Goran Bare put it well: “And now I know that no one can do it on their own” – a line that captures Europe’s energy predicament better than any policy white paper, definitely better than “the cheapest energy is the one you don’t consume”. The Strait of Hormuz crisis marks the second major energy shock in four years, and for the CEE region, still mid-transition away from Russian hydrocarbons, the consequences are amplified. Pipeline dependency, landlocked geography, and thinner fiscal buffers make each disruption cut deeper. But unlike 2022, when governments scrambled for alternatives, the infrastructure and deal-making of the past three years is producing tangible results. Most CEE countries will still depend on energy imports, just from different partners, but a few are actively challenging the unfavorable position they find themselves in.
What the IEA called the largest supply disruption in the history of the global oil market once again exposed Europe’s structural vulnerability, and gas markets took an even harder hit. This was despite a dramatic supply pivot as Russian gas fell from 45% of EU imports in 2021 to roughly 12-13% in 2025, while Russian crude dropped from 27% to barely 2%, with only Hungary and Slovakia still importing Russian oil under sanctions exemptions (not for long, as it seems). The replacements are clear – Norway now supplies over half of EU pipeline gas, and US LNG has grown from 27% to 56% of all EU LNG imports.
EU imports of natural gas (left) and LNG (right) from main partners (% of total imports)
Source: Eurostat, InterCapital Research
In this context, Croatia stands out as one of the clearest beneficiaries. The Krk LNG terminal more than doubled its regasification capacity from 2.6 bcm/year to 6.1 bcm/year, with over two-thirds of LNG imports originating from the United States and virtually none from the Gulf – a detail that proved fortuitous when Iranian strikes damaged Qatar’s Ras Laffan LNG complex last month. Therefore, Krk now functions as a distribution node for American gas into CEE, with potential to reach as far as southern Germany.
Croatia’s oil infrastructure has become equally pivotal. When a drone strike destroyed a section of the Druzhba pipeline in Ukraine, cutting 150,000 barrels per day flowing to Hungary and Slovakia, the JANAF Adria pipeline – running from Omišalj terminal through Croatia to Hungary, Slovakia, Bosnia, and Serbia – became the sole viable alternative for landlocked CEE refineries. But the corridor is contested territory. MOL and its Slovak subsidiary Slovnaft have accused JANAF of charging three to four times the fair market rate for crude transportation and have demanded that JANAF permits seaborne Russian crude through the system, a request JANAF has resisted on sanctions-compliance grounds. Meanwhile, MOL’s influence over Croatia’s downstream sector through its controlling stake in INA gives the Hungarian company an advantageous position along the very infrastructure it is disputing. The concern sharpens further with MOL’s ongoing acquisition of Serbia’s NIS, which would give it control of refineries across the entire JANAF route from the Adriatic to the Danube.
MOL Group’s refining capacity by facility including NIS (mt/year)
Source: MOL Group, InterCapital Research
Beyond the NIS deal where MOL has signed a binding agreement to acquire Gazprom Neft’s 56.15% stake for up to EUR 1bn, adding roughly 400 retail stations and a fourth major refinery in Pančevo with 4.8 mt/year capacity, the Group has invested EUR 700 million in the Rijeka refinery upgrade through INA. It is INA’s largest-ever single investment, increasing refining capacity toward 4 mt/year.
On the other hand, the Hungarian political context deserves a fresh perspective. Péter Magyar’s landslide victory on April 12th ended Viktor Orbán’s 16-year hold on power, while Orbán personally lobbied both Washington and Moscow on the NIS deal and secured a one-year Trump administration exemption from US sanctions on Russian energy. Magyar has articulated a slightly different trajectory in his campaign – a 2035 target for phasing out Russian energy dependence and more crucially, as Bloomberg reported, the incoming Tisza government is expected to reassess MOL’s leadership. However, Magyar’s campaign ran primarily on “not being Orbán”, and any shifts in energy policy are more likely to be gradual rather than radical. His post-election statement that diversification does not mean abandoning cheap Russian oil captures the pragmatism well – a balance between affordable energy and pro-EU alignment that investors should expect to define the transition period.
Gas import dependency across CEE countries (%, 2024)
Source: Eurostat, National statistical offices, InterCapital Research
On the eastern flank of the CEE region, Romania is making the decisive upstream play. Neptun Deep, a deepwater gas project 160 km offshore in the Black Sea, holds approximately 100 bn cubic meters of recoverable reserves and is targeting peak production of 8 bcm/year, enough to nearly double Romania’s current output. The project is a 50/50 joint venture between OMV Petrom and Romgaz, budgeted at up to EUR 4 billion, making it Europe’s largest upstream development. The 160 km offshore pipeline to shore at Tuzla is under fabrication, while the critical 308 km Tuzla-Podișor onshore pipeline connecting Neptun Deep to the BRUA corridor is already commissioned and operational. First gas is targeted for 2027.
At 8 bcm/year plateau production, Neptun Deep transforms Romania from a roughly balanced gas market into a net exporter of 3-4 bcm annually, and makes it the EU’s largest gas producer. The geopolitical implications are significant. Post-Neptun Deep Romanian gas provides a direct alternative to TurkStream volumes for Moldova, Bulgaria, Serbia, and Hungary – all gas-deficit markets already connected to Romania via existing or expanding pipeline infrastructure. The BRUA pipeline system and planned expansions provide the physical corridor for Romanian gas to reach Central Europe, helping fill the void left by sanctioned Russian hydrocarbons.
The capital allocation signals across the region are unambiguous: CEE is building the infrastructure to produce more of its own gas, refine non-Russian crude through diversified routes, and secure its sovereignty, all while trying to stay within the budget. The enduring risk is that this transition is happening during, not after, a period of extraordinary geopolitical volatility – an active war in the Black Sea, Hormuz’s uncertain reopening, a political transition in Budapest, and an EU sanctions regime still being tightened. Earlier this year, we traveled to Budapest for a reverse roadshow with one of our dear clients, and he put it perfectly: “ESG no longer stands for Environmental, Social and Governance – it stands for Energy, Security, and Geopolitics.”.