Hungary is willing to reduce its reliance on Russian oil, but only if the European Union provides financial support to help transition to alternative suppliers, a top executive at Hungary’s largest oil and gas company said.
György Bacsa, Executive Vice President for Strategic Operations at MOL Group, which operates Hungary’s only refinery importing Russian crude oil, stated that the company is open to diversifying its oil sources before the EU’s informal deadline to end Russian oil imports by 2027. He added that Hungary’s refineries could be ready to stop processing Russian crude by the end of 2026, but only if the EU provides financial assistance to adapt the refineries.
Bacsa pointed out that adapting MOL’s refineries would cost around $500 million, and he believes the EU should contribute “a couple of hundred million” to support the transition. MOL also operates refineries processing Russian crude in Slovakia. However, Bacsa expressed frustration that these efforts currently do not qualify for EU financial aid, as refinery operations are not eligible for assistance even when it comes to ensuring supply security or moving away from Russian oil.
Hungary remains one of the few EU countries still allowed to import Russian oil, following a bloc-wide ban on seaborne oil imports in 2022. The EU provided exemptions for pipeline oil deliveries to countries, including Hungary, that are heavily dependent on Russian oil. While this exemption was initially meant to be temporary, Hungary has shown limited interest in reducing its reliance on Russian oil, even increasing its imports.
However, Bacsa raised concerns that the EU could impose a concrete deadline to end the exemption or introduce more punitive measures. He noted that the upcoming EU Energy Commissioner, Dan Jørgensen, plans to outline a roadmap for ending all Russian fossil fuel imports, which may not account for Hungary’s specific situation. Bacsa argued that Western European countries, like Denmark, might find it easier to meet the deadline, while Central European countries like Hungary and Slovakia might be left without sufficient alternatives.
For now, Hungary will continue to rely on Russian energy. While other EU countries, such as the Czech Republic, have significantly reduced Russian crude imports, Hungary has notably increased its fuel purchases from Russia. Hungary has also signed new, time-limited contracts with Gazprom, Russia’s gas export giant.
MOL currently holds a long-term crude oil contract with Lukoil, Russia’s largest private oil firm, which is set to expire in June 2025. Bacsa mentioned that MOL would renew the contract if it remains legally feasible.
The continuation of Russian oil imports is partly due to the discounted prices Hungary receives on Russian crude, according to experts. The Hungarian government indirectly owns nearly one-third of MOL, and the company has been subjected to several windfall taxes, generating billions to help balance the country’s budget. However, this arrangement faced a challenge in July when Ukraine imposed sanctions on Lukoil, blocking the company from transporting oil supplies through Ukraine, which jeopardized MOL’s contracts.
MOL found a workaround by negotiating an agreement with Ukraine to take ownership of the Russian oil as it crosses into Ukrainian territory. This arrangement ensures that the oil is classified as Hungarian rather than Russian, allowing it to avoid Ukrainian sanctions.
However, this solution may not be sufficient for the EU. Incoming EU Energy Commissioner Jørgensen, who is expected to take office in December, could consider MOL’s imports through Ukraine as still being Russian oil. The European Commission has not yet responded to a request for comment on the matter.
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