Hungarian company agrees to transit Russian oil through Ukraine – Bloomberg
9 September 2024 22:44
Hungarian energy company Mol Nyrt. said it has signed a deal that will ensure the continuous supply of Russian oil through a pipeline passing through Ukraine. This was reported by Bloomberg, according to "Komersant Ukrainian"
The Hungarian company’s announcement came after Ukraine banned Lukoil from continuing to use it as a transit country in response to Russia’s invasion. According to the agreement, Mol Nyrt., which controls refineries in Hungary and Slovakia, will take over oil deliveries at the Belarus-Ukraine border from 9 September.
Previously, the Russian side was responsible for transporting crude oil to the borders of Hungary and Slovakia with Ukraine.
“The new agreement provides a sustainable solution for the transportation of oil through the Druzhba pipeline,” said Gabriel Szabo, executive vice president of Mol Downstream, referring to the pipeline that connects Russia and Hungary via Ukraine.
It is not specified which company or companies will supply the gas.
As a reminder, in June, Ukraine tightened sanctions against Russia’s Lukoil, which in July halted the transit of oil from the company to Slovakia and Hungary. In response , Hungary accused Ukraine of violating the Association Agreement and threatened legal action. The European Union, however, is not prepared to help Hungary.
Payback for dependence
After Moscow’s full-scale invasion of Ukraine in 2022, the EU imposed an embargo on imports of Russian oil, a key source of revenue for the Kremlin’s war effort. However, this embargo had an exception for shipments via pipelines, including those to Hungary, Slovakia and the Czech Republic via the Druzhba pipeline. This was done to give these countries time to find alternative supplies, with the understanding that they would do so quickly.
Germany and Poland, which also imported oil through Druzhba, stopped buying Russian oil last year. The Czech Republic plans to end its imports from Moscow by 2025, and Slovakia has already begun upgrading its main refinery to handle more non-Russian oil.
But Hungary has chosen a different path, instead increasing its pipeline oil imports by 50 per cent from 2021. Budapest has also signed new deals with Russian gas giant Gazprom.
Hungary vs Ukraine
Today’s Hungary is a long-time supporter of Russia and an enemy of Ukraine. Among other things, Hungary is delaying the adoption of legislation that would allow Ukraine to receive up to €2 billion from the EU for weapons at the expense of profits from frozen Russian assets.
After a lengthy debate, EU member states agreed in May to use the proceeds of about €190 billion of frozen Russian assets held in the Belgian depository Euroclear to buy weapons for Ukraine. However, Hungary opposed this, refusing to provide unanimous EU support for each payment to Ukraine. At the same time, Hungary does not seem to object in general, but has concerns about the automation of payments.
The situation is further complicated by the fact that Hungary took over the EU presidency for six months on 1 July, giving it more influence and making it even harder for EU officials to convince it.
