Hungary puts pressure on Ukraine over Russian oil
Date
8/25/2024 6:53:57 AM
(MENAFN) Hungary is pressuring Ukraine to approve a plan to resume the flow of Russian oil to its territory, Politico reported on Thursday. The dispute centers on Ukraine’s decision to halt the transit of crude oil supplied by the Russian energy company Lukoil through the Druzhba pipeline in June. This decision has disrupted oil supplies to Hungary and Slovakia, which are landlocked and reliant on this route.
Budapest is proposing a workaround to reestablish the oil flow. The plan, put forward by Gergely Gulyas, the head of Prime Minister Viktor Orban's office, involves rebranding Lukoil's oil. Under this proposal, the crude oil would be officially sold to the Hungarian energy company MOL before crossing the border. This approach aims to bypass the sanctions imposed by Ukraine on Lukoil, which have been in place since 2018 and prohibit the company from conducting trade, divesting its business, or participating in state property transactions in Ukraine.
Gulyas stated that the proposed arrangement would require an additional cost of USD1.50 per barrel to facilitate the oil’s transit under the new terms. “As soon as we can sign the contracts with the Ukrainian side, they will enter into force,” Gulyas was quoted as saying. The plan would allow Hungarian and Slovakian energy needs to be met while adhering to the sanctions’ constraints.
Ukraine’s move to block the Russian oil transit was part of broader sanctions and restrictions imposed on Lukoil, which have affected its operations in the region. While the European Union sanctions did not initially target the southern Druzhba pipeline flows, Ukraine’s new measures disrupted this crucial supply route, prompting Hungary to seek a resolution that could restore its oil supplies while circumventing the sanctions. MORE: EU sides with Ukraine over its own member states
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