Hungary threatens to veto a massive $106 billion European Union loan package to Ukraine unless oil shipments through the Russian-linked Druzhba pipeline resume, creating a major diplomatic crisis within the EU.

Hungary Issues Ultimatum Over Energy Supply

Hungarian Foreign Minister Peter Szijjarto declared that his country will oppose the 90 billion-euro EU funding package until oil transit via the Druzhba pipeline resumes. Szijjarto accused Ukraine of blackmailing Hungary by halting oil transit in coordination with Brussels and Hungarian opposition parties to disrupt supplies and increase fuel prices before upcoming elections. He claims blocking oil transit violates the EU-Ukraine Association Agreement and breaches Ukraine’s commitments to the European Union.

The Druzhba pipeline remains a crucial route for Russian oil deliveries to Central European nations, including Hungary, despite most EU countries reducing Russian energy dependence following Moscow’s 2022 invasion of Ukraine. The European Commission adopted the legislative package in January to implement the previously agreed loan for 2026 and 2027, supporting Ukraine’s budgetary and military requirements.

Ukraine Rejects Hungarian Demands

Ukraine’s Ministry of Foreign Affairs firmly rejected what it called ultimatums and blackmail from Hungary and Slovakia over energy supplies. The ministry accused both nations of provocative and irresponsible actions, threatening regional energy security. Ukrainian officials emphasized they remain in constant contact with European Commission representatives regarding damage to Ukrainian energy infrastructure from daily Russian strikes, including impacts on Druzhba pipeline infrastructure.

Financial Package Details and Implications

The Ukraine Support Loan would allocate approximately 60 billion euros for military assistance and 30 billion for general budget support. The funding aims to help Ukraine maintain essential state functions, strengthen defense capabilities, and build resilience during the ongoing war. The loan would be financed through common EU borrowing on capital markets, guaranteed by the EU budget, with potential repayment using immobilized Russian assets within the bloc according to EU and international law.