Hungary doing the right thing? It always comes with a price…
By Dori Felber. Read: 1 Min 54 s
On June 3, 2022, the European Union Council adopted a sixth package of sanctions against Russia, which, over the course of the following six to eight months, gradually phased out the import of Russian oil and petroleum products. Although the import of gas is not restricted by this specific round of sanctions, government counsel cautions that "nothing is off the table." However, there is a temporary exemption for certain Member States, namely Hungary, the Czech Republic, and Slovakia, which will allow them to continue to import Russian oil via pipeline.
While this exemption was only intended to be temporary, Hungary showed little interest in the past in moving away from Russian oil and has even signed fresh deals with Russia's gas export giant Gazprom for time-limited supplies. Additionally, Croatia constantly offers to expand the Adria pipeline, allowing Hungary to import non-Russian oil from its coast. Janaf, a Croatian pipeline operator, tested and verified in August 2024 that the pipeline can transport 14.3 million tonnes of oil annually, exceeding MOL’s refineries in Hungary and Slovakia. Nevertheless, MOL has contracted, only in 2024, 2.2 million tonnes of oil from Russia. Péter Szijjártó the Hungarian Foreign Minister, stated that “Croatia is simply not a reliable country for transit. Oil transit prices were raised fivefold by Croatia since the outbreak of the (Ukraine) war.” Thus, instead of utilising the transport pipes of an EU and NATO ally, Hungary has opted to rely on Russia’s oil, as Moscow continues its military aggression against Ukraine and poses a threat to the NATO alliance.
However, due to the executive vice president for strategic operations at MOL, György Bacsa’s, growing concerns that the derogation may close without having a solution for long-term competitive crude oil sourcing, he has stated that Hungary’s refineries could be ready to work without Russian crude oil by the end of 2026. Nonetheless, for such an initiative to take place, Hungary requires ‘a couple of hundred million’ from the EU, as, according to Bacsa, there are technological challenges involved, as well as a $500 million (€475 million) cost of modifying MOL’s refineries to handle different forms of crude oil.
The decisions taken by Hungary highlight how the EU must maintain its collective responsibilities to international security whilst also honouring the interests of its individual Member States. If the European Commission were to take a strong stance, eliminating exemptions for Russian pipeline oil, it would demonstrate the EU’s will and solidarity in tackling global concerns. Inaction not only decreases the impact of sanctions on Russia but also risks setting an unpleasant precedent for future crises involving EU unity as well as continuing to allow Hungary to take advantage of the EU and its benefits.
