Hungary Blocks EU Refunds Over Ukrainian Ban on Russian Oil Transit

Hungary announced that it will block European Union refunds intended for member states supplying munitions to Ukraine until Kyiv permits the transit of Russian oil from Lukoil through a pipeline across its territory. This decision was communicated by Hungarian Foreign Minister Peter Szijjarto on Tuesday.

🚫 Hungary will continue to block 6.5 billion euro program for Ukraine until Kyiv resumes the supply of Russian oil, – MFA of Hungary

🇭🇺Hungary and 🇸🇰Slovakia also initiated the convening of the European Commission committee due to Ukraine’s termination of Lukoil oil transit… pic.twitter.com/wpJ85bvrHJ

— MAKS 24 🇺🇦👀 (@Maks_NAFO_FELLA) July 23, 2024

Earlier this month, both Slovakia and Hungary reported that they had ceased receiving oil from Lukoil via the Druzhba pipeline. This stoppage followed Ukraine’s decision last month to ban the transit of Lukoil’s resources through its territory.

In response to these developments, Hungary’s energy ministry convened a working group to address the supply security situation. The group reviewed the current steps taken and discussed potential future actions, as stated by the ministry.

Szijjarto emphasized that without resolving the transit issue with Ukraine, Hungary will not support the disbursement of the 6.5 billion euros from the European Peace Facility (EPF), which compensates EU countries for arms transfers. He was quoted by broadcaster ATV, stressing that all parties should “forget about the payment” until the matter is resolved.

⚡️#Hungary will block the €6.5 billion payment from the European Peace Facility intended to compensate for arms supplies to #Ukraine until the issue with Lukoil’s oil transit is resolved.

Hungarian Foreign Minister Péter Szijjártó stated this in an interview with ATV. pic.twitter.com/VANpCodumj

— KyivPost (@KyivPost) July 23, 2024

Ukraine’s foreign ministry has not yet commented on the situation. Kyiv maintains that while Lukoil’s oil has been blocked, the overall flow through the pipeline has not diminished, as other suppliers continue to use the route.

The Druzhba pipeline, also known as the “friendship” pipeline, has historically connected Russia to former Eastern Bloc countries. Despite more than two years of conflict, the pipeline has continued to operate, even as the EU has reduced its reliance on Russian energy. Hungary, however, remains heavily dependent on Russian oil, citing its necessity for supplying its refineries.

On Monday, Hungary and Slovakia requested the European Commission to facilitate a consultation procedure with Ukraine. This process could lead to the issue being taken to court if the EU executive does not intervene within three days.

🇭🇺#Hungary will block #EuropeanUnion refunds for member states that gave munitions to #Ukraine until #Kyiv allows the transit of oil from #Russia‘s #Lukoil, opens new tab through a pipeline over its territory, the Hungarian foreign minister said on Tuesday, – Reuters. pic.twitter.com/uFDNPk0QnS

— ZMiST (@ZMiST_Ua) July 23, 2024

The EPF, established in 2021, functions as a cashback system, reimbursing EU members for providing munitions to other nations. Since Russia’s invasion of Ukraine in 2022, EU member states that have supplied weapons to Ukraine have been eligible for compensation from this fund. However, Hungary has been obstructing the release of the next tranche of EPF funds for over a year, citing a variety of concerns.

Major Points:

• Hungary has announced it will block EU refunds for member states supplying munitions to Ukraine until Ukraine allows Russian oil transit from Lukoil through its territory.
• Slovakia and Hungary reported a halt in receiving oil from Lukoil via the Druzhba pipeline, following Ukraine’s ban on Lukoil’s resource transit.
• Hungary’s energy ministry held a meeting to review supply security measures and potential actions in response to the situation.
• Foreign Minister Peter Szijjarto stated that the 6.5 billion euros from the European Peace Facility (EPF) for arms transfers will not be paid until the transit issue with Ukraine is resolved.
• Hungary and Slovakia have asked the European Commission to mediate the issue, potentially leading to legal action if not addressed within three days.

Conner T – Reprinted with permission of Whatfinger News