Berlin and Budapest are moving in opposite directions. Germany’s AfD (Alternative für Deutschland) riding high on a recent election victory is in talks with the Kremlin on turning Russian gas supplies back on, while Budapest, previously one of Russia’s few allies in Europe, says it will cut off supplies completely next year.

The AfD has opened talks with Kirill Dmitriev, the head of Russia’s sovereign wealth fund and Russian President Vladimir Putin’s go-top man on international business on restoring Russian gas supplies to Europe’s largest economy next year and potentially reopening the Nord Stream pipelines, Reuters sources report.

The proposed meeting between Dmitriev, who has also been acting as the Kremlin’s special envoy in Ukraine ceasefire negotiations, and AfD co-leaders Alice Weidel and Tino Chrupalla could take place as early as March 2027, according to Reuters. Israel, the United Arab Emirates and India are being considered as venues. The organisers say a meeting would only take place after a peace framework had been agreed between Russia and Ukraine.

Organisers have also discussed bringing the other US special envoys into the talks, Steve Witkoff and Jared Kushner. However, a senior US official told Reuters that neither had been informed or invited to the proposed meeting yet.

The proposal is likely to cause a storm in Brussels, which has been revving up to ban imports of Russian gas completely by January and more recently has also suggested a ban on Russian LNG too, on which the EU has been heavily dependent this year as it races to fill gas storage tanks which are at record low levels ahead of the start of the heating season, now only two months away. However, with gas prices double what they were pre-war, a permanent change, the Germany economic model has been broken, and the country is slowly deindustrialising.

Russia accounted for 52% of Germany’s gas imports in 2021, according to Germany’s Federal Network Agency. Nord Stream 1 deliveries progressively collapsed during 2022, reaching zero by the beginning of September that year after an explosion destroyed three of the four strands of the twin pipelines Nord Stream 1 & 2. The surviving strand was sealed by Danish authorities last year and can be turned on within a day, Putin reminded partners in recent remarks. That strand could carry around 25bcm of gas and is already full of the technical gas that would allow it to be immediately restarted.

The AfD has increasingly made restoring access to Russian energy part of its economic platform, which contributed to its landslide victory in the recent Saxon-Anhalt regional elections in eastern Germany. Weidel told Reuters in June that Germany should end its boycott of Russian oil and gas, and has described “cheap energy from Russia” as “the secret of the success of ‘Made in Germany’.”

For his part, German Chancellor Friedrich Merz has vowed “not to give one inch” in his support for Ukraine and resistance to Russian pressure. However, with his popularity having fallen to 14% in the last poll and facing another crushing defeat in two more regional elections in Mecklenburg-Western Pomerania and Berlin this weekend, it is possible that Merz’s CDU will not manage to clear the 5% of the vote threshold that could trigger the collapse of his coalition, or see the Chancellor ousted.

The Nord Stream pipeline issue is especially poignant as it makes landfall in Mecklenburg-Western Pomerania. Recent polling cited by Reuters puts the AfD well in the lead in those elections with 37%, compared with 35% for the governing Social Democrats, but the CDU is polling in single digits in the region.

Most of the German establishment is opposed to restarting Russian gas imports and even if the AfD wins control of another region, they have no voice in the Bundesrat and no power to actually close a deal with Gazprom that operates the pipeline. The announcement of the talks remains little more than an electoral strategy not a business deal.

“Germany cannot become dependent on Russia again,” said Michael Kellner, a Green MP who was responsible for German energy policy during the crisis following the interruption of Russian gas supplies.

“We cannot repeat the mistakes of the energy crisis,” he said. “It cost us €50bn. We cannot want to go back to that. It would be treason. Putin is using the AfD to his own ends.”

However, Roderich Kiesewetter, an MP from Merz’s Christian Democrats, told Reuters that the talks could strengthen voices within his own party that favour a return to Russian gas.

“The AfD is on Russia’s side, willing to betray both Ukraine and Germany. Russia uses energy, especially Nord Stream, as a hybrid weapon for military purposes. Reopening Nord Stream would be a disaster for European security and isolate Germany.”

The politics of restarting Russian gas imports stink. The economics of turning the pipelines back on make perfect sense. EU gas storage was only 68.84% full on September 17, according to Gas Infrastructure Europe, while Germany’s stocks were considerably lower at 56.02% - about 20pp lower than they were a year ago at this point in the year. Under EU rules, the tanks are supposed to be 90% full on November 1, and the chances of that happening are now zero. Germany tanks will be only 67% full by the deadline, according to IntelliNews Lambda calculations and the price of gas has already tripled since the start of the restocking season in May to €80/MWh and is likely to go higher say market participants.

The European Commission (EC) remains committed to cutting off gas imports completely, despite the gas shortage and soaring prices. New regulations were adopted in January banning new short-term contracts that went into effect in April. Imports under long-term Russian LNG contracts are due to stop from January 2027 and long-term pipeline imports from September 30, 2027, although the pipeline deadline can be postponed until November 1 if storage targets are not met.

Hungary bails on Russian gas supplies

In a remarkable parallel development, Hungarian Prime Minister Peter Magyar announced on the same day that Hungary will end its imports of Russian gas completely, backtracking from earlier comments after his election that Hungary would continue to buy Russian methane for now and reversing the policies of his predecessor Hungarian Prime Minister Viktor Orban.

Orban rebelled against European sentiment and maintained good relations with the Kremlin throughout his career and was amongst the most resistant to severing energy links with Moscow. Now Magyar is allying with Brussels and says he wants to shut down the pipelines arriving in Hungary as soon as the same autumn 2027 deadline.

Economy and Energy Minister István Kapitány told Telex that Hungary was working on “alternative supplies” and believed the country could obtain sufficient non-Russian gas by next October if current plans proceeded as expected. He said Budapest was in discussions over additional LNG supplies and potential imports from Romania.

The change would be substantial. According to the European Commission’s 2026 country report, Russia supplied 74% of Hungary’s imported gas in 2025 and more than 90% of its imported oil. Russian fossil-fuel imports were equivalent to 2.1% of Hungarian GDP.

One important potential source is Romania’s Neptun Deep Black Sea development, being developed by OMV Petrom (BVB:SNP) and Romgaz (BVB:SNG), which each hold 50%. The €4bn project remains on schedule to produce first gas in 2027 and is expected eventually to add about 8bn cubic metres a year to Romanian gas production.

Hungarian companies are also signing longer-term LNG contracts and will need to reserve sufficient import and transport capacity through neighbouring countries, Kapitány said.

The apparent reversal therefore has an important qualification: Hungary’s timetable largely reflects a legally binding EU phase-out rather than a unilateral decision by Budapest to abandon Russian energy. But like the AfD’s mooted talks with the Kremlin, Magyar’s announcement probably has more to do with politics and energy security policy.

One of Moscow’s traditionally closest energy partners inside the EU is now building the infrastructure and contracts needed to live without Russian gas. At the same time, a German party whose support has risen sharply is putting the resumption of that trade back onto the political agenda.