Russian Oil Shutdown Troubles Putin’s Allies in Heart of Europe

With the world riveted on the war engulfing OPEC’s biggest members, the tankers en route to Croatia are on few people’s radar. But the deliveries to the energy backwater represent a tentative step toward loosening Vladimir Putin’s ties to his remaining European Union allies: Hungary and Slovakia.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — With the world riveted on the war engulfing OPEC’s biggest members, the tankers en route to Croatia are on few people’s radar. But the deliveries to the energy backwater represent a tentative step toward loosening Vladimir Putin’s ties to his remaining European Union allies: Hungary and Slovakia.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.That’s because the ships are carrying oil that didn’t originate in Russia.While the EU exempted pipeline imports from its Russian oil embargo after Moscow attacked Ukraine four years ago, the alternative – albeit a more expensive one – undermines their claims that Urals crude via a Ukrainian pipeline was their only viable option and bolsters Brussels’ efforts to deepen Putin’s isolation.Hungary Prime Minister Viktor Orban and his Slovak ally Robert Fico have used the energy card to block aid to Ukraine, including the latest $90 billion package. Even if Orban loses April elections, Fico will be in office for at least another 18 months. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“The arguments of Orban and Fico just don’t make any sense,” said Karel Hirman, a former Slovak economy minister. “They are jeopardizing their countries’ energy security by insisting on oil supplies from a producer that is waging war against the country that transports that oil.”Oil is just one front in Orban’s hostile relationship with both Ukraine and the EU. Ukraine this week accused Hungary of “hostage-taking” after it detained