Jun 20, 2025
Russia is prepared to deliver crude oil to Serbia through a new pipeline in Hungary.
Russia is prepared to supply crude through a new pipeline connecting Serbia and Hungary, expected to be completed in 2027, if it proves necessary and competitive, according to Deputy Prime Minister Alexander Novak on June 19 at the St. Petersburg International Economic Forum.
Serbia and Hungary are working to expedite a pipeline that would allow Russian crude to reach Serbia's Pancevo refinery, reducing its reliance on Croatian infrastructure for imports.
The Pancevo refinery, the only one in Serbia with a capacity of 96,000 b/d, has solely depended on the Adria pipeline to the Croatian port of Omisalj for its crude, primarily sourcing Russian heavy Urals crude. However, it had to stop seaborne Russian oil imports after the EU sanctions imposed in December 2022.
Current EU sanctions permit countries to continue importing Russian crude via direct pipelines, although the European Commission has suggested a complete phase-out by 2027.
At the forum, Novak endorsed the new pipeline project that will link Szazhalombatta in Hungary to the Serbian refinery in Novi Sad, calling it "an important project" that would help diversify Serbia's supply, asserting that Russia is ready to supply the pipeline if it is economically viable for Serbia.
The pipeline plans have gained attention in Serbia following US sanctions imposed in January on Russian interests in its refinery, targeting the energy firm Gazprom Neft and its subsidiaries, leaving the Pancevo refinery's owner, NIS, non-compliant.
With multiple extensions granted, Serbia now faces a June 27 deadline for the sanctions, which could disrupt crude supplies if NIS cannot pay the Croatian pipeline operator.
In response to the looming US sanctions, Serbia and Hungary approved a feasibility study for the new 4 million-5 million mt/year pipeline in April, although final investment decisions remain pending.
The oil pipeline will be co-developed by Hungary's MOL, which receives Russian crude via the Druzhba system, and Serbian operator Transnafta.
As one of the few European refiners still using Russian crude, MOL has been under pressure from US policymakers to diversify its supply, yet has not committed to excluding Russian oil from its operations.
The company aims to enable its Danube and Bratislava refineries to function without Russian oil by 2026, while emphasizing the need to maintain both Adria and Druzhba pipeline connections.
Data from Croatian operator Janaf indicates that non-Russian crude contracts for MOL's Slovakian and Hungarian refineries account for only 15% of their combined capacity, with MOL citing high Janaf pipeline fees as a limiting factor.
During the St. Petersburg forum, Szijjártó reiterated Hungary's need for continued supplies from the Druzhba pipeline to ensure its energy security, emphasizing the importance of keeping both the Druzhba and Janaf pipelines operational.
Serbia and Hungary are working to expedite a pipeline that would allow Russian crude to reach Serbia's Pancevo refinery, reducing its reliance on Croatian infrastructure for imports.
The Pancevo refinery, the only one in Serbia with a capacity of 96,000 b/d, has solely depended on the Adria pipeline to the Croatian port of Omisalj for its crude, primarily sourcing Russian heavy Urals crude. However, it had to stop seaborne Russian oil imports after the EU sanctions imposed in December 2022.
Current EU sanctions permit countries to continue importing Russian crude via direct pipelines, although the European Commission has suggested a complete phase-out by 2027.
At the forum, Novak endorsed the new pipeline project that will link Szazhalombatta in Hungary to the Serbian refinery in Novi Sad, calling it "an important project" that would help diversify Serbia's supply, asserting that Russia is ready to supply the pipeline if it is economically viable for Serbia.
The pipeline plans have gained attention in Serbia following US sanctions imposed in January on Russian interests in its refinery, targeting the energy firm Gazprom Neft and its subsidiaries, leaving the Pancevo refinery's owner, NIS, non-compliant.
With multiple extensions granted, Serbia now faces a June 27 deadline for the sanctions, which could disrupt crude supplies if NIS cannot pay the Croatian pipeline operator.
In response to the looming US sanctions, Serbia and Hungary approved a feasibility study for the new 4 million-5 million mt/year pipeline in April, although final investment decisions remain pending.
The oil pipeline will be co-developed by Hungary's MOL, which receives Russian crude via the Druzhba system, and Serbian operator Transnafta.
As one of the few European refiners still using Russian crude, MOL has been under pressure from US policymakers to diversify its supply, yet has not committed to excluding Russian oil from its operations.
The company aims to enable its Danube and Bratislava refineries to function without Russian oil by 2026, while emphasizing the need to maintain both Adria and Druzhba pipeline connections.
Data from Croatian operator Janaf indicates that non-Russian crude contracts for MOL's Slovakian and Hungarian refineries account for only 15% of their combined capacity, with MOL citing high Janaf pipeline fees as a limiting factor.
During the St. Petersburg forum, Szijjártó reiterated Hungary's need for continued supplies from the Druzhba pipeline to ensure its energy security, emphasizing the importance of keeping both the Druzhba and Janaf pipelines operational.