Pipeline Dispute between Ukraine and Hungary Delays EU’s €90bn Loan

Sat Mar 21 2026 11:28:51 GMT+0000 (Coordinated Universal Time)

A severe standoff between Ukraine, Hungary, and Slovakia is hindering a crucial European Union loan as they debate over the damaged oil pipeline critical for energy supplies. The discord highlights the broader implications for EU decision-making ahead of upcoming elections.

A dispute between Hungary, Slovakia, and Ukraine is holding up a vital €90bn financial aid package from the EU. The conflict is centered on the Druzhba oil pipeline after damage sustained from a Russian attack, with Ukraine claiming repairs will take time while Hungary accuses Ukraine of political maneuvering. This contention exposes the vulnerabilities in EU's collective decision-making and energy security as they face Russian influence amidst ongoing war conditions in Ukraine.

A bitter dispute pitting Hungary and Slovakia against Ukraine is holding up a crucial €90bn (£77.95bn) EU loan to Ukraine.

No oil has flowed through the Druzhba (Friendship) pipeline, from Russia to Hungary and Slovakia across Ukraine, since the major oil hub at Brody, in western Ukraine, was damaged in a Russian attack on January 27.

While Ukraine argues that it will need six more weeks to repair the damage and restore the oil flow, Budapest accuses Kyiv of stalling, as revenge for Hungary's pro-Russian and anti-Ukrainian position.

The dispute underlines the ability of one or two countries to block EU decision-making. It also shows Hungary and Slovakia facing fuel problems, because they have refused to follow the lead of others and wean themselves off Russian oil since 2022.

The Brody pumping station in Ukraine's western Lviv region is crucially important for the transit of Russian oil to Hungary and Slovakia. Satellite images obtained by the BBC suggest that the Russian strike on January 27 damaged its key part - a huge tank used to store oil necessary to keep the pipeline pressurized and functioning.

This is the biggest oil tank in Ukraine, with a capacity of 75,000 cubic meters. Ukrainian energy expert Henadiy Ryabtsev says damage caused to the pumping station at Brody is severe and is possibly not just limited to the oil tank.

Ukrainian engineers can only work during the day, because of nightly air-raids, and there is also a shortage of experts due to the constant damage from Russian attacks on the Ukrainian energy grid.

In the meantime, Hungary has begun receiving non-Russian seaborne Brent crude from Norway, Saudi Arabia, and Libya through the Adria pipeline from Croatia. But the MOL refineries lack equipment to refine non-Russian oil, which has a lower sulphur content.

The Hungarian government has accused Ukraine of delaying the restoration of the oil flow for political reasons. Hungarian Prime Minister Viktor Orbán maintains close economic and political relations with Moscow, complicating the dynamic as upcoming elections loom.

This situation not only underscores the geopolitical tensions between these nations but also highlights the challenges facing EU unity in addressing energy demands amid the ongoing conflict.