Steven N.The delivery of Russian crude oil to Hungary, the Czech Republic, and Slovakia via the “Friendship” crude oil pipeline stopped last Thursday, several domestic and foreign media sources have reported. Quoting Bloomberg sources, Telex writes that as a result of sanctions, Russia is unable to pay the necessary transit fees.
Russian news agency RIA Novosti reported that Ukrainian state oil pipeline operator UkrTransNafta had shut down oil deliveries from Russia to the three EU member states. Russian oil traveling via Belarus continues to reach Poland and Germany.
Russian pipeline transport company Transneft is allegedly unable to pay transit fees to UkrTransNafta, which demands payment in advance, because of EU sanctions. Transfers to the account of the Ukrainian company were reversed by the banking system, the Russian company said.
“Gazprombank, which handles the payments, has informed us that the payment was returned in accordance with EU regulations, namely the seventh sanctions package,” Transneft announced in a statement.
Transneft is currently looking for alternative ways to pay the transit fees so that it can continue to deliver Russian crude oil to Hungary, Czech Republic, and Slovakia.
The availability of cheap Russian crude is what allows Hungary to maintain its official price cap of 480 Ft./liter for regular gasoline at the pump.
State oil and gas company MOL told HVG that although they had enough crude oil reserves for several weeks, the company was working to find a solution to the problem, and “has initiated negotiations on taking over the fee obligations.” [Magyar Narancs]
Growing up in Chicago, I learned early about gangsters internecine wars. One might usefully think of the current oil crisis as something that gangsters such as Orbán and Putin surely should have expected given Putins invasion of Ukraine and subsequent European sanctions. I take no pleasure in the likely near term difficulties for the average citizen whether Hungarian Slovak or Czech (or even Russian). The gangsters will continue to live their opulent life styles, the average person, not so much.
Probably worth repeating -although most readers won’t object to my language regarding “gangsters”- good sources that help establish this are books by and/or edited by Balint Magyar e.g.” Post Mafia State, The Case of Hungary”or “Stubborn Structures, Reconceptualizing Post-Communist Regimes.”This is especially relevant in light of subsequent posts. Thank you.