Central and Eastern Europe appear significantly better prepared to withstand energy supply disruptions triggered by the ongoing conflict involving Iran, according to a recent assessment by S&P Global. The credit ratings agency observed that structural reforms undertaken after Russia launched its invasion of Ukraine in 2022 have substantially improved the region’s resilience to external energy shocks.
Financial markets across the region initially reacted sharply to the escalation of hostilities involving the United States and Israel against Iran. Rising geopolitical risk drove up global energy prices, placed pressure on Central European currencies, and pushed government bond yields higher. However, markets staged a modest recovery after signs emerged that diplomatic channels might reduce the intensity of the confrontation.
Energy analysts note that the crisis exposed how significantly the region has transformed its supply structure over the past several years. Prior to the Ukraine war, many Central and Eastern European states relied heavily on Russian gas and oil imports. According to Ravi Bhati, Director for Sovereign Ratings in Europe, the Middle East and Africa at S&P Global, governments across the region were compelled to rapidly identify alternative supply routes once Russian deliveries became uncertain.
The response involved accelerating renewable energy development, expanding access to global liquefied natural gas markets, and strengthening cross border energy infrastructure. These measures have gradually reduced the region’s vulnerability to supply disruptions and price volatility.
Poland has emerged as one of the most prominent examples of successful diversification. The country commissioned its first liquefied natural gas terminal in 2015 and has since developed extensive pipeline connections with neighbouring states to reduce dependence on Russian supplies. Its strategic position on the Baltic coast has also enabled Poland to import crude oil through the Gdansk terminal while supplying two refineries in Germany.
Warsaw is simultaneously investing in long term energy security projects, including the development of approximately six gigawatts of offshore wind capacity in the Baltic Sea and the construction of a new coastal nuclear power facility.
The Czech Republic has also reduced its exposure to Russian energy by securing gas imports from Norway and liquefied natural gas delivered through terminals in the Netherlands. In 2025, the country completed upgrades to the TAL pipeline system, allowing it to fully meet its annual oil demand without relying on Russian supplies.
Nevertheless, not all economies in the region have achieved the same degree of independence. Hungary remains heavily dependent on Russia, obtaining roughly seventy five percent of its gas and nearly all of its oil from Russian sources. As a result, Hungary’s financial markets have been among the most sensitive to recent geopolitical turbulence.