Russian gas supplies through Ukraine to Europe face sudden halt – Unexpected opportunity for Hungary?
The halt of Russian gas supplies through Ukraine has shaken Europe’s energy landscape, but Hungary’s strategic investments in the Turkish Stream pipeline and interconnectors have positioned it as a key transit hub. With its gas system tripling in value, Hungary could capitalise on this shift if it improves its regulatory environment.
Russian gas supplies face sudden halt
Index reports that Russian gas supplies from Ukraine to Europe have come to a sudden halt, dramatically shaking up the region’s energy dynamics. Hungary, in particular, has seen the value of its gas system triple almost overnight, according to a market insider. This shift follows Gazprom’s announcement on 1 January that it can no longer transport gas through Ukraine due to legal and technical constraints, forcing the pipeline to shut down.
Ukraine has said it’s willing to reopen the route, but only if the gas isn’t Russian and payments are postponed until the war ends. Meanwhile, Hungary still gets Russian gas through the Turkish Stream pipeline. The disruption has also uncovered long-hidden financial details, with Ukraine losing USD 800 million (EUR 774 million) a year and Russia taking a massive USD 6 billion (approximately EUR 5.8 billion) hit. Amid this geopolitical turmoil, Hungary finds itself in a position to make the most of this unexpected opportunity.
Tension is rising in Slovakia too
The halt in Russian gas supplies through Ukraine has caused economic turmoil across Europe, with Slovakia losing an estimated USD 600 million (EUR 580 million) annually in transit fees and tensions rising over Slovak Prime Minister Robert Fico’s visit to Moscow, which angered Ukrainian nationalists. While Austria and Slovakia feel the brunt of the contract’s termination, Hungary has shifted to the Turkish Stream pipeline. The EU, once supportive of previous agreements, is now hesitant to back extensions, leaving Europe to consider three options: replacing Russian gas with LNG, sourcing Azeri gas via Ukraine, or negotiating a new agreement between the EU, Ukraine, and Russia.
Hungary still relies on Russian gas
The disruption of Russian gas supplies has escalated risks, with Ukraine seizing the Suzda metering station and concerns that pipelines could become military targets. Despite this, Hungary remains reliant on Russian gas, securing 6.7 billion cubic metres this year through a long-term contract signed in 2021. At the St Petersburg Gas Forum, Foreign Minister Péter Szijjártó emphasised the physical necessity of energy supply over ideology and reiterated Hungary’s commitment to diversifying routes while ensuring competitive pricing.
Hungary’s unexpected opportunity
Hungary’s strategic role in the transport of Russian gas to Europe has grown significantly following the phasing out of Nord Stream pipelines and the shutdown of the Russian-Ukrainian-Slovak transit. The Turkish Stream pipeline, entering the EU via Hungary’s Serbian border, remains the sole route for Russian gas to Europe. Recent investments in interconnectors, including a Hungarian-Slovenian agreement in 2023, have further enhanced Hungary’s gas infrastructure, tripling its value. Market experts suggest Hungary could become a major gas trading hub if it improves regulatory predictability and reduces trader-deterring fees like the surveillance charge of the MEKH (Hungarian Energy & Utilities Regulatory Agency). With its strengthened position, Hungary has the potential to become a regional leader in the gas market.
Read also:
- Breaking the myth: Russian gas costs Hungary more than alternatives
- Russian gas supplies to Austria disrupted: Will this threaten Hungary’s gas supply?
Featured image: depositphotos.com
Well done P.M. Orban. The people of Hungary will be warm and able to cook their food. This is the difference between being subservient to Brussels or putting the interest of the citizens first. Hungary is lucky to have P.M. Orban. Hungary is lucky that Premier Putin who believes in coexistence. The EU is literally holding a gun to the head of Austrians and Slovaks, that is totally unacceptable.
It would be interesting to know how much more Germany is paying for energy.
Buying Russian gas funds Putin’s war plain and simple. If Europe would keep buying his gas it would give him even greater sums of funding for his military to make further attacks on Europe starting with the Baltics and Moldova and maybe even Poland. Putin is the 21st century Hitler and is bent on imperialist expansion. Right now a topic of conversation on Russian television programs is which European city to nuke first. Do not believe anyone who tries to tell you that Putin believe’s “co-existence”. He is attacking Europe at this moment with saboteurs and assassins, cutting energy and telecommunications cables in the Baltic Sea and using cyber attacks against Europe and North America. Hungary is likely a lost cause now under Russian control. The rest of us will protect ourselves from Russia.
President Putin believes in co-existence? Really? Tell that to the Ukrainians. I’ll try whatever you’re smoking, it sounds like a real high.
The Ukrainian war, regardless of how or when it ends, has already changed the economic face of Europe. There will be no “business as usual” or “peaceful coexistence” with Russia for decades, because the leadership of Russia does not want that. Obviously, the economy of Europe is very complex and speaking about it is even more complex, but Hungary’s role in that complexity is small and will continue to shrink while Hungary feeds its addiction to Russian energy resources. When it finally shrinks to nothing, pálinka will be made in Moscow.
“Russian gas supplies from Ukraine to Europe have come to a sudden halt.”
That’s one way of putting it.
Or we could say what it is: Ukraine’s vicious blackmail of Europe, which doesn’t put even a little kink in the Russian economy but does severely hurt the ordinary people of Slovakia and a few other countries.
Zelensky should be told to reopen the line immediately as well as to go sit down with Putin and hash out a peace treaty, or he won’t see another dime or bullet in aid. Instead, the E.U. and N.A.T.O. keep sending him more billions of dollars and advanced weapons, which he has the effrontery to demand young European men come fight in Ukraine! Whose interests are these people working in?!? Not yours and mine, that’s for damn sure.