The Ukrainian move to block the flow of oil from Russia to Central Europe only affects oil from the Russian private company Lukoil - which provides up to 40% of the demand of Hungary and Slovakia. Meanwhile, oil from Russia passing through the Ukrainian oil pipeline, provided by the Russian state-owned companies Rosneft and Tatneft, is not affected.
According to Sergiy Sydorenko - co-founder and co-editor of European Pravda, former Ukrainian minister - the supply of oil through the southern branch of the Druzhba pipeline, running through Ukraine to Slovakia, Hungary, and the Czech Republic, has been continuous and almost uninterrupted since February 2022 - the time of the conflict in Ukraine.
Sergiy Sydorenko and other sources confirm that the supply of oil to Hungary and Slovakia has not been affected by the new Ukrainian sanctions. After Lukoil was sanctioned, Rosneft and Tatneft increased their supply, resulting in the total amount of Russian oil delivered to Hungary and Slovakia remaining unaffected.
When banning oil from Russia, the EU granted an exception for the oil pipeline to Central Europe, allowing oil refineries in the Czech Republic, Slovakia, and Hungary to temporarily receive oil from Russia through Druzhba, and then sell oil products made from Russian oil on the EU market. Ukraine also receives oil products made from Russian oil, including gasoline and diesel fuel used by the Ukrainian military.
Initially, the Druzhba pipeline was expected to be completely stopped or reduce the flow of Russian oil from 1.1 if new agreements were reached, as the supply of oil to Central Europe would change, Sydorenko wrote on European Pravda.
The start of these changes has been seen. The Czech oil refinery, owned by the Polish PKN Orlen group, has announced that it will stop consuming Russian oil after ensuring additional supplies through the Trieste-Ingolstadt pipeline.
Similarly, in Slovakia and Hungary, oil refineries in Bratislava and Százhalombatta are ready to receive additional supplies from the Adria pipeline connecting the Croatian island of Krk. These oil refineries, owned by the Hungarian MOL group, plan to import at least 60% of their oil from the Adria pipeline from 2025.
A new reality is expected to be seen in the region in 2025: Oil refineries in Slovakia and Hungary will no longer depend entirely on oil from the Druzhba pipeline. In the past year, the Bratislava oil refinery has imported over 30% of its oil from Adria. Százhalombatta is similar. However, there is still up to 70% of Russian oil being transported through Ukraine, with 40% provided by Lukoil and the rest by Rosneft and Tatneft.
The recent Ukrainian decision to stop supplying oil from Lukoil, while not applying any restrictions to Rosneft and Tatneft, has raised many questions, Sydorenko said.
The Ukrainian government has not explained the selective measures to block Russian oil and there has been no comment from Brussels, showing a lack of coordination with European organizations. The Ukrainian decision to impose sanctions also lies outside the predictions of the Slovak and Hungarian governments.
Slovakia and Hungary have raised this issue at the EU, seeking mechanisms to counter the Ukrainian decision but were rejected. For example, the Bratislava oil refinery depends on 70% of its supply from the Druzhba pipeline, with 40% from Lukoil. Therefore, the Ukrainian decision affects about 1/4 of the refinery's supply - a headache but not a disaster.
Naftogaz - the Ukrainian state-owned oil company - has publicly stated that, in fact, the amount of oil flowing through the Druzhba pipeline has not decreased, as Lukoil's oil has been completely replaced by supplies from the two remaining Russian companies.
