Hungary and Russia are working to resume oil supplies to Lukoil after Ukraine tightened sanctions against the company.
As Bloomberg reminds, in June, Ukraine tightened sanctions against Lukoil, which effectively prohibit the company from using Ukraine as a transit country for its products.
Ukraine stops oil supplies from Russia to Hungary
Hungarian energy company Mol Nyrt. and a Russian oil company are working to resolve the problem, Foreign Minister Péter Szijjártó said late Tuesday after meeting with Russian Foreign Minister Sergei Lavrov on the sidelines of a UN meeting in New York.
– Currently, there is a legal situation in Ukraine that prevents Lukoil from supplying to Hungary. We are now working on a legal solution,” Siyarto said, without going into details of what led to the suspension of supplies.
At the same time, according to industry data, Lukoil is one of several Russian companies that supply oil to Hungary via the southern section of the Druzhba pipeline, which runs through Ukraine.
Currently, two-thirds of Hungary’s crude oil comes from Russia, but according to Fitch Ratings, Hungary will be able to completely replace these supplies by 2025.
Hungary has intensified energy ties with Russia even after Russia’s full-scale invasion of Ukraine, signing several agreements to increase natural gas supplies after Prime Minister Viktor Orban secured an exemption from European Union energy sanctions.
The Hungarian government returned almost all of Mol’s profits through a special tax aimed at covering the budget deficit.
Cooperation between Hungary and Russia
Szijjártó’s meeting with Lavrov followed Orbán’s visit to Moscow earlier this month, where the Hungarian leader allegedly tried to engage Russian President Vladimir Putin in discussions on ways to end the war in Ukraine.
EU partners have accused Orban of using Hungary’s EU presidency as a diplomatic demarche without the support of the other 26 member states.