New sanctions threaten security of European energy and fuel supplies, Hungary managed to win exemption
On Sunday, new Brussels sanctions will enter into force banning the import and re-export of processed petroleum products (such as petrol and diesel) of Russian origin. In Hungary, besides the exemption secured by the government, several other sources are strengthening security of supply, the Hungarian Energy Ministry said on Saturday.
However, the consequences of the new sanctions for the European market may also affect Hungary in the longer term, the ministry wrote in its statement, emphasizing that
Hungary’s position continues to be that the Brussels sanctions are harmful. They have failed to end the war and they are causing great damage to Europe. Brussels should not be concerned with imposing new sanctions, but should instead work on securing peace.
The government continues to represent the interests and opinions of the Hungarian people. 97 per cent of Hungarians say no to the sanctions, and it is time for Brussels to hear that, the ministry’s statement reads.
The European Union decided to restrict imports of Russian oil in the summer of 2022 in its sixth sanctions package, which was planned to take effect in two phases. The first phase, setting out an import ban on crude oil, came into force at the beginning of December. The second phase, to be implemented on 5 February, contains a ban imports of processed petroleum products and also on their re-exports between member states.
As is known, Hungary’s government has manged to obtain a temporary exemption for oil shipments by pipeline. It will still be possible to process and sell products of Russian origin within the country, but trade with other countries will only be permitted with products of non-Russian origin. Due to the tougher sanctions coming into force, petroleum products processed at the Bratislava refinery will also fall under some restrictions. The facility mainly supplies to neighbouring countries, including Hungary, but in the future will only be able to sell products of non-Russian origin. In addition to the Friendship pipeline, Hungary’s security of supply is ensured by domestic production, other imports and the Adria oil pipeline from Croatia.
However, the consequences of the new sanctions which are now coming into force could also have longer-term consequences for Hungary. As Hungary relies on imports to ensure a sustainable fuel supply, the sanctions-related rise in fuel prices in Europe may have a knock-on effect on the country.
Európában akár dízelhiány és az olajtermékek drágulása is várható, hiszen az unió gázolajszükségletének a felét eddig orosz források biztosították.
Europe may face a shortage of diesel and higher prices for oil products, as half of the EU’s gas oil needs have so far been supplied by Russian sources.
A szankciók következtében Európa most más, távolabbi régiók forrásaira – például indiai, közel-keleti és kínai termékek behozatalára – kényszerül, vagyis jóval messzebbről és drágábban tudja beszerezni az olajtermékeket, ami ellátási bizonytalanságot okozhat.
As a result of the sanctions, Europe is now forced to rely on sources from other, more distant regions, such as India, the Middle East and China, which means it has to source oil products from a much longer distance and at higher prices, which carries the risk of supply chain disruptions.
Meanwhile, the EU is contemplating a comprehensive energy sanctions package, which would include sanctions on nuclear energy and gas imports. The Hungarian government is firmly opposed to the further extension of sanctions on energy carriers.
The bans have failed to bring the end of the war any closer, while European consumers have faced drastic price rises, energy crises and supply disruptions. The failed sanctions policy is plunging Europe into crisis, imposing unaffordable extra burdens on countries, companies and European families,
the ministry’s statement concludes.