EU “in no rush” to settle Ukraine’s blockade of Russian oil flow

Ukraine's imposition of sanctions on oil giant Lukoil last month has halted the flow of Russian crude through the Druzhba pipeline, raising concerns about supply shortages in Hungary and Slovakia.

This caused Budapest and Bratislava to file a complaint with the European Commission (EC) on July 22, asking the executive body of the European Union (EU) to mediate the case.

However, at a recent meeting of EU trade representatives, 11 member states supported the EC's stance of "not rushing" to resolve the dispute over Lukoil's oil shipment suspension, while no member state sided with Hungary and Slovakia.

At a daily press conference in Brussels on July 25, an EC spokesman said Ukraine's decision to restrict Lukoil's transit of Russian crude to Hungary and Slovakia did not pose "immediate problems".

"As far as I understand, there is no immediate impact on the security of oil supplies to the EU. There is no immediate problem for the two member states concerned as they have 90 days of spare supplies under EU law," spokesman Olof Gill said.

The EC said it needed more time to gather evidence and assess the legal situation before making a decision, the spokesman added.

Hungary imports about a third of its oil supplies from Russia's Lukoil. Photo: RTE

Recent sanctions against Ukraine have banned Lukoil from using its pipelines through the country to transport oil, affecting Hungary and Slovakia, which together receive 2 million tonnes of crude a year from Lukoil. The Russian oil giant accounts for half of the supply on the Druzhba pipeline, a vital artery for Eastern European oil supplies.

Hungary and Slovakia have asked the EC to mediate talks with Ukraine as a step before taking legal action. The two member states claim that Kiev’s sanctions violate a 2014 association agreement between Ukraine and the bloc.

Hungary's top diplomat warned that Ukraine's actions could lead to an energy crisis.

Ukraine's sanctions on oil transiting its territory apply only to privately owned Lukoil. Kiev's pipeline operator UkrTransNafta will reject applications to transport oil contracted by Lukoil via Druzhba. Oil transit by other Russian companies, state-owned Rosneft and privately owned Tatneft, is not affected.

Hungary and Slovakia still have options for Russian oil, as they can tap supplies via other parts of the Druzhba pipeline system. While seaborne Russian oil imports into the EU have been banned since late 2022, oil flowing through the pipeline is still allowed.

Hungary, Slovakia and the Czech Republic are exempt from EU sanctions on Russian oil because they are heavily dependent on Moscow for the fuel.

Bratislava has offered Ukraine a solution to restore blocked oil supplies. The Slovak government office said in a statement on July 26 that Prime Minister Robert Fico discussed the issue with Ukrainian Prime Minister Denys Shmyhal, and that Fico proposed “a technical solution that would involve several countries, including Slovakia.”

Following Kiev's decision on Lukoil, Budapest has threatened to block the release of 6.5 billion euros from the European Peace Facility. An aide to Hungarian Prime Minister Viktor Orban on July 26 accused Ukraine of "blackmailing" Hungary and Slovakia by stopping oil shipments.

Mykhailo Podolyak, an aide to the President of Ukraine, denied the accusations on July 26, saying that Ukraine's decision to suspend Lukoil's oil shipments to Hungary and Slovakia was consistent with Kiev's sanctions against the company and had nothing to do with "blackmail".

Minh Duc (According to bne IntelliNews, Politico EU, Straits Times)

Source: https://www.nguoiduatin.vn/eu-khong-voi-dung-ra-dan-xep-vu-ukraine-chan-dong-chay-dau-nga-204240728210554802.htm