Hungary can’t survive without Russian oil – FM

Budapest does not have a suitable alternative to Moscow’s supplies, Peter Szijjarto has insisted

Hungary cannot survive without Russian oil, Foreign Minister Peter Szijjarto has warned, stressing that Ukraine’s decision to suspend transit poses a serious challenge for Budapest.

Kiev halted the transit of crude supplied by Russian energy giant Lukoil via the Druzhba pipeline in June, citing sanctions. The measure has directly hit landlocked Hungary and Slovakia, depriving them of oil previously exported by Lukoil through Ukrainian territory.

In an interview with Russian business daily RBK on Monday, Szijjarto said Hungary will be completely deprived of oil without supplies from Russia.

“We will not be able to feed the country in a broad sense. We simply will not be able to meet the demand for fuel… because we do not have sufficient alternative infrastructure,” the diplomat said.

“You just have to look at the numbers… We do not want to take such risks,” Szijjarto added. “Therefore, the fact that Ukraine has made such a decision is a very serious challenge for us. It affects about a third of our imports from Russia. In Slovakia, the situation is even worse, these supplies account for about 40% there,” he stressed.

Kiev imposed sanctions on Lukoil in 2018, having banned the company from divesting its business in the country, as well as prohibiting trade operations and participation in the privatization or leasing of state property. Lukoil still sent crude via the southern arm of the Druzhba pipeline as EU sanctions did not target these flows.

The EU prohibited transport of Russian crude oil by sea in December 2022 as part of far-reaching sanctions on Moscow over the Ukraine conflict. Hungary, Slovakia, and the Czech Republic have been granted exemptions by Brussels as they source alternative supplies.

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Slovakia and Hungary are the only EU member states that have rejected the bloc’s policies on supplying Kiev with military aid amid the conflict with Moscow. Both states have repeatedly called for the crisis to be solved through diplomacy.

Last week, Politico reported that Budapest had proposed a solution for the restoration of halted Russian oil flows by rebranding Lukoil products. That way, the crude shipped via Ukraine could be officially sold to Hungarian energy giant MOL before it crosses the border. The arrangement could reportedly mean paying an additional $1.50 per barrel to secure transit outside of previous agreements.

Szijjarto told RBK that a temporary solution to the crisis situation could be found, stressing that “in the long term, we need to look for another, legally significant solution.” 

The Hungarian diplomat traveled to Russia last week to discuss energy security issues. Budapest is “satisfied with Russian energy cooperation, which is one of the guarantees of the country’s food security,” Szijjarto wrote on Facebook after meeting with the head of Russian energy giant Gazprom, Aleksey Miller.