Russian oil flow to Hungary, Slovakia stable in July despite Lukoil ban, Bloomberg reports

Russian crude exports to Hungary and Slovakia remained within norms in July as the sanctioned Lukoil oil was offset by supplies from another Russian company, Tatneft, Bloomberg reported on Aug. 27, citing an undisclosed source.

After Ukraine tightened its restrictions on the Russian oil giant Lukoil, the step has effectively halted the flow of the company's supplies to the two EU countries via the Druzhba pipeline since late June.

This led to a diplomatic row between Kyiv on one side and Bratislava and Budapest on the other. The latter two countries claimed the move undermined their energy security, threatening repercussions.

Hungary and Slovakia are among the few countries granted exemptions from EU sanctions on Russian pipeline oil.

Already in late July, the Slovak government proposed a "technical workaround" to the problem to Ukraine, without publishing details. Budapest said last week that it is is close to finalizing talks on "balanced" oil supply.

Despite the concerns voiced by the two Central European nations, Russian crude supplies in July amounted to 436,000 metric tons to Hungary and 356,000 to Slovakia, according to Bloomberg's source familiar with industry data.

These figures are an increase compared to June and roughly on par with last year's levels. Even though Lukoil supplies were cut off in July, Tatneft boosted its own exports, mostly replacing the missing barrels, Bloomberg wrote.

This appears to be in-line with a statment by Oleksii Chernyshov, the CEO of the Ukrainian energy company Naftogaz, who said in July that the volume of oil transiting through Ukraine has not changed despite the sanctions on Lukoil.

"If the current oil suppliers do not fall under sanctions, Ukraine can continue transit," Chernyshov said.

Similarly, Hungary's leading refiner Mol rebuffed the concerns and said that the country will not suffer any shortages as a result of Ukraine's sanctions.

Following an appeal by Hungary and Slovakia, the European Commission examined the matter but concluded there was "no reason for concern."

Orban’s arguments crumble in Lukoil spat with Ukraine

The Hungarian government’s arguments against Ukraine’s sanctions on Russian oil company Lukoil are falling apart. Hungary accused Ukraine of “blackmail” and endangering its energy security after Ukrainian sanctions blocked Lukoil, Russia’s second-largest oil company, from transiting crude oil throu…

The Kyiv IndependentDominic Culverwell