The Druzhba–Adria cost equation

The suspension of Druzhba supplies has reignited debate over whether Hungary and Slovakia could — or should — fully switch to the Adria pipeline. A closer look at transit fees, benchmark spreads and shipping costs suggest that while diversification via Adria may technically feasible, discounted Urals crude delivered through Druzhba still enjoys a substantial cost advantage under current market conditions.

Since January 27, crude oil deliveries through the southern branch of the Druzhba (Friendship) pipeline have been suspended, once again raising concerns about supply security in Central Europe. In response, Hungary and Slovakia formally approached Croatia, requesting that the missing volumes be replaced via the Adria pipeline system operated by JANAF.

The situation has revived a broader policy debate about dependency and pricing. A recent study by the Centre for the Study of Democracy (CSD) argues that Hungary remains heavily dependent on Russian crude but that diversification via the Adria pipeline is both technically feasible and economically viable. The report maintains that claims about excessive transit costs are overstated. While it acknowledges that pricing structures and market incentives currently favour Russian imports — particularly due to the Urals discount — it contends that switching to non-Russian crude remains economically manageable and politically necessary.

Pricing, Transparency and Dispute

The CSD study appears to infer JANAF’s transit tariff from Eurostat trade data. In other words, the reported per-ton transit cost is not based on published tariff schedules but is statistically derived from trade value and volume data.

JANAF’s annual reports do publish total annual transport revenue and total transported volume. Dividing these allows for an estimation of an implied average transit fee. However, this estimated revenue-per-ton figure is not identical to the actual contractual tariff applied to individual clients such as MOL.

Using annual reports and transported volumes, an estimated EUR/ton trajectory can be reconstructed.

Two notable peaks appear in the data. The first occurred in 2015, when revenue per ton rose significantly. This likely reflected lower throughput volumes, contract restructuring, and possibly renegotiated long-term agreements. After a relatively stable period between 2016 and 2022, when implied transit fees remained in the EUR 7–8 per ton range, a clear increase emerged in 2023–2024. This rise may be explained by several factors including stronger bargaining position for JANAF following the geopolitical shift, inflation and energy cost pass-through, reduced throughput leading to higher per-ton revenue and structural changes in supply flows.

The reconstructed 2024 estimate of approximately EUR 11.9 per ton aligns closely with the EUR 12.22 per ton cited in the CSD study. This confirms that transit fees did increase. However, the pattern also demonstrates historical volatility.

Importantly, the magnitude of the recent increase appears much larger (+40%) than the moderate tariff adjustments (roughly 10–15%) observed among several other Mediterranean oil pipeline operators like TAL (Transalpine Pipeline), the French SPSE (South European Pipeline) or BTC (Baku–Tbilisi–Ceyhan) during the same period. In a formal letter to the Directorate-General for Competition (EU) in late 2025, MOL and Slovnaft argued that JANAF’s fees were "several times higher" than the industry standard.

The CSD study itself acknowledges the political sensitivity of these pricing disputes and recommends that the European Commission initiate an independent audit of JANAF’s transit fees and establish a clear EU-level framework for resolving such disputes in order to enhance transparency and reduce regional tensions.

Public information on Druzhba tariffs is limited. What is publicly known is that in 2023 Ukraine increased its transit fee significantly for the Ukrainian section of Druzhba from approximately €13.6 to €21 per ton — the same figure cited in the CSD study.

Transit is only one component of delivered cost

Focusing solely on pipeline tariffs risks distorting the broader economic picture.

As the CSD study acknowledges, profitability depends on multiple cost elements, including the benchmark crude oil price (Brent vs. Urals), maritime freight costs (for seaborne oil) and terminal handling and storage. The Adria route necessarily involves tanker transport to Omišalj, port handling, and inland pumping. Druzhba, by contrast, is a continuous inland pipeline system with no maritime component.

Both Brent and Urals prices have followed a declining trend from early 2023 to early 2026. The spread widened sharply after 2022–2023, narrowed somewhat in 2025–2026, but remains significant today. While media reports cited discounts near 23%  just last November, the current market differential is closer to 16–18%. In concrete terms, this translates to approximately around $68–70 per barrel for Brent and around $56 per barrel for Urals.

Therefore, even assuming the higher €21 per ton Ukrainian transit fee, the delivered cost of Urals via Druzhba still maintains an estimated $10–12 per barrel advantage over Brent via Adria. And this was calculated without adding maritime freight to the Adria route. This cost item can be equal to or even greater than the JANAF pipeline fee itself. Maritime freight is highly volatile and can add several dollars per barrel, further widening the effective cost difference.

In other words, the full premium of the Adria route often arises not from the pipeline tariff alone, but from the combined effect of maritime shipping and pipeline transit.

Taking all elements together, Urals delivered via Druzhba — even accounting for the elevated Ukrainian transit fee — may remain approximately $12–15 per barrel cheaper than Brent delivered via Adria under current market conditions.

That is a substantial difference. If the Urals discount widens again toward the previously observed 23% range, the economic advantage would increase further.

The decisive factor, therefore, is not transit pricing alone but the structural discount on Russian crude. Transit fee increases narrow the gap, but they do not eliminate it.

However, the margin generated by the Urals discount is not necessarily passed through to consumers.

Based on European Commission Weekly Oil Bulletin data (February 2026), consumer petrol prices excluding taxes amount to approximately €0.60 per litre in Czechia, €0.65 per litre in Slovakia, and €0.74 per litre in Hungary — a relatively narrow range that suggests access to discounted Russian crude has not translated into markedly lower untaxed pump prices compared to regional peers. This pattern is consistent with the assumption that much of the upstream price advantage generated by the Urals discount is retained within refining and distribution margins rather than being fully passed through to consumers.

The current suspension of Druzhba flows highlights structural vulnerabilities in Central Europe’s supply system. The Adria pipeline offers a technically viable alternative. But the economic comparison shows that the strategic debate extends far beyond a single tariff number. It ultimately concerns whether diversification and energy security objectives justify paying a persistent structural premium over discounted Russian crude — a question that remains as political as it is economic.