Hungary will block a 90 billion euro (about 106 billion USD) loan from the EU to Ukraine until Kiev resumes oil transportation to the country through the Druzhba oil pipeline, Hungarian Foreign Minister Peter Szijjarto announced this information on February 20, after Budapest announced it would use strategic reserves to cope with oil shortages.
Hungary and Slovakia - two countries that still own the last oil refineries in the EU using Russian crude oil transported through Druzhba - have made efforts to ensure supply since the flow was disrupted on January 27.
The disruption at the Druzhba pipeline occurred after a Russian drone attack. Ukraine said the attack damaged the Druzhba pipeline infrastructure.
Both Hungary and Slovakia accuse Ukraine of delaying the restoration of the flow for political reasons.
Blocking oil transit to Hungary through the Druzhba pipeline is a violation of the EU-Ukraine Association Agreement, going against Kiev's commitments to the European Union. We will not succumb to this extortion" - Hungarian Foreign Minister Peter Szijjarto shared on social network X.
In a decree issued on the night of February 19, the Hungarian government said it would release about 1.8 million barrels of crude oil from strategic reserves to compensate for the shortage.
However, the pipeline operator JANAF of Croatia said that Budapest did not need to do so after the Hungarian oil company MOL proposed that JANAF allow the transit of Russian oil transported by sea during the Druzhba shutdown.
Currently, a large amount of non-Russian crude oil is being transported through the JANAF pipeline system to MOL Corporation, while 3 more non-Russian oil tankers are also on their way to Omisalj Terminal port" - JANAF stated in a statement.
The statement also emphasized that MOL does not need to use stockpiles because the transportation of oil through the JANAF system to their oil refineries is still being carried out continuously and without delay.
According to a Hungarian government decree, MOL is entitled to priority access to crude oil released from the reserves. The company will be allowed to use this source until April 15 and must return it before August 24.
Data from the Hungarian Hydrocarbon Reserves Association shows that by the end of January, the country had enough crude oil and oil product reserves to meet demand for 96 days.
In the context of Hungary and Slovakia urgently seeking to ensure supply, MOL has ordered oil tankers from Saudi Arabia, Norway, Kazakhstan, Libya and Russia to supply refineries in Hungary and Slovakia, and at the same time temporarily suspended the delivery of diesel fuel to Ukraine earlier this week.
MOL said the first shipments are expected to dock at Omisalj port in Croatia in early March. After that, it will take about 5-12 more days for crude oil to be transported to the company's refineries.
The Slovak government has also declared a state of emergency for oil and pledged to release 1.825 million barrels of oil at the request of the Slovnaft refinery - a unit owned by MOL.
In developments related to the Druzhba oil pipeline, on February 20, Slovakian Ministry of Economy spokeswoman Maria Pavlusik said: "Ukraine once again postponed the resumption of oil supply to Slovakia through the Druzhba oil pipeline, specifically until February 24".
