Russian Oil Shutdown Troubles Putin’s Allies in Europe

With global attention fixed on the war engulfing OPEC’s top members, tankers heading to Croatia have largely flown under the radar.

Hungarian refiner Mol Nyrt. ordered more than seven tankers last month. (Photo: MOL)

Yet those deliveries represent a tentative step toward loosening Russian President Vladimir Putin’s grip on two of his European Union allies—Hungary and Slovakia—because the ships are carrying oil that did not originate in Russia, Daniel Hornak, Jasmina Kuzmanovic, Marton Kasnyik and Andrea Dudik reported for Bloomberg News.

While the EU exempted pipeline imports from its Russian oil embargo after Moscow attacked Ukraine four years ago, the alternative—though more expensive—undermines claims by Budapest and Bratislava that Russian Urals crude delivered via a Ukrainian pipeline was their only viable option. It also strengthens Brussels’ efforts to deepen Putin’s isolation.

Hungarian Prime Minister Viktor Orban and his Slovak ally Robert Fico have used energy concerns to block aid to Ukraine, including a proposed $90 billion package.

Even if Orban loses April’s elections, Fico will remain in office for at least another 18 months and has vowed to continue blocking the loan if necessary.

“The arguments of Orban and Fico just don’t make any sense,” said Karel Hirman, a former Slovak economy minister.

“They are jeopardizing their countries’ energy security by insisting on oil supplies from a producer that is waging war against the country that transports that oil.”

Oil is just one front in Orban’s increasingly hostile relationship with both Ukraine and the EU. Ukraine this week accused Hungary of “hostage-taking” after it detained seven employees of a state-owned bank in Budapest.

Politics aside, Hungarian refiner Mol Nyrt. ordered more than seven tankers last month. One shipment from Libya has already arrived at the Croatian terminal on the island of Krk, and the rest are expected within days.

That puts Mol’s order at more than 1 million tons of non-Russian crude for its refineries in Hungary and Slovakia, Gabriel Szabo, chief executive officer of Mol’s Slovak refinery, told the Hospodarske Noviny newspaper.

At current prices, the orders are valued at about $650 million—roughly 60% more than the market price of Russian oil, according to Bloomberg calculations.