In 2021, a quarter of the European Union's crude oil imports came from Russia. Four years later, the share is down to 2%. Direct imports have fallen by 91.5%, yet Russian oil molecules still reach Europe through three channels: the shadow fleet, refineries in India and China, and the Druzhba ("Friendship") pipeline. This series investigates how much Russian oil actually enters the Union, who is buying it on Europe's behalf, and what it all means for Hungary.
In 2021, the European Union imported 114.4 million tonnes of crude oil from Russia. That represented 25.8% of the EU's crude oil imports, making Russia the bloc's largest single supplier, ahead of Norway (40.2 million tonnes) and the United States (37.1 million tonnes). (Eurostat)
After the invasion of Ukraine on 24 February 2022, this trade relationship was upended. The EU's sanctions packages progressively dismantled Russian energy imports:
- June 2022: the sixth sanctions package — ban on seaborne crude oil imports
- 5 December 2022: the seaborne crude embargo takes effect, together with the G7 price cap ($60 a barrel) (EU Council)
- 5 February 2023: embargo on refined oil products
- 18 July 2025: the 18th sanctions package — import restrictions on third-country refined products made from Russian crude oil
- 21 January 2026: the import ban on refined products made from Russian crude takes effect
The result: by 2025, Russian oil's share of EU imports was down to 2.2% — 9.7 million tonnes, or 91.5% less than in 2021. (EU Council infographic)
On 26 January 2026, an EU Council regulation adopted by qualified majority began phasing out Russian pipeline gas and LNG imports: the ban on pipeline gas is set to take effect by autumn 2027 at the latest. Twenty-four member states voted in favour; Hungary and Slovakia voted against, and Bulgaria abstained. Russian crude is on a separate legislative track — seaborne imports have been under embargo since December 2022 — with the EU aiming to eliminate all imports of Russian fossil fuels by end-2027.
2. The three channels
Despite the collapse in direct imports, Russian oil continues to arrive in Europe through three channels. None of them is illegal in itself, but each sidesteps the spirit of the sanctions.
2.1 The shadow fleet
Once the sanctions took effect, Russia assembled a fleet of ageing tankers under opaque ownership to move oil outside EU and G7 insurance and shipping cover. According to S&P Global data from early 2025, the fleet numbered 940 vessels — a 45% increase in a single year. The vessels averaged 20 years of age, against a global average of 13. (S&P Global)
In 2024, the shadow fleet carried more than 60% of Russian seaborne oil exports, including 78% of crude oil exports. According to joint estimates by the KSE Institute and CREA, the fleet moves oil worth €60–80 billion a year. The largest operators of shadow tankers are based in the United Arab Emirates, India and China.
What is the shadow fleet?
The shadow fleet is the collective term for old tankers, often close to decommissioning, used to circumvent the sanctions on Russia. These vessels are not insured by Western underwriters; they sail under flags of convenience — frequently Panama, Barbados or Sierra Leone — behind opaque ownership structures. Because they operate outside EU and G7 services, the price cap does not apply to them, allowing Russian oil to be shipped at market prices — up to $30–50 a barrel above the cap. The environmental risk is high: accidents involving vessels averaging 20 years of age could cause serious ecological damage.
2.2 The Indian–Chinese "laundry"
The second channel is refining arbitrage. India and China buy cheap Russian Urals crude, refine it, and export the finished products — diesel, petrol, jet fuel — to Europe. Once refined, the oil "technically" ceases to be Russian at the border.
India's case is illustrative. In 2021, India imported 1.84 million tonnes of Russian crude oil. By 2023, that had jumped to 70 million tonnes — an almost 38-fold increase. In fiscal 2024, India imported 231 million barrels of Urals crude in the first half alone.
Exports of refined products to Europe rose 132% between 2021 and 2023: India's oil-product exports to the EU climbed from 11.84 million tonnes to 27.48 million tonnes, and still stood at 26.20 million tonnes in 2024. Much of the Indian diesel arriving at the Dutch port of Rotterdam was made from Russian crude.
| Indicator | 2021 | 2023 | 2024 |
|---|---|---|---|
| Imports of Russian crude oil (Mt) | 1.84 | 70 | ~85 |
| Refined products exported to the EU (Mt) | 11.84 | 27.48 | 26.20 |
| Urals share of Reliance imports (%) | ~10 | ~30 | ~40 |
| Value of exports to the EU (billion USD) | 8.7 | 19.2 | ~15 |
Source: Indian Ministry of Commerce, Kpler, ICRA, SPF Japan
The picture is similar for China. In 2024, China imported 108.5 million tonnes of Russian crude oil, via the ESPO pipeline and by sea alike. China's independent ("teapot") refiners favour Russian and Iranian oil.
2.3 The Druzhba pipeline: the last direct channel
The third channel is the southern branch of the Druzhba ("Friendship") pipeline, which supplies Hungary and Slovakia with Russian crude oil. EU sanctions apply to seaborne imports, but pipeline imports to landlocked countries are exempt. That exemption has kept the pipeline running.
The situation, however, is complicated. On 27 January 2026, a Russian drone strike damaged the pumping station near Brody, and deliveries were suspended for more than three months, resuming only partially on 21 April 2026. During that period, Hungary and Slovakia were forced to rely on the JANAF Adriatic pipeline through Croatia. The switch was not seamless: according to MOL, Hungary's oil & gas group, the Croatian transit fee was five times the European average, and the pipeline's actual capacity was also in dispute. The parties eventually signed a joint capacity-testing agreement on 25 February 2026.
What is the Druzhba pipeline?
