The European Commission has said it needs more time to review the ongoing situation in Ukraine after Kyiv prevented Russian oil company Lukoil from transporting oil through its territory to the European Union.
Hungary and Slovakia had asked the European Commission to initiate a dispute settlement and, if unsuccessful, arbitration proceedings against Ukraine after Kyiv turned off the tap to the Druzhba (“Friendship”) pipeline.
But, European Commission Vice-President Valdis Dombrovskis told the Financial Times the EU executive will need more time to look into the case and assess if any action is warranted, according to hvg.hu.
Eleven countries vocally backed the commission’s position that no action should be taken for now. No member state spoke up in support of Hungary and Slovakia, where one of the refineries receiving oil from Lukoil is located.
The stalling is no surprise, as Brussels is in no mood to cater to Hungary given its refusal to send arms to Ukraine and its blocking of past sanctions against Russia, not to mention its attempts to block financial payments to Ukraine as well. Hungarian Prime Minister Viktor Orbán’s recent peace mission to Kyiv, Moscow, and Beijing is just the latest thorn in Brussels’ side.
Before the Ukrainian decree came into force, Lukoil made up half of Hungary’s Russian oil imports and a third of its total oil imports. However, other Russian exporters have stepped in to fill the gap, with the ban on Lukoil presenting no short-term impact and Russian oil flowing normally to Hungarian MOL Group’s refineries in both Százhalombatta, Hungary, and Bratislava, Slovakia. Or so says Kyiv. Hungary has stated they could face a problem by September. These facilities are currently limited to Russian-sourced oil due to both available supply routes and the infrastructure required for refining oil sourced from elsewhere.
However, the shortfall from Lukoil is bound to be an issue in the longer term, and Kyiv could also impose similar sanctions on other Russian oil companies.
Foreign Minister Péter Szijjártó has stated that the EU-Ukraine association agreement prohibits Ukraine from blocking energy transit; however, other sources have claimed there is a clause in the agreement that could allow for this. Ukraine claims transit is not being blocked since Russian companies other than Lukoil can use the pipeline network.
Hungary just recently initiated its EU presidency, and the first meeting of the Council of Ministers ended up largely questioning Orbán’s recent trip to promote an end to the war in Ukraine. His visit to Putin was the real issue, as the EU’s official position is that the Russian president is a war criminal who must be isolated and that no ceasefire can be discussed without Ukraine’s participation.
Hungarian Foreign Minister Péter Szijjártó’s take on the meeting was that he had to listen to 3-3.5 hours of “hysteria” and “whining.”
Szijjártó also announced that until Lukoil was allowed to deliver oil via the Friendship pipeline, everyone should just forget about the payment of €6.5 billion in arms compensation from the European Peace Facility. The issue with this is that that payment is not for Ukraine but for other member states to compensate them for weapons they have already sent to the war-torn country.