Budapest — Central and Eastern Europe has become more resilient to energy supply shocks following efforts to diversify sources since Russia’s invasion of Ukraine in 2022, providing buffers against the economic impact of the war in the Middle East, S&P Global said on Tuesday.
The import-reliant region’s financial markets were shaken by the U.S.-Israeli war on Iran, which drove up energy prices, central European currencies and bond yields before Tuesday’s relief rally on hopes of de-escalation.
“Central and Eastern Europe got hit very hard by the start of the Ukraine war, at which point they were very heavily reliant on energy and gas imports from Russia,” Ravi Bhati, S&P’s director for sovereign ratings in EMEA, told an online forum.
“And very quickly … they had to scramble and look for alternative sources. So in that sense, they’ve really become much more resilient to supply-side shocks,” he said, citing a renewable energy drive and access to global liquefied natural gas supplies.
POLAND LEADS DIVERSIFICATION
Poland, the region’s largest economy, launched its first LNG terminal in 2015 and has more lately built several pipeline links with neighbours to wean itself off Russian supplies.
Thanks to its location on the Baltic, Poland is also independent of Russian oil and even supplies two German refineries via Gdansk oil import terminal.
Warsaw is building some 6 gigawatts of offshore wind on the Baltic and a nuclear plant at the seashore.
Meanwhile, the Czech Republic has turned to gas from Norway and LNG, received mainly through a Dutch terminal. In 2025, it also ended its reliance on Russian oil supplies when it completed upgrades along the TAL pipeline in the west allowing it enough capacity along that route to fully meet its annual needs.
Hungary, however, still gets 75% of its gas and nearly all of its oil needs from Russia. Its currency and bond markets were among the hardest-hit in Central Europe in the past days due to its strong reliance on cheap energy and high import needs.
