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Wednesday, October 30, 2024

Viktor Orban's big problem. Oil from Russia is not flowing to Hungary. He calmed down and turned off the tap.

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Lukoil has suspended the transfer crude oil to Hungary in late June. This happened after the National Security and Defense Council of Ukraine (NSDC) extended and expanded sanctions against the Russian energy giant, according to Bloomberg.

Lukoil has suspended deliveries of Russian oil to Hungary

Lukoil has been subject to sanctions in Ukraine since 2018, but they are limited in nature and include only the withdrawal of capital, trade restrictions and a ban on participation in the privatization or leasing of state property – it reminds “Ukrainian Truth”. In June this year, the National Security and Defense Council significantly expanded them, adding, among other things, a transit ban – the “Przyjaźń” pipeline runs through Ukraine. The head of the Ministry of Foreign Affairs Hungary Peter Szijjarto said there were “legal complications” as a result of which “Lukoil is currently not delivering oil to Hungary.” “We are currently working on a solution,” he added after meeting his Russian counterpart Sergei Lavrov.

Lukoil is the main supplier of oil to the Hungarian fuel company MOL, which is also present on the Polish market. The Hungarian company took over from Orlen stations Lotus and in mid-June she boastedthat 273 locations have already changed their colors after rebranding in Poland.

Hungarian Business with Russia

Lukoil is one of several Russian companies supplying crude oil to Hungary via the southern branch of the Druzhba pipeline in Ukraine, according to industry data. Russian supplies currently account for two-thirds of all crude oil supplied to Hungary’s MOL. Fitch has said Hungary could fully replace Russian oil by 2025.

The meeting between Szijjarto and Lavrov took place after Prime Minister Viktor Orban's visit to Moscow earlier this month. The Hungarian leader tried to talk to the Russian president there Vladimir Putin on how to end the war in Ukraine. Bloomberg emphasizes that Hungary intensified energy cooperation with Russia even after Moscow's invasion of Ukraine, signing, among other things, several agreements to increase natural gas supplies. However, Budapest supported the EU's 14th package of sanctions against Russia after it obtained consent to exclude from it the project of expanding the nuclear power plant in Paks by the Russian Rosatom.

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