Hungary Intensifies Dispute With Ukraine Over Druzhba Oil, Threatens to Block €90bn EU Loan

Budapest ties EU financial aid to the resumption of pipeline deliveries as diesel exports are halted and strategic reserves released

Hungary has escalated its confrontation with Ukraine over the suspension of Russian oil deliveries through the Druzhba (Friendship) pipeline, threatening to block a €90 billion European Union aid package for Kyiv until crude transit resumes. In parallel, Budapest has suspended diesel exports to Ukraine and moved to release oil from strategic reserves to cover its own shortfall, underscoring how energy security has become a flashpoint in both EU politics and Hungary’s domestic election calculus.

The dispute stems from the halt of Russian crude flows on January 27, 2026, when a reported Russian drone attack damaged the Druzhba pipeline infrastructure in Ukrainian territory. Ukraine has said the damage forced the shutdown; Hungary and Slovakia — two of the only EU members still importing Russian crude under temporary sanctions exemptions — have repeatedly blamed Kyiv for delaying repairs and politicising energy supply.

Hungary Holds EU Loan for Ukraine ‘Hostage’

On February 20, Hungarian Foreign Minister Péter Szijjártó announced that Budapest will block the disbursement of a €90 billion EU financial aid package for Ukraine, arguing that uninterrupted oil deliveries must be restored before Hungary supports continued assistance. Szijjártó framed the move as a response to what he described as Ukraine’s “blackmail” through the refusal to resume oil transit — a charge Kyiv rejects.

In a video message posted on social media, Szijjártó said Ukraine’s alleged blockade of transit “violates the EU–Ukraine Association Agreement” and that the Hungarian government will not bow to such pressure ahead of upcoming national elections. According to reporting by Xinhua and other outlets, Hungary insists the halt to shipments was not due to technical obstacles.

The loan in question covers budgetary and military support earmarked for Ukraine through 2026–27 and had broad political backing among most EU member states. Hungary’s objection, given the unanimity requirement for EU budget decisions, poses a direct challenge to that consensus.

Diesel Suspended and Reserves Released

In a related move, Hungary and Slovakia suspended diesel exports to Ukraine in mid-February. Hungarian Foreign Minister Szijjártó said diesel shipments would remain halted until crude transit via Druzhba resumes, a stance echoed in joint statements cited by AP and Euronews. Both countries claimed they have sufficient fuel reserves to manage their own needs.

To cushion domestic supply, the Hungarian government also ordered the release of strategic crude reserves — reported by Xinhua to total around 250,000 tonnes allocated for immediate use — and plans to make these volumes available primarily to state-linked oil company MOL Group. Budapest asserts these measures are necessary to safeguard energy security while pipeline transit remains disrupted.

MOL’s own statements to Reuters underline the urgency: the company has pressured Croatian pipeline operator JANAF to allow rerouted crude flows to Hungary and Slovakia via the Adria tanker route, but Zagreb has pushed back against using pipelines for Russian oil, citing compliance with EU and U.S. sanctions regimes.

Competing Narratives on the Pipeline Halt

Ukrainian authorities have attributed the disruption to a drone strike on Druzhba infrastructure, an assertion noted in international reports. They say Russia, not Ukraine, was responsible for the physical damage — a narrative that contradicts claims by Budapest and Bratislava that Kyiv is intentionally delaying the restart.

Hungarian officials, however, have repeatedly characterised the situation as a political decision by Ukraine, with former Prime Minister Viktor Orbán himself suggesting the halt was connected to broader political motives. According to Hungarian press summaries, Orbán even suggested on social media that Ukraine’s alleged decision constituted interference ahead of Hungary’s elections.

Broader EU Political Implications

The dispute has strained diplomatic relations within the EU. A coordinated stance on backing Ukraine has been a hallmark of EU policy since the 2022 invasion; Hungary’s threat to block aid — traditionally supported overwhelmingly by other member states — signals fault lines emerging between EU unity on sanctions and individual states’ strategic priorities.

EU officials have not yet publicly detailed how they will respond to Hungary’s objection, but Brussels continues to emphasise that ensuring energy supply security across the bloc remains a priority even amid sanctions designed to reduce dependence on Russian fossil fuels.