Druzhba Pipeline Is Set to Restart Oil Flows to Europe, Potentially Unblocking EU's Ukraine Loan

Druzhba pipeline restarts Russian oil flows to Europe, unblocking EU loan for Kyiv

Resumption of Druzhba Pipeline Operations and Its Impact

By Krisztina Than and Jan Lopatka

BUDAPEST/PRAGUE, April 22 (Reuters) - Russian oil flowed through the Ukrainian section of the Druzhba pipeline on Wednesday after a halt lasting months, officials said, unblocking a 90 billion euro ($105.79 billion) EU loan urgently needed by Kyiv.

Background: Druzhba Pipeline and Political Tensions

The Druzhba pipeline has become one of the most politically charged pieces of infrastructure in Europe since a Russian drone strike damaged the pipeline in western Ukraine and stopped Russian oil deliveries to Hungary and Slovakia.

Restart of Oil Deliveries

Hungarian oil group MOL said Ukraine has informed it that deliveries of Russian crude had resumed through the Druzhba pipeline.

"MOL expects the first crude oil shipments following the restart of the Ukrainian section of the pipeline system to arrive in Hungary and Slovakia by tomorrow at the latest," it said in a statement.

Pumping began at 12.35 p.m. (0935 GMT), an industry source said, asking not to be named because they were not authorised to speak publicly.

EU Loan Approval Linked to Pipeline Operations

Shortly afterwards, EU ambassadors meeting in Brussels gave approval for the loan that Budapest had previously opposed pending the resumption of oil exports.

Hungary and Slovakia: Difficult Ties with Ukraine

Accusations and Denials

Outgoing Hungarian Prime Minister Viktor Orban and the Slovak government had accused Ukraine of delaying the repairs, which Kyiv denied.

Both countries are heavily dependent on Russian oil and Orban consistently showed support for Russia.

EU Loan and Ukraine's Financing Needs

As a European Union member state, Hungary had the power to block the loan even though it is not contributing to it. The loan will cover two thirds of Ukraine's financing needs in 2026 and 2027 as it seeks to fend off Russia's invasion.

Druzhba Pipeline Capacity and Disruptions

The capacity of Druzhba, which in Russian means friendship, is 1.2 million to 1.4 million barrels a day, with the possibility to increase up to 2 million barrels a day. However, flows fell to a small fraction of that as a result of Western sanctions as well as repeated disruptions from drone attacks.    

"We have fulfilled all our confirmations and commitments. We have done everything ... and the infrastructure has been repaired," Ukrainian Foreign Minister Andrii Sybiha said earlier in the day. "Now we need to move forward together so that Ukraine can receive the loan."

Impact on Other European Countries

Germany and Kazakh Crude Oil Supply

Separately, Germany has been informed that no Kazakh crude oil would reach its PCK Schwedt refinery from May, the economy ministry said. Industry sources had said on Tuesday that Russia was set to stop oil exports from Kazakhstan via the Druzhba pipeline starting from May 1, which would directly hit PCK, one of Germany's biggest refineries.

($1 = 0.8511 euros)

(Reporting by Pavel Polityuk, Anna Pruchnicka, Krisztina Than, Jan Lopatka; Writing by Jan Strupczewski and Ingrid Melander;Editing by Tomasz Janowski and Barbara Lewis)