BERLIN — Hungary’s main oil conglomerate said on Wednesday it would pay a bill owed by a Russian pipeline operator to Ukrainian authorities, clearing the way for the resumption of Russian oil supplies to three central European countries.
Analysts described the financial agreement as an unexpected boomerang of the sanctions imposed on Moscow.
Conglomerate MOL Group, administrator of the Hungarian branch of the Druzhba or Druzhba pipeline, said on Wednesday that it had “transferred the fee due for the use of the Ukrainian section of the pipeline”.
Ukraine has promised to resume supplies of Russian crude oil to the three countries, Hungary, Slovakia and the Czech Republic, “within a few days”, MOL said.
Authorities in those three countries said on Tuesday that Russian oil shipments from the pipeline stopped last week because of “technical” banking problems related to sanctions Europe imposed on Russia to punish it for its invasion of Ukraine in February.
“This appears to be just another example of the ‘friendly fire’ of sanctions that will hurt some European countries, in this case Hungary,” Vitaly Ermakov, a senior research fellow at Oxford Energy, said in an email. “Sanctioning economic activity is a blunt weapon that can have unintended consequences.
Led by Hungarian Prime Minister Viktor Orbán, the three countries lobbied for oil delivered by pipeline rather than tankers to be exempt from the European Union’s decision to begin banning Russian oil imports later this year.
All three rely heavily on Russian oil to fuel their economies, but none more so than Hungary. MOL, which is one of the country’s largest and most profitable companies, announced in April that it would pay dividends of $652 million to shareholders.
Mr Orbán’s Fidesz party won a landslide election victory in April on the promise that, thanks to cheap energy from Russia, gas and utility prices would not skyrocket as they have elsewhere in Europe. But this month, Mr Orbán’s government was forced to remove the electricity price cap for higher-consuming households as the price of energy continued to rise.
Hungary, together with Slovakia and the Czech Republic, is located at the end of the southern arm of the Druzhba pipeline. Mr Ermakov said they had no viable alternatives to Russian oil in the short term.
Germany and Poland, at the northern end of the pipeline, stopped buying Russian crude and instead began buying it from other suppliers and shipping it to ports on their northern coasts.
A tanker carrying a shipment of U.S. crude, which is similar in quality to Russian oil delivered through the Druzhba pipeline, arrived at the German port of Rostock last week, Reuters reported, citing analysts and ship-tracking data.
A pipeline connects the Rostock oil terminal on the Baltic Sea with the two main refineries in eastern Germany, the PCK refinery in Schwedt and Leuna, both of which depended on Russia for supplies until the start of the war.
Benjamin Novak contributed reporting from Budapest.