Hungary vows to fast-track crude pipeline with Serbia after Druzhba drone attacks

Ukrainian attacks on Russia's oil export infrastructure have reinforced Hungary's efforts to build a new pipeline link with Serbia, its foreign minister said on Sept 1.

A statement on X from Hungarian Foreign Minister Peter Szijjarto said that repeated Ukrainian attacks on Russia's Druzhba pipeline system had increased the importance of energy cooperation with Serbia and fast-tracked efforts to build a new pipeline under development by both countries.

Together with Serbian energy minister Dubravka Dedović Handanović, Szijjarto agreed to accelerate the development of a crude oil pipeline link that will effectively extend Russia's Druzhba pipeline system from Hungary's Szazhalombatta into Serbia, according to his statement.

The minister reiterated plans by Hungary to finish its 190km segment of the pipeline by the end of 2027, and called the move a response to recent Ukrainian sabotage attempts.

Serbian and Hungarian officials both previously committed to a 2027 completion date for the pipeline project in May, accelerating a previous 2028 target.

Plans to extend the Druzhba pipeline system were revived in response to new US sanctions targeting Serbia's Russian-owned energy company NIS in January, which have threatened to sever its links to vital payments systems needed to buy its crude.

Russia's Deputy Prime Minister Alexander Novak has previously said the country will be ready to supply the new crude oil link, which is set to be developed by Hungarian energy company MOL and Serbian pipeline operator Transnafta. It is expected to have a capacity of 5 million mt/year, making it sufficient to feed Serbia's 96,000 b/d Pancevo refinery.

The move to forge new energy ties rejects EU pressure on Hungary and Slovakia to join other Central European countries in boycotting Russian oil to compound financial pressure on its economy.

Energy security dilemma

Together with Slovakia and Belarus, Hungary has been left as one of the last European countries to still rely on Russian oil through the Druzhba pipeline network. Since EU crude import bans were enforced in December 2022, all three countries have benefited from sanctions design that exempted pipeline deliveries from restrictions.

However, as Russia and Ukraine have both ramped up the intensity of their drone attacks over the past year, Hungary has faced growing energy insecurity around its pipeline dependence and suffered repeated outages.

"Ukraine has repeatedly attacked the oil pipeline leading to Hungary and Slovakia, and it also shut down a gas pipeline vital for Central Europe's supply," Szijjarto said.

Three consecutive attacks on the pipeline system from Aug. 13-21 suspended oil flows to Hungary and Slovakia for roughly two weeks, and triggered appeals from both countries to the European Commission for support.

However, EU lawmakers have denied any supply risk linked to the attacks, Szijjarto said last week, and the countries have instead heard new appeals to diversify from Russian supplies.

Both landlocked countries have access to non-Russian crude supply through another pipeline link, Adria, which connects to the Croatian port of Omisalj. However, MOL, the sole refinery operator in both countries, has said it cannot run independently of Russian crude until at least 2026, and has not committed to making the switch.