Ukraine’s Naftogaz has signed a memorandum with Hungarian energy company MOL to build fuel storage facilities in Hungary near the Ukrainian border, creating additional reserves outside the reach of Russian strikes.

Acting Naftogaz CEO Sergiy Fedorenko said the project will diversify fuel supply routes and provide storage capacity outside areas exposed to Russian attacks. He said this could make fuel supplies more reliable for Ukrainian consumers while also expanding cross-border energy infrastructure.

The agreement was announced during the Carpathian Economic Forum, held as part of the first summit of the Carpathian Eight regional cooperation format.

Why Ukraine needs fuel storage outside the country

Russia has repeatedly targeted Ukraine’s fuel infrastructure, including oil and gas production facilities, filling stations, and other sites needed to supply fuel across the country. These attacks increase in the lead up to and during winter months, where the impacts on civilians are especially severe.

Naftogaz said Russian attacks destroyed 37 of its filling stations during the first seven months of 2026. The company said fuel availability is particularly important for emergency services, medical teams, public transport, and communities near the front line.

Russia has also attacked Ukraine’s oil and gas production facilities. In August, Naftogaz said a major Russian attack damaged seven Ukrnafta production facilities and forced some of them offline, reducing oil and gas production.

Storing fuel in Hungary would give Ukraine additional reserves beyond the reach of these attacks and another route for bringing petroleum products into the country if domestic infrastructure is damaged.

Fedorenko said the agreement could make fuel supplies to Ukrainian consumers more reliable while supporting the development of energy infrastructure connecting the two countries.

Ukraine-Hungary ties improve

The deal comes as Kyiv and Budapest have begun rebuilding relations following years of tensions under former Hungarian Prime Minister Viktor Orbán.

Péter Magyar replaced Orbán as Hungary’s prime minister in 2026, and the new government has moved toward closer cooperation with Ukraine, although major disagreements remain. 

In June, Ukrainian Foreign Minister Andrii Sybiha described the relationship as entering a “new page” after Kyiv and Budapest reached an agreement addressing longstanding disputes over the rights of Hungary’s ethnic minority in Ukraine. 

The two countries have since continued talks on normalizing relations. In September, the relationship was showing tentative signs of improvement, including progress on minority-rights issues and preparations for a meeting between Ukrainian President Volodymyr Zelenskyy and Magyar.

Energy cooperation has already featured in the renewed dialogue. During a Ukrainian government visit to Budapest in 2025, the two sides discussed Hungarian participation in modernizing Ukraine’s energy infrastructure and agreed to continue economic cooperation.

The improvement in relations has not eliminated disagreements. Hungary continues to block progress on parts of Ukraine’s EU accession process, citing concerns over the rights of Hungary’s ethnic minority in Ukraine.

The planned fuel-storage facilities therefore mark a practical area of cooperation between the two countries at a time when Russia’s attacks are making secure fuel supplies increasingly important for Ukraine.

Russia has destroyed 2.1 million square meters of Ukraine’s modern warehouse space out of a total 5 million, wiping out more than two-fifths of the country’s storage capacity as Moscow expands its air campaign against Ukraine’s economy, according to the Financial Times.

Russia is increasingly targeting the infrastructure that keeps Ukraine’s economy running and its citizens supplied, including warehouses, distribution centers, railways, fuel stations, and other logistics facilities. By hitting these sites far from the front line, Russia is disrupting the supply of everyday goods and making it harder for Ukrainians to find what they need.

Around 900,000 square meters of warehouse space has been destroyed in recent months alone, according to Ukrainian entrepreneur Ruslan Shostak, founder of the Eva and Varus retail chains, cited by the Financial Times.

Russia is destroying Ukraine’s warehouse capacity

The loss of warehouse space is creating problems for businesses across Ukraine.

Russian strikes have hit warehouses and distribution centers belonging to major Ukrainian retailers, pharmaceutical companies, publishers, and logistics operators.

One recent strike destroyed a warehouse belonging to toy retailer Budynok Ihrashok near Kyiv, FT reported. The facility was hit by a jet-powered drone and caught fire, but firefighters were unable to intervene while Russian drone attacks were continuing.

The company now plans to distribute its inventory among smaller warehouses and its network of 67 stores rather than rely on a single large distribution center.

The destruction of large warehouses is forcing companies to rethink how they store and distribute goods, increasing costs and making supply chains more vulnerable to further attacks.

The attacks are spreading across Ukraine’s economy

Warehouses are not the only economic infrastructure being targeted.

Russian drones have increasingly struck railway infrastructure in western Ukraine, while fuel stations are also being hit farther from the front line. These attacks can disrupt the movement of goods even when they do not directly destroy the businesses producing them.

The result is a widening pressure on Ukraine’s logistics network. Companies must find alternative storage and transport routes while operating under the continuing threat of Russian airstrikes.

The attacks are part of Russia’s broader long-range air campaign against Ukraine’s civilian infrastructure. Moscow is increasingly using drones and missiles to hit economic targets deep inside Ukraine, putting strain on the systems that allow the country’s economy to function during the war.