Hungary and Slovakia are threatening legal action over the termination of transit of Russian oil
23 July 2024 09:10
Hungary and Slovakia have appealed to the European Union for help in persuading Ukraine to resume the transit of oil from Russian supplier Lukoil to Eastern Europe. This was stated by the Minister of Foreign Affairs of Hungary, Péter Szijártó, after the meeting of EU foreign ministers in Brussels on Monday, Ukrainian Komersant Komersant.Info reports with reference to Bloomberg.
Ukraine tightened sanctions against Lukoil last month, effectively banning the company from using Ukraine as a transit country for its oil. In response, Budapest and Bratislava are ready to sue Ukraine if no agreement is reached.
Hungary has initiated a so-called consultation, during which the European Commission has three days to find a solution on behalf of the affected EU member states. If the EU executive fails to do so, Hungary and Slovakia will turn to an arbitral tribunal to rule on the matter. Sijarto considers Ukraine’s actions a violation of the country’s association agreement with the 27-member bloc.
Minister of Foreign Affairs of Ukraine Dmytro Kuleba, who joined the EU meeting via video link, denied Kyiv’s responsibility for the suspension of supplies to Lukoil.
Although neither Hungary nor Slovakia are facing fuel shortages, with alternative routes available, including via Croatia, fuel prices could rise further. This could threaten Hungary’s budget revenues from a special tax that the local operator pays on profits from Russian oil.
Hungary wants a quick resumption of supplies to Lukoil to avoid damage to the economy. Hungary receives about 2 million tons of oil from Lukoil each year, a third of its total imports, while Slovakia receives about 2.5 million tons, equivalent to 45 percent of its imports, Szijjártó said.
Slovak Prime Minister Robert Fico contacted his Ukrainian counterpart Denys Shmygal over the weekend to find a solution. He also warned that Ukrainian sanctions against Lukoil could jeopardize the supply of diesel fuel from Slovakia to Ukraine, which he said accounted for a tenth of the war-torn country’s supply.
Szijártó also noted that Hungary is the main exporter of electricity to Ukraine, although he refrained from making statements about the possible termination of these supplies in response to Kyiv’s actions.
The situation remains tense as energy is seen as a potential leverage point for Hungarian Prime Minister Viktor Orbán, who has repeatedly tried to veto or weaken EU sanctions against Russia over its military aggression against Ukraine.
