Kazakhstan’s national oil company KazMunayGaz and Hungary’s MOL Group have agreed on the volume of Kazakh oil to be delivered by pipeline to Budapest, though negotiations over pricing are still ongoing. In February, Hungary reached an agreement to import Kazakh crude following the European Union’s decision to completely phase out Russian oil imports by the end of 2027. However, six months after the agreement was reached, the timing of the first deliveries remains unclear due to unresolved pricing discussions.
Speaking at an industry event in Almetyevsk, a Russian oil town, KazMunayGaz executive chairman Askhat Khasenov stated that both companies had agreed on the volume of trial oil shipments, though he did not reveal the specific amount. He explained that the schedule for shipments would depend on the commercial terms, which are still under discussion. A KazMunayGaz spokesperson told Upstream that the company could not offer any further comments at this time.
Since 2023, Kazakhstan has been sending crude oil to Europe through the Russian trunkline system and the northern section of the Druzhba pipeline, which passes through Russia, Belarus, and Poland to reach Germany. However, to supply oil to Hungary, KazMunayGaz must use the southern section of the Druzhba pipeline, which runs through Belarus and continues through Ukraine.
Russian crude shipments through the northern Druzhba pipeline stopped in early 2023 after Poland and Germany implemented the EU’s ban on Russian oil. However, oil has continued flowing through the southern leg, as Hungary, Slovakia, and the Czech Republic were granted exemptions from the embargo due to their landlocked geography and limited access to alternative supply routes. While the Czech Republic ended Russian oil imports via Druzhba earlier this year, Hungary and Slovakia still receive Russian crude.
Although Hungary has opposed the EU’s initiative to end Russian oil imports, it has secured alternative sources through the Adria Pipeline, which connects to a marine terminal on Croatia’s Krk island. At the same time, Hungary aims to maintain supply through the Druzhba pipeline and is collaborating with Serbia on a joint pipeline project. Scheduled to begin operations in 2028, this planned pipeline will extend Druzhba into Serbia and is expected to have a capacity between 80,000 and 100,000 barrels per day. Upstream has contacted MOL for comment.
