Hungary's MOL Nears Final Agreement for Russian Oil Transport Amid Kyiv Ban
(Reuters) — Hungary's MOL is in the final stages of talks to set up a scheme to ensure crude oil flows from Russia after Kyiv banned its main partner Lukoil's transport through its pipelines, a Hungarian government official said on Thursday.
The new scheme is expected to be more expensive for MOL than the one in place before Kyiv's ban, and MOL will bear the financial risk of Russian crude oil flowing through Ukraine, Prime Minister Viktor Orban's chief of staff said.
The official Gergely Gulyas said Hungary hoped the solution would last until at least the end of the war, without specifying when that could be.
"Although this (oil) transfer will be more expensive and MOL will bear the risk for transportation from the Russia-Ukraine border, there is a legal solution that can provide a long-term solution," Gulyas said.
He said MOL would become the legal owner of the oil at the Ukrainian-Russian border, and bear the risk of it flowing through the country, which has been at war with Russia since February 2022. According to government estimates, this would mean an additional insurance cost of $1.5 per barrel for MOL.
Gulyas said the talks are expected to conclude early autumn without giving a more specific time-frame.
Russian oil-exporter Lukoil was banned by Kyiv in late June from using the "Druzhba" or "Friendship" pipeline that runs through Ukraine's territory, partly supplying Hungary's and also Slovakia's refineries.
The two landlocked countries warned of possible fuel shortages from September unless a solution is found.
Hungary has maintained what it calls pragmatic relations with Moscow since Russia's invasion of Ukraine, creating tensions with some European Union allies keen to take a tougher line and wean themselves off Russian gas.
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