slovakia are transit fees, which have been lucrative.
Until recently, Slovakia was the first EU country on the route of Russian oil through the Druzhba pipeline and Russian gas via the Brotherhood pipeline, taking a cut from the flows westwards. The state-owned oil transporter Transpetrol recorded revenues of more than 70 million euros in each of the past two years, while gas operator eustream’s takings more than doubled in 2024 to 395 million euros.
Yet beyond the US threats, experts say some painful realities are coming to the fore.
The real danger for Hungary and Slovakia lies with the EU’s goal to phase out Russian energy imports by 2027.
Member states must submit plans by the end of 2025 on how they intend to achieve this. If the governments in Budapest and Bratislava do not present their own exit plans, the European Commission could look to the application of EU tariffs as trade policy instruments against Russian fossil fuels, something that would be decided by qualified majority voting at the European Council, removing the power of veto and leaving little recourse for either government.
Unnamed sources told Bloomberg that measures under consideration by the EU Commission could target Russian oil imports through the Druzhba pipeline unless they are phased out.
The key question, therefore, is whether Hungary and Slovakia can cut or significantly reduce their Russian energy imports by 2027. Energy experts insist that alternatives are available; it is the political will, not the infrastructure, that’s lacking.
“Both countries have the technical capacity to replace Russian energy supplies, but lack political will to go down this route,” said Andrius Tursa, Central & Eastern Europe Advisor for the consultancy Teneo. “A cut in Russian energy supplies would threaten economic interests of influential interest groups supporting Viktor Orban’s and Robert Fico’s governments in Hungary and Slovakia respectively.”
Foot on the gas
Since Russia’s full-scale invasion of Ukraine in 2022, Hungary has actually increased its oil and gas imports from Russia, and established itself as a gas hub for Russian gas, even as the rest of the EU has moved in the opposite direction. While Hungary tends to complain about its geographical location as a landlocked country, countries with similar constraints like Czechia and Austria have managed to make significant progress in reducing their Russian purchases.
“The Hungarian government has failed to support the industry in the last two years to prepare for real diversification,” Tamas Pletser, Erste Group’s oil & gas equity analyst, told BIRN.
Pletser believes it would be relatively simple for Hungary to halt Russian gas purchases. The country has interconnectors with all its neighbours, and the gas corridors are rapidly developing in Western Europe, Romania and in the south. He added that global LNG supply is growing, and prices are expected to drop after 2026, particularly with increased exports out of the US and Qatar.
“Due to the growing oversupply, at the current prices LNG may offer an even cheaper alternative, including regasification and transit to Hungary, to Russian pipeline gas,” Pletser noted.
Fico continues to talk up the supposed benefits of “cheap Russian gas”, even though experts and the opposition say that is a myth: prices are set on global markets. Slovak households have enjoyed subsidised bills since Russia’s invasion of Ukraine, but costs are expected to rise sharply once those subsidies end. Fico has promised to use EU funds to keep bills down in 2026, while dismissing the EU’s LNG imports as expensive and insecure.
Former economy minister Karel Hirman sees it differently. “There is a surplus of gas on the market, and there will be enough even in two years’ time,” he said.
When Ukraine halted Russian gas transit earlier this year, the route into Slovakia shifted. Russian supplies now reach the country via Hungary and the TurkStream pipeline. Rather than engaging with Kyiv, Fico and his economy minister chose to travel to Russia at the end of 2024.
Slovakia is well connected to Europe’s gas grid, with pipelines from all neighbouring states. However, Sakova recently warned that Slovakia is “at the mercy of surrounding states and their projects to increase transmission capacity”.
Slovakia’s state supplier, SPP, has contracts with Russia’s Gazprom until 2034, but also with western majors including BP, ExxonMobil, Shell, ENI and RWE. Those deals, SPP says, are flexible enough to cover demand without Russian supplies. The company prefers imports via Germany and Austria or Czechia, where transit fees are far lower than in Poland.
Capacity constraints
Oil, however, presents a more complex challenge for the two countries.
Hungary and Slovakia rely heavily on Russian crude oil transported via the Druzhba pipeline. Druzhba supplies close to 90 per cent of Hungary’s oil needs and 87 per cent of Slovakia’s.
The latter’s sole refinery, Slovnaft – owned by Hungary’s MOL – produces 5-6 million tonnes of oil products each year, mostly for export. With EU exemptions on Russian oil product exports for Slovnaft now expired, and as the company continues diversifying, it warns that without the Druzhba pipeline it cannot guarantee long-term supply stability or affordable fuel.
But energy analyst Radovan Potocar calls Druzhba “the least reliable” route available to Slovakia, warning that flows could stop at any moment during Russia’s war in Ukraine. He points to alternative options – the Adria pipeline from Croatia, reverse flows from Czechia, or supplies shipped to Ukraine’s port of Odessa and then pumped west through through the Odessa-Brody pipeline, where they would connect to Druzhba.
