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Hungary oil group pays price to restart move of Russian oil by way of Ukraine

Hungary oil group pays fee to restart flow of Russian

Hungarian power firm MOL has paid oil transit charges to Ukraine on behalf of a Kremlin-controlled firm with the intention to restart flows of crude alongside a crucial provide route from Russia to Europe.

The southern department of the Druzhba pipeline, which transports Russian oil throughout Ukraine to Hungary, Slovakia and the Czech Republic, stopped pumping six days in the past after Russian state-owned pipeline operator Transneft stated it was unable to pay transit charges to Kyiv due to sanctions on Russia over the invasion of Ukraine.

The Hungarian fee is aimed toward ending a stand-off that had threatened crude provides to central Europe. It has highlighted the difficulties that EU nations face in searching for to punish Moscow for its assault on Ukraine whereas additionally limiting the injury to their very own economies.

The European Fee, the EU’s govt arm, stated it was “in shut contact with the involved member states and Ukraine on this matter”.

“On the whole, the sanctions adopted by the European Union foresee an exemption permitting transactions with sure state-owned enterprises if they’re strictly vital for the direct or oblique buy, import or transport of oil,” stated Arianna Podesta, a fee spokesperson, including that Transneft was one among these enterprises.

MOL declined to answer a query from the FT relating to how Transneft would repay the Hungarian firm for making the fee on its behalf or particulars of any future funds. The corporate stated flows of Russian crude to Hungary had been anticipated to be restored on Thursday.

“The technical situation behind the delay was resolved due to fast motion by MOL: the corporate transferred the transit price due for using the Ukrainian part of the pipeline, after which the Ukrainian get together restarted the transport of crude oil on the Southern part of the pipeline, as promised,” the corporate stated in an announcement.

The Hungarian firm blamed “technical points rising on the banking entrance” for the stoppage.

Transneft pays Ukraine’s state-owned UkrTransNafta to make use of the pipeline, however stated on Tuesday that the European banks that course of the fee had not obtained the required approvals, including that EU regulators “have but to type a typical place” on how or whether or not the banks ought to enable the transactions.

Transneft confirmed on Wednesday that the funds from MOL to Ukraine had been processed. “We’re getting ready to renew pumping,” spokesperson Igor Dyomin advised the Monetary Instances.

Slovaft, the Slovakian firm that can be provided by the pipeline, stated on Wednesday afternoon that Russian crude oil “is already arriving once more in Slovakia by way of the Druzhba pipeline”.

Slovaft attributed the shutdown to “technical issues on the financial institution stage” to pay the charges. It stated it had been ready to attract on oil reserves in order that manufacturing at its Bratislava refinery continued.

Two Czech refineries owned by Orlen additionally maintained their operations by counting on different sources of oil, the corporate stated on Wednesday.

Further reporting by Raphael Minder in Warsaw and Tom Wilson in London

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