Why one Eastern European country was slow to kick its Russian oil habit?

Czechia has the infrastructure, reserves, and access to alternative suppliers to eliminate its Russian oil imports. Yet, three years into Russia’s full-scale invasion of Ukraine, the Czech Republic continued to delay this strategic shift, despite the availability of viable alternatives.

In 2024, Czechia imported 2.7 million tonnes of Russian crude oil, worth an estimated 1.5 billion euros ($1.6 billion), according to a recent analysis by the Center for the Study of Democracy. Although this is a 30 percent decrease in volume compared to 2023, the cut was not due to a proactive policy to phase out Russian crude but largely the result of three major disruptions to the Druzhba pipeline.

The completion of the Trans-Alpine (TAL) pipeline expansion at the end of 2024 should have enabled Czechia to fully replace Russian crude. However, as of February, the state-owned pipeline operator MERO ČR and the dominant refiner Orlen Unipetrol had yet to fully utilize this new resource. As a result, more than 100 million euros continued to flow to the Kremlin each month.

This delay is not due to technical constraints. Even prior to the final certification of the TAL-plus project, MERO ČR confirmed that spare capacity in the pipeline was sufficient to meet Czechia’s total annual crude demand.

Additionally, the country’s strategic reserves of 3.6 million tonnes could cover nearly half of its annual consumption. Nevertheless, Russian oil imports surged by 30 percent year-on-year in the final quarter of 2024, reaching 970,000 tonnes, the highest quarterly volume since the European Union's oil embargo took effect in 2022. The trend continued in 2025, with Czechia purchasing an additional 220,000 tonnes of Russian crude.

Orlen Unipetrol says that long-term contractual obligations with Rosneft, expiring in mid-2025, prevented an immediate exit from Russian supply. However, it is not clear that this is necessarily the case. For one, take-or-pay clauses – often cited as justification – are rare in global oil trade, where supply flexibility is the norm.

Orlen’s reluctance appears to have been primarily driven by financial concerns, as Russian crude was around 20 percent cheaper than Azeri crude on average in 2023 and 2024. Yet retail fuel prices remained stable during this time, with gasoline and diesel averaging between 1,500 and 1,360 euros per tonne, respectively. Orlen Unipetrol was therefore able to capitalize on the cost differential, reporting EBITDA exceeding 600 million euros annually during the peak years of Russian crude reliance.

Looking forward, the discount on Russian crude may widen further, as the widespread tariffs recently imposed by the US administration could dampen global oil demand, forcing Russia to slash prices.

REPERCUSSIONS

This passive approach has had significant geopolitical repercussions. Since the onset of the war, Czechia’s crude oil imports have contributed nearly 3 billion euros in tax revenues to the Russian state. In total, Czechia has spent 8.4 billion euros on Russian oil and gas since February 2022, more than six times the 1.32 billion euros it has provided in aid to Ukraine.

Additionally, Czechia continues to import refined oil products from Slovakia and Hungary, where refineries process Russian crude under an extended EU exemption until June 2025. In 2024, Slovakia exported 710,000 tonnes of fuel to Czechia, worth 520 million euros, despite the availability of alternatives. Germany, for instance, offers gasoline and diesel at only a 6–7 percent premium compared to Slovak suppliers.

Czechia’s natural gas imports also show a similar pattern. In anticipation of Ukraine’s termination of Russian gas transit in January 2025, Czechia increased its Russian gas purchases by nearly 400 percent in 2024. In the final quarter of 2024 alone, monthly imports surged to 0.34 billion cubic meters, 62 percent higher than the average for the rest of the year.

In short, the Czech government has the power to unilaterally ban Russian crude oil imports, halt purchases of fuels refined from Russian oil in Slovakia and Hungary, and make full use of the TAL pipeline and domestic reserves.

Bulgaria has already shown a complete Russian oil phase-out is possible. Sofia terminated its own exemption in early 2024, invoking a force majeure clause and cutting off Russian crude overnight. This led to neither oil supply security risks nor to an increase in domestic fuel prices despite the fact that Bulgaria relied on Russian oil for around 90 percent of its crude imports in 2023.

Czech government officials on Apr 17 said that the country has become fully independent of Russian oil supplies following completion of capacity upgrades on the TAL pipeline.

It appears that Czechia can align its actions with European energy security imperatives without severe economic repercussions, so if the current halt in Russian oil imports does not hold, it may struggle to justify why it is not doing so.