Austria’s proposal for a new Bratislava–Schwechat oil pipeline was shelved last year, partly over Slovakia’s environmental concerns and partly because Vienna no longer buys Russian crude.
Croatia has been pushing the expansion of the Adria pipeline, which currently supplies Hungary’s MOL with about 1.2 million tonnes of crude oil annually from the Adriatic.
JANAF, the state-controlled operator of Adria, has expressed its willingness to increase the capacity of the pipeline. “Croatia can guarantee today both to Hungary and to Slovakia that it can supply them with more than 12 million tonnes of oil, any blend needed, in order to cater for all the needs for the Szazhalombatta refinery, which is in Hungary, and the Bratislava refinery in Slovakia,” Croatian Prime Minister Andrej Plenkovic said in an interview with CNN on September 15.
“We believe that there is no risk for the supply of oil to two of our neighbouring countries, which we would like to help when it comes to energy security,” he asserted.
To verify Plenkovic’s claims, BIRN asked JANAF whether it had the technical capacity to supply both Hungary and Slovakia with oil. “JANAF is fully technically and organisationally ready to fully meet all the annual needs of MOL’s Central European refineries for crude oil, for which it has given a guarantee to MOL, the Republic of Croatia and the European Union,” JANAF answered unequivocally.
“The tests carried out on the flow of the oil pipeline from Omisalj to the Hungarian border, with a 95 per cent pipeline utilisation and the ability of MOL Group to take over crude oil at the delivery point, guarantee the transport of 12.9 million tonnes per year,” JANAF said, adding that MOL is a long-standing partner of JANAF.
Independent experts, however, continue to raise concerns about capacity issues. “The fact that a pipeline operates at a given capacity for a month is very different from maintaining continuous, long-term operations,” Attila Holoda, a former MOL executive and an ex-deputy state secretary, told the Hungarian investigative news site G7.
The energy analyst Potocar also warns that Slovakia shouldn’t rely solely on the Adria pipeline, noting it has never delivered crude to Slovakia year-round. “If there is a logistical problem, because of limits at the terminal, there may simply not be enough oil,” he told Hospodarske noviny.
In an emailed statement to BIRN, MOL said that last week it and JANAF conducted several joint tests on the pipeline, though the results didn’t yet confirm it is capable of delivering a sufficient quantity of crude oil from the Adriatic Sea to Hungary and Slovakia on a long-term basis. During the tests, the pipeline was not able to operate at the required capacity for more than one to two hours at a time, it said.
“It is important to emphasise that the Adriatic pipeline plays a critical role in supplying Central Europe. However, in order for it to play a greater role beyond its current supplementary function, we must first have a clear understanding of what the Croatian section of the Adriatic pipeline is capable of and what condition it is in. Only then can we determine what is needed for it to reliably transport up to 40,000 tonnes of crude oil per day throughout the year,” the statement said.
Other concerns centre on the political tensions between the two governments and the profits MOL makes from the price differential between Russian Urals crude and Brent oil. Between 2022 and March 2025, Hungary earned close to 900 billion forints (2.3 billion euros) on the price differential between Russian Urals and Brent crude, out of which over 500 billion forints was paid into the Hungarian budget as a windfall tax, while 400 billion remained with MOL, the investigative news site G7 revealed.
Meanwhile, Hungary and Croatia have been at loggerheads since MOL acquired a 49 per cent stake in Croatia’s state energy company INA, including management rights, in 2009. The Croatian government accused MOL’s CEO, Zsolt Hernadi, of bribing the Croatian prime minister at the time, Ivo Sanader, who was sentenced to prison, while an international arrest warrant was issued for Hernadi. The MOL chief executive claims the case against him is politically motivated and denies any wrongdoing, but his international travels have been seriously curtailed by the case. Sanader was released on parole in July after serving 11 years of an 18-year jail sentence.
The energy analyst Pletser concedes “it is a strained relationship” between Hungary and Croatia. “A high-level meeting between the prime ministers would probably help and a long-term contract for yearly 10-12 million tonnes could be signed. The pipeline should be tested gradually, to see whether it can really reliably supply the region with crude oil.”
The Hungarian political expert Kiszelly also sees the problem as more political than practical: “We don’t want to be entirely at Croatia’s mercy, especially when their government regularly votes against Hungary in the EU.”
He also argues that Russian Urals crude is of superior quality to Western variants, providing MOL with a range of valuable byproducts. Moreover, it remains Russia’s last major energy link with an EU member state, preserving Moscow’s hope of eventually returning to the lucrative European market once the war ends.