Hungary is racing against time to avoid power cuts and fuel shortages after Ukraine imposed a partial embargo on Russian oil transiting through its territory. Kyiv imposed sanctions last month to block crude sold by Moscow’s biggest private oil company, Lukoil, from being shipped to central Europe via pipelines — partly removing its immunity from EU sanctions, which were designed to give countries dependent on Russia more time to halt deliveries. Politico.
Ukraine aims to choke off one of the Kremlin’s most important sources of revenue, more than two years after the country was completely overrun. However, the move could raise concerns of supply shortages in Budapest, which receives 70 percent of its oil imports from Russia — half of which comes from Lukoil.
Ukrainian actions could create a dangerous situation
– Ilona Jesinska, a researcher and Hungarian expert at the Center for Oriental Studies, said. He added that Hungarians could face a sharp rise in energy prices and energy shortages “within weeks” if no solution is found. According to the expert, Hungary spent nearly a quarter of a billion euros on Russian crude oil and gas in April this year alone.
Peter Szijjarto talked about this earlier.
Foreign and Trade Minister Peter Szijjarto said on Friday that Ukraine's move could threaten Hungary's energy security in the long term, and criticized Kiev for the move.
The Ukrainian authorities have expressed their willingness to find a solution to the situation, but these attempts have since faded away.
– Tell.
In a meeting with Russian Foreign Minister Sergei Lavrov earlier this week, Szijjarto said the country had begun negotiations with Moscow on alternative deliveries of Russian oil.
“There is now a new legal situation in Ukraine, on the basis of which Lukoil is not supplying oil to Hungary at the moment,” the head of the ministry said on Tuesday, adding: “We are now working on a legal solution, because Russian oil is imported, which is important from the point of view of our energy security.”
Kremlin press secretary Dmitry Peskov on Friday accused Ukraine of making a “political decision” and claimed the situation was “critical” for those still buying Russian oil.
The ban on Lukoil comes at a time when relations between Kyiv and Budapest have become increasingly tense. Ukrainian President Volodymyr Zelensky this week attacked Hungarian Prime Minister Viktor Orban for meeting Russian leader Vladimir Putin this month as part of his self-proclaimed “peace mission.” Budapest is also determined to block arms shipments from the European Union to Kyiv.
Hostilities in the East Make Power Delivery Difficult
After Moscow’s full-scale invasion of Ukraine, the EU imposed a ban on Russian oil entering the bloc by sea. However, it exempted pipeline shipments — including those to Hungary, Slovakia and the Czech Republic via pipelines — to give countries time to find alternative supplies, provided they do so as quickly as possible.
According to Ukrainian representative Inna Sovson, who sits on the parliament's energy committee, Ukraine has now taken matters into its own hands.
We have been waiting for more than two years for the EU and G7 to impose real sanctions on the Russian oil pipeline.
He pointed out that the pipeline is still transporting 200,000 barrels of crude oil per day.
With Moscow earning $180 billion from oil exports last year, “it’s actually ridiculous to let them make that money by transporting that oil through Ukrainian territory, if that money is being used to kill us,” Sofson added.
The representative also pointed out the secondary purpose of the embargo, which is to overcome Hungary's opposition to arms shipments to Ukraine and Kiev's accession to the European Union.
We've already tried every diplomatic solution and it's never worked. So it seems we need to find other ways of how to talk to them.
– He told. Therefore, Hungary must move quickly to find other opportunities.
“A prolonged supply shutdown will force regional refiners to tap into their inventories and reduce them, while at the same time looking for some kind of diplomatic solution to the issue,” said Victor Katona, senior crude oil analyst at Kpler Intelligence.
Budapest could now negotiate additional imports with Rosneft, or increase supplies to Croatia via the Adriatic Pipeline, Jesinska said. Hungary could also release part of its strategic emergency reserve, which contains enough oil for 90 days.
The Ukrainian and Hungarian governments did not respond to POLITICO’s written requests, as did MOL and Russia’s Lukoil.
