Hungary and Bulgaria have reached an agreement to continue the transit of Russian gas, despite the recent imposition of US sanctions on “Gazprombank”, the financial institution that processes payments for Russian energy supplies. The deal, reported by Bloomberg, was confirmed by Hungary’s Foreign Minister Péter Szijjártó on December 13. He explained that Hungary pays for Russian gas through Gazprombank, while Bulgaria receives payments for facilitating gas transit.
Bulgaria had previously warned that it would halt gas supplies to Central Europe via its territory unless Gazprom resolved the payment issue. Hungary, which relies heavily on Bulgaria for its energy security due to the TurkStream pipeline, was directly affected by these sanctions. The sanctions also impacted Budapest’s ability to pay for energy, further complicating the situation.
Hungarian Prime Minister Viktor Orban discussed energy cooperation with Russian President Vladimir Putin on December 11, including the possibility of maintaining uninterrupted gas supplies to Hungary despite the US restrictions.
In early 2024, it was revealed that Ukraine would not renew its contract with Gazprom for the transit of Russian gas through its gas transportation system when it expires on January 1, 2025. This adds another layer of uncertainty to energy flows in the region.
The sanctions against Russian financial institutions, including Gazprombank, were imposed by the US Treasury Department in November. Several other countries, including Australia, Canada, New Zealand, and the UK, had already sanctioned the bank. These measures are part of a broader effort to pressure Russia in the wake of its invasion of Ukraine.
As European Union countries search for alternative energy sources, Azerbaijan is seen as a key potential supplier. However, while Russia has expressed willingness to continue gas shipments through Ukraine, the ongoing war has made Ukraine unwilling to negotiate on gas exports through its territory.
