EditHungary’s energy hub ambition collides with Russian dependence reality
Hungary’s import structure reflects a striking dependence: around 80% of its natural gas, 85% of its oil, and 100% of its nuclear fuel come from Russia
Hungary’s energy policy in recent years has been strongly shaped by the vision of becoming a regional energy distribution centre, or “energy hub”. However, recent geopolitical developments have highlighted the lack of a stable foundation for this strategy.
The escalation of conflict in the Middle East, rising global oil prices approaching $100 per barrel, and expectations of a long-term 40% increase in European gas prices have reshaped the environment. At the same time, technical and political uncertainties surrounding the Druzhba oil pipeline and tensions over southern alternative routes have underlined Hungary’s position not as an active distributor, but as a dependent importer.
In this context, energy security is no longer protected by long-term contracts but has become directly dependent on regional and global power dynamics.
Hungary is facing the consequences of delayed diversification and a lack of energy sovereignty. The crisis surrounding the Druzhba pipeline has not yet been resolved, while a new war in the Middle East has further destabilised markets. Energy prices are again rising sharply, recalling the period following the outbreak of the war in Ukraine.
While the European Union has made significant progress in improving energy security – with diversification efforts dating back to the gas crises of 2006 and 2009 – Hungary remains one of Russia’s most persistent partners in Europe.
Russian energy continues to underpin domestic policies such as regulated utility price reductions, which are financed from the state budget. While politically important, this policy has distorted market incentives and hindered modernisation. Artificially low energy prices have discouraged efficient consumption and investment in modern technologies such as heat pumps, while also diverting resources away from renewable energy development and energy efficiency improvements.
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Hungary’s import structure reflects this dependence: around 80% of its natural gas, 85% of its oil, and 100% of its nuclear fuel come from Russia.
Dependence on limited routes
Hungary’s oil supply has largely relied on the Druzhba pipeline, which runs from Russia through Ukraine. This has effectively tied the country’s energy supply to two states that have been at war for more than four years. Since late January, deliveries have been halted following damage caused by Russian strikes on Ukrainian energy infrastructure.
Efforts to resolve the situation have led to intensified diplomatic tensions between Hungary and Ukraine.
The crisis has also highlighted potential alternatives. The Adria pipeline, which connects Hungary to the Croatian coast, represents the most important option for non-Russian oil. However, Croatia does not allow the transit of Russian oil through this route, and disputes have emerged over capacity and transit fees.
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Gas supply is similarly concentrated along a single route. Russian gas reaches Hungary via the TurkStream pipeline through Serbia, following the end of Ukrainian transit at the end of 2024. Although smaller volumes of non-Russian gas can enter the system via LNG terminals in Greece or Turkey, these remain significantly lower than Russian imports.
If this route were disrupted, Hungary’s main alternative would be the Krk LNG terminal in Croatia. While Hungary is physically connected to most neighbouring countries, enabling diversification, the government has not fully utilised these options, citing higher costs.
Energy hub narrative under scrutiny
Despite these structural constraints, the Hungarian government continues to promote the concept of becoming a regional energy hub. Originally a technical term referring to integrated systems for energy production, storage and distribution, the concept has increasingly taken on political and geopolitical meaning.
Government-linked think tanks present Hungary’s strategy as a success, arguing that the country has pursued gradual diversification while building energy connections with Turkey, Azerbaijan, Central Asia, the Western Balkans, and parts of the Middle East.
However, critics point out that this narrative often overlooks the origin of imported energy. While multiple entry points exist, the majority of gas continues to come from Russia, particularly via Serbia.
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The concept also has broader political implications. By positioning itself as a central distribution point, Hungary could extend dependency on Russian energy to neighbouring countries, embedding long-term relationships through infrastructure, contracts, and regional expansion by companies such as MOL and MVM.
At the same time, analysts question whether Hungary can be considered a true transit country. According to Alexander Etkind of the Central European University, Hungary primarily functions as a consumer rather than a transit state, as most imported energy is used domestically.
He also suggested that the energy hub narrative may reflect political messaging or outdated assumptions about pricing conditions linked to historically subsidised Russian energy.
EU phase-out and rising risks
Hungary’s strategy faces further challenges as the European Union moves towards phasing out Russian energy imports by the end of 2027. This will require Hungary to reduce reliance on the very resources that underpin its current model.
Looking ahead, experts expect that future supplies will increasingly rely on LNG, which is more expensive than pipeline gas. This could reduce both volumes and economic advantages.
At the same time, geopolitical developments continue to influence markets. The war in the Middle East is pushing prices higher, while Russia is seeking to redirect exports towards Asia and use energy as a tool of political pressure on Europe.
In this environment, Hungary’s current trajectory risks reinforcing both domestic and regional dependence on Russian energy, while delaying the transition towards diversification, renewables, and energy efficiency needed to ensure long-term security.
The original article in Hungarian by EUalive’s partner atlatszo.hu can be found here.
Caption: A price board shows the government-compensated prices of the Hungarian multinational oil and gas company MOL Group at a petrol station in Budapest, Hungary, 10 March 2026. EPA/ZOLTAN BALOGH
Updated: March 26, 2026 - 06:27
