The gas transit contract between Russia and Ukraine will expire at the end of this year while the oil transit contract will expire on January 1, 2030. Both agreements were signed by Russia and Ukraine in 2019.
Kiev has said it will not extend the gas transit contract, asking Europe to find a replacement for Russian gas, but has not yet expressed its intention to transit Russian oil.
Kiev Post pointed out that giving up revenue from transporting both Russian oil and gas will not be a big loss for Ukraine.
The annual profit from transporting Russian oil and Russian gas is estimated at 10 billion hryvnia ($250 million) - very small compared to the estimated state budget revenue of Ukraine in 2024 of about 1.78 trillion hryvnia ($43.7 billion) and spending of about 3.35 trillion hryvnia ($82.3 billion).
In general, the annual profits from transiting Russian oil and gas are equal to the income Ukraine earned from selling bonds for several weeks.
On July 17, Ukraine banned Lukoil from using the Druzhba pipeline to transport oil to the Slovnaft refinery in Slovakia owned by Hungarian company MOL.
Over the next two weeks, Slovakia and Hungary have continuously spoken publicly on this issue, calling on the European Commission to intervene.
ExPro oil analyst Mykhailo Svyshcho told Kiev Post that in fact, Ukraine did not stop transporting Russian oil, even increasing oil transportation by 30% between June and July. This is the first time Russian oil transported through Ukraine has increased since the beginning of 2024.
Ukraine has also only imposed sanctions on Lukoil's oil transported to Hungary and Slovakia, emphasizing that the country has the right to stop the transport of Russian oil but in fact it continues the transportation, analysts pointed out.
Lukoil oil may still be flowing through the Ukrainian pipeline because it cannot see the data of which companies are transporting oil. In addition, Russian companies can exchange oil with each other and export, using the name of another enterprise.
"Ukraine cooperates with Russian Transneft. Transneft does not provide data on which companies export Ukraine's pipeline oil, but only provides export volumes," Svyshcho said.
This is also happening in the northern section of the Druzhba oil pipeline through Belarus, Poland and Germany: Russian oil has been exchanged for Kazakhstan oil and transported to these countries.
Kiev Post pointed out that the Russian oil blockade implemented by Ukraine only affects Lukoil - Russia's largest private oil company. Meanwhile, there are many other large companies in the Russian oil market including Rosneft, Tatneft, Gaspromneft, Transneft.
The author of the article said he questioned why Lukoil was the only company banned from transiting oil through the Ukrainian pipeline. However, the Office of the President of Ukraine, Ukrainian intelligence agencies and the energy committee of the country's parliament declined to comment or did not respond.
"It is better to ask those who have implemented this decision," parliamentarian and head of the Ukrainian parliament's energy committee Andrii Herus told the Kiev Post.
