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HomeNewsHungary Settles Russia’s Invoice With Ukraine to Restore Oil Flows

Hungary Settles Russia’s Invoice With Ukraine to Restore Oil Flows

BERLIN — Hungary’s fundamental oil conglomerate mentioned on Wednesday that it will pay an excellent invoice owed by Russia’s oil pipeline operator to the Ukrainian authorities, clearing the way in which for Russian oil deliveries to renew to a few Central European nations.

Analysts described the monetary association as an sudden boomerang impact of sanctions imposed on Moscow.

The conglomerate, MOL Group, an administrator of the Hungarian arm of the Druzhba, or Friendship, pipeline, mentioned on Wednesday that it had “transferred the charge due for the usage of the Ukrainian part of the pipeline.”

Ukraine pledged to renew deliveries of Russian crude to the three nations, Hungary, Slovakia and Czech Republic, “inside a matter of days,” MOL mentioned.

The authorities in these three nations mentioned on Tuesday that Russian oil deliveries from the pipeline had stopped final week over “technical” banking points linked to the sanctions Europe had imposed on Russia to punish it for invading Ukraine in February.

“This appears to be simply one other instance of the ‘pleasant hearth’ from the sanctions that’s going to harm some European nations, on this case Hungary,” Vitaly Yermakov, a senior analysis fellow with Oxford Vitality, mentioned in an e mail. “Sanctioning financial exercise is a blunt weapon that may have unintended penalties.”

Led by Hungary’s prime minister, Viktor Orban, the three nations had lobbied for oil delivered by pipeline, versus by tankers, to be exempted from a European Union resolution to begin banning imports of Russian oil later this yr.

All three rely closely on Russian oil to gas their economies, however none extra so than Hungary. MOL, which is likely one of the nation’s greatest and most worthwhile corporations, introduced in April that it will pay dividends of $652 million to shareholders.

Mr. Orban’s Fidesz social gathering gained a landslide victory in April elections on the promise that, due to low-cost vitality from Russia, fuel and utility costs wouldn’t skyrocket as they’d elsewhere in Europe. However this month, Mr. Orban’s authorities was pressured to scrap a value cap on energy for higher-usage households, as the value of vitality has continued to climb.

Hungary, together with Slovakia and Czech Republic, sit on the finish of the southern arm of the Druzhba pipeline. Mr. Yermakov mentioned they’d no viable options to Russian oil within the quick time period.

Germany and Poland, on the northern finish of the pipeline, have stopped buying Russian crude and as an alternative begun buying it from different suppliers and having it shipped to ports on their northern coasts.

A tanker carrying a cargo of U.S. bitter crude, which has similarities in grade to the Russian oil delivered by way of the Druzhba pipeline, arrived on the German port of Rostock final week, Reuters reported, citing analyst and vessel monitoring knowledge.

A pipeline connects Rostock’s oil terminal on the Baltic Sea to the 2 fundamental refineries in jap Germany, PCK refinery in Schwedt and Leuna, each of which relied on Russia for deliveries till the beginning of the battle.

Benjamin Novak contributed reporting from Budapest.



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