How the EU is seeking a solution to "Hungarian impasse" in issue of oil embargo

Author

Valery Moiseev

A personal meeting between European Commission (EC) President Ursula von der Leyen and Hungarian Prime Minister Viktor Orban on May 9 did not lead to a much-needed breakthrough on banning oil imports from Russia.

"Discussion with PM Viktor Orban was helpful to clarify issues related to sanctions and energy security," von der Leyen wrote. "We made progress, but further work is needed. I will convene a VC with regional players to strengthen regional cooperation on oil infrastructure."

The videoconference was originally scheduled for the morning of May 10 with von der Leyen, Orban, and French President Emmanuel Macron, whose country currently chairs the EU Council. But later the representative of the EC said that it was postponed and would be held as soon as progress was made at the "technical" level.

Discussions now focus on infrastructure related to oil transportation, refinery infrastructure, and energy system transformation rather than differentiated timelines, the official explained.

Reports last week suggested that Hungary could be allowed to complete the phase-out by December 2024, but Orbán said his country, which is landlocked and therefore unable to import tanker oil, would take four to five years to modernize its energy system.

"We cannot allow the Hungarian people to be made to pay the price of this war," Hungary's Foreign Affairs Minister Péter Szijjártó said after the two leaders had met in Budapest. "Hungary's energy supply is currently on solid ground. However, the entry into force of the current sanctions package would destroy Hungary's energy security: it would be impossible to obtain the crude oil needed to operate the Hungarian economy."

Szijjártó added that the talks brought "some progress" and helped explain the country's special circumstances and economic problems.

Note that although Hungary is the most vocal critic of the embargo idea, it is not alone. Slovakia, the Czech Republic, and Bulgaria also demand that their national interests be taken into account in order to prevent economic shocks.

For instance, Slovakia is asking for a three-year delay in order to modernize the technology of its only refinery, Slovnaft, that today works exclusively with heavy oil from Russia. The government estimates that converting the system to lighter oil will require four to six years and an investment of 250 million euros.

The Czech Republic is asking for a delay until June 2024, when it expects to connect to the Transalpine Pipeline.

The EU sanctions require the unanimous approval of all 27 member states.

"I think we can have an agreement within a week, we are working hard on it. It's probably a matter of days," French European Affairs Minister Clement Beaune said on May 10. "We have to move quickly, and I say this with confidence: there will be a sixth package of European sanctions, they will be very powerful and we will gradually get out of Russian oil."

Against this background, the European Parliament approved a package of proposals for the reform of the European Union, including, among other things, the rejection of the consensus principle in making important decisions.

From February 24 to May 9, 27 EU member states spent about 24 billion euros on Russian oil. Such data are provided by an independent research organization Centre for Research on Energy and Clean Air (CREA).

EU imports of Russian oil and oil products, billion euros