Hungarian Oil and Gas Company MOL is in the final phase of negotiations to secure crude oil from Russia, a Hungarian government official said today, quoted by Reuters. The need to reach a new agreement is due to Ukraine's ban on the transportation of oil from "Lukoil" through its territory, writes BTA.
The new agreement is expected to be more expensive for the MOL than what was in place before Kiev's ban. The Hungarian oil company will take the financial risk of transporting Russian crude oil passing through Ukraine, said Gergely Gulyas, Prime Minister Viktor Orbán's chief of staff.
He added that Hungary hopes the decision will be in place at least until the end of the war, without specifying when that might happen.
"Although the transfer (of oil) will be more expensive and MOL will bear the risk of transportation from the Russian-Ukrainian border, there is a legal solution that can provide a long-term solution,'' Gulyas said.
In his words, the Hungarian oil company will become the legal owner of the oil on the Ukrainian-Russian border and will assume the risk of its passage through the country, which has been at war with Russia since February 2022. According to the government's estimates, this would mean additional insurance price of 1.5 dollars per barrel for MOL.
Gulias said the talks are expected to conclude in early fall, without giving a more specific time frame.
At the end of June, the Russian oil exporter "Lukoil" was banned by Kiev from using the "Druzhba" oil pipeline, which passes through the territory of Ukraine, partially supplying the refineries of Hungary and Slovakia.
The two landlocked countries have warned of possible fuel shortages from September unless a solution is found.
Hungary maintains a "pragmatic relationship with Moscow," according to the country's official position, following Russia's invasion of Ukraine. This creates tension with other European Union states that want to take a tougher stance towards Moscow and give up Russian gas and oil, Reuters notes.