Hungary and Slovakia are in a heated clash with Ukraine over a new ban on Russian oil that they fear will disrupt their energy supplies. The EU is stepping in to mediate, as Budapest and Bratislava warn that Ukraine’s move could severely impact their oil imports. Hungary is even threatening to block EU funds meant for military aid to Ukraine in protest. With the EU examining the situation closely, the conflict underscores growing tensions over energy security and political maneuvering within the bloc.
On Tuesday, the European Union announced that it would intervene after Slovakia and Hungary claimed that Ukraine’s partial restriction on Russian crude exports through the nation posed a threat to their oil supplies.
Last month, Kyiv imposed sanctions that prevented pipeline crude exported to Central Europe by Lukoil, the biggest private oil company in Moscow, raising concerns about supply shortages in Bratislava and Budapest.
Hungary and Slovakia claimed the move broke a 2014 association agreement between Brussels and Kyiv in a letter they sent to the European Commission on Monday, requesting the EU executive to start negotiations with Ukraine as a prelude to legal action reports POLITICO.
The EU executive is “currently studying the contents of this letter,” according to Commission spokesman Olof Gill, who also stated that the EU “stands ready to support the impact of [EU] member states in finding a solution together with Ukraine.”
Budapest gets half of its oil imports from Lukoil and 70% of its oil imports from Moscow. Slovakia has cautioned that the Ukrainian move might cut off oil supplies for its main refinery by 40%. According to the market research firm Kpler, Slovakia purchased 88% of its petroleum from Russia last year.
“This is an unacceptable step on the part of Ukraine, a country that wants to be a member of the European Union, and with a single decision puts the oil supply …. in fundamental danger,” Hungary’s Foreign Minister Péter Szijjártó said Monday.
Szijjártó intensified his verbal sparring on Tuesday, threatening that Hungary would withhold money intended to compensate other EU nations for military assistance provided to Ukraine in retaliation for Kyiv’s sanctions.
“As long as this issue is not resolved by Ukraine, everyone should forget about the payment of the €6.5 billion of the European Peace Facility compensation for arms transfers,” the Hungarian foreign minister vowed.
With constantly changing justifications, Budapest has been preventing the payments for more than a year. The EU’s top diplomat, Josep Borrell, has called this approach “shameful.”
Due to a loophole in EU sanctions, landlocked nations such as Hungary and Slovakia are still able to purchase Russian oil through the Russia-to-Europe Druzhba pipeline until they can come up with a different plan. Russian oil exports by sea to the EU are prohibited.
On Tuesday, Moscow retaliated against Ukraine over the latest sanctions. According to Maria Zakharova, a spokesman for the foreign ministry, Kyiv has turned “the transit of energy resources into a literal button for manipulating people, countries, and nations.” In the wake of its full-scale attack on Ukraine, Russia has reduced its gas deliveries to many EU nations.
According to the Commission, Kyiv’s current approach carries very little danger.
The EU’s trade policy committee, which deals with trade disputes with non-EU nations, will meet on Wednesday to further discuss the issue, a spokesperson for the Commission stated. “At the moment, there is no immediate impact on the security of oil supply to the EU.”
Oleksiy Chernyshov, the head of Naftogaz, the state energy company of Ukraine, stated that supplies had not been impacted by the sanctions against Lukoil during a meeting with investors on Monday.
“The transit of oil in July is normal if you compare the volumes with previous months, and there is no Lukoil oil in it,” he said. “We don’t believe there is a risk of a shortage in Europe. This is more of a political issue.”
Yet, Slovakian and Hungarian energy security could soon face a crisis due to the curtailment, according to Viktor Katona, head of Kpler’s oil analytics division.
“Even though up until now flows have not really been impacted by Ukraine’s sanctioning of Lukoil, there remains a notable gap in supply towards the end of the month,” he said.
“The European Commission is seeking to pacify tensions that are running high but in the medium-to-long-term, Brussels needs to take a stance,” he added.
Previously, GreatGameInternational reported that in an interview, Indian Oil Minister Hardeep Singh Puri said that the West has tried to “weaponize” Russian oil for ideological reasons.
