Ukraine Resorts to Energy Weapons Against “Pro-Russian” EU Countries
Russian oil causes controversy among the “twenty-seven”
A tug-of-war is going on between Ukraine, on one side, and Hungary and Slovakia, on the other, which no longer receive oil from Russian oil giant Lukoil. Kiev has literally “shut off the tap” of the former Soviet Druzhba pipeline, which carried significant volumes of inexpensive Russian oil to Hungarian and Slovak refineries, virtually leaving Eastern European consumers “without a livelihood.”
Ukrainian sanctions against Lukoil have infuriated the governments of Budapest and Bratislava, which on Monday, July 22, sent a joint letter of protest to the European Commission, signed by the foreign ministers of the two Eastern European countries, asking them to “put pressure on Ukraine to fully restore Lukoil’s oil transit through its territory.” Budapest and Bratislava accused Ukraine of violating the terms of the association agreement with the EU, in which Kiev pledged “in black and white” not to hinder the transit of energy carriers through its territory.
Hungary and Slovakia are landlocked and, along with the Czech Republic, were exempted from the ban on overland oil imports from Russia. Hungary buys 70% of its oil imports from Russia, and oil shortages have already begun to cause gasoline prices to rise, with dramatic consequences for the entire economic chain.
According to Hungarian diplomatic chief Peter Szijjarto, after the three-day ultimatum expires, the issue will be brought before the European Court of Justice, and Hungary, in the absence of a quick and effective solution, will block any new payments to Ukraine through the so-called European Peace Instrument, a kind of financial “cauldron” that allows the European Union to channel financial aid to non-EU countries. To meet Kiev’s defense and armament needs, Brussels has mobilized more than 6 billion euros through this financial instrument between 2022 and 2024. In March, after intense pressure, Hungary agreed to increase the ceiling by another 5 billion euros and to create a special pro-Ukraine fund.
The agreement on Russian gas transit through Ukraine expires at the end of 2024, and Ukrainian President Zelensky has said he has “no intention to extend the agreement,” which would have dramatic consequences for the supply of blue fuel to a tormented Central and Eastern Europe.
Meanwhile, Russia said it is working with all interested parties to ensure the continuation of deliveries through the Druzhba pipeline. Russian Deputy Prime Minister in charge of energy Alexander Novak said, “Russia wants to continue supplying oil via Druzhba to the trio of countries comprising Hungary, Slovakia, and Czechia.”