MOL secures steady flow of Russian oil under new pipeline deal
The Hungarian energy company MOL announced that it had reached agreements with oil suppliers and the operators of the Druzhba pipeline to continuously transport oil from Russia through Belarus and Ukraine to Hungary and Slovakia. According to these agreements, MOL becomes the legal owner of the oil at the Belarusian-Ukrainian border.
MOL emphasized that this solution complies with the sanctions imposed by the European Union and Ukraine and will contribute to the security of supplies to Hungary and Slovakia.
According to the agreements, the oil will continue to reach Hungary and Slovakia in the same quantity as before. However, this will mean an additional cost for MOL in the form of insurance—$1.5 per barrel.
MOL signed an agreement for the transport of Russian oil
The company was seeking an alternative solution for the supply of Russian oil because on July 17, Ukraine halted the oil supply from the Russian company Lukoil to Slovak and Hungarian refineries. According to Hungarian Foreign Minister Peter Szijjarto, 33% of Hungary's oil imports came from Lukoil supplies through Ukraine.
Hungary is heavily dependent on Russian energy resources. It imports 160 billion cubic feet of natural gas annually under a 15-year contract with Gazprom, signed in September 2021. Additionally, the government in Budapest imported 5 million tons of oil last year, and the Russian state-owned company Rosatom is expanding Hungary’s only nuclear power plant in Paks, located in the central part of the country.