The Druzhba (Russian for "Friendship") is one of the world's longest oil pipeline systems, stretching 5,500 kilometres in total. Built in 1964, it starts in Tatarstan, Russia, and reaches Central Europe via Belarus and Ukraine. It has two main branches: the northern (to Poland and Germany) and the southern (to Hungary and Slovakia). The southern branch feeds the refineries at Százhalombatta in Hungary and Bratislava in Slovakia with Russian Urals crude. Its strength is cheap, reliable overland delivery; its weakness is that the oil arrives from a single source along a single route — a geopolitical risk, as the three-month shutdown from January 2026 demonstrated.
3. Who replaced Russian oil?
Several producers filled the gap left by Russia. The EU's main new suppliers in 2025:
US imports rose 71% between 2021 and 2025, making the United States the EU's largest oil supplier, ahead of both Russia and the traditional European producers. This geopolitical reality — the reorientation of Europe's energy dependence towards the Atlantic — has profoundly reshaped EU energy security.
4. What did it all cost?
The sanctions policy has imposed several costs on the EU.
Higher purchase prices: Non-Russian grades such as Brent and WTI generally trade above Urals. In 2022–2023, Brent averaged $80–90 a barrel, while Urals traded in a $45–70 range once the sanctions were in place. The difference — the "sanctions premium" — raised costs for EU refiners. (EIA)
Higher shipping costs: Moving oil by sea from the United States and the Middle East takes longer and costs more than piping Russian crude through Druzhba. Maritime freight costs doubled in 2022–2023 on sanctions and a shortage of vessels.
Refinery conversion costs: European refineries had been configured to process Urals crude for decades. Switching to other grades required investment. MOL's Hungarian refineries, for instance, budgeted $700 million for processing non-Russian oil.
Losses on the Russian side: For Russia, the largest loss was the fall in oil export revenue. According to the Brookings Institution, EU imports of Russian oil fell from 3.5 million barrels a day in 2021 to 0.4 million barrels a day in 2024. (Brookings)
What is the price cap?
The price cap is a mechanism introduced by the G7 and the EU in December 2022 that permits the shipment of Russian oil, but only at prices below $60 a barrel. The mechanism works because much of the world's maritime oil insurance and shipping is in the hands of G7 and EU companies: if the oil is priced above the cap, those companies may not provide their services. The cap is designed to allow Russia to continue exporting — thereby avoiding a global price shock — but at reduced revenue. From September 2025, the EU lowered the cap to $47.60 a barrel and introduced an automatic adjustment mechanism.
5. The 18th sanctions package: closing the "refining loophole"
The EU's 18th sanctions package, in force since 21 January 2026, bans not only direct imports of Russian oil but also third-country refined products made from Russian crude.
The measure is aimed squarely at India and Turkey. In 2025, according to data from the maritime AI platform Windward, Indian, Chinese and Turkish refiners exported 100 million barrels of diesel, petrol and jet fuel to the EU. India accounted for 61.2 million barrels of that — 61% — making it the largest supplier. Under the new rules, importers must prove that a product was not made from Russian crude oil; a so-called "60-day cleansing period" precedes authorisation.
India's response was twofold. Reliance Industries — owner of the world's largest refinery — stopped using Russian oil in production destined for export, diverting it to its domestic-market operations. Nayara Energy, part-owned by Rosneft, continued importing Russian crude.
"The 18th sanctions package effectively closes the loophole through which Russian oil molecules worth billions of euros reached Europe."
— KSE Institute (Kyiv School of Economics), January 2026 report
6. Counter-arguments and blind spots
So far, this article has followed the narrative that EU sanctions policy has successfully cut dependence on Russian oil. That picture deserves to be questioned from several angles.
The trajectory of Russian oil prices is not clear-cut. Although Urals trades below Brent, Russia's total oil export revenue reached $124 billion in 2024 — above the $111 billion recorded in 2021. Higher volumes, bought up by China and India, partly offset the decline in prices. According to the Oxford Energy Institute, the "extraordinary" oil revenues have declined, but the underlying export machine keeps running. (Oxford Energy)
The shadow fleet is not going away. The 940-vessel fleet continues to operate, and new vessels keep arriving. The KSE Institute puts its annual turnover at more than €60–80 billion. The sanctions' effectiveness is therefore limited: the oil still reaches its buyers, albeit by more opaque routes.
The refining loophole has not fully closed. The EU's 18th sanctions package covers only refined products. For petrochemical feedstocks, lubricants and other oil derivatives, origin remains hard to trace. The KSE Institute has warned that enforcement is often patchy at member-state level.
The EU is paying for the decoupling through higher energy prices. Industrial electricity prices in the EU averaged $110/MWh in 2024, against $45/MWh in the United States. That competitive disadvantage could drive energy-intensive industries — chemicals, steel, aluminium — to relocate, weakening the European economy over the long term.
7. What to watch
Over the coming months, the following indicators are worth watching:
- The Urals–Brent spread (EIA monthly data): if the gap falls below $30, demand for Russian oil is strengthening
- The shadow fleet's vessel count (S&P Global and Kpler quarterly reports): growth in the fleet signals that Russia is circumventing the sanctions successfully
- India's refined-product exports to the EU (Indian Ministry of Commerce monthly data): a gauge of the 18th sanctions package's impact
- MOL's refinery conversion (MOL quarterly reports): the extent and cost of processing non-Russian oil
- Druzhba delivery volumes (FGSZ and MOL data): the pipeline's reliability after the April 2026 restart
In the next instalment: China and India — the new buyers. How much are they purchasing, at what price, and is the model sustainable over the long run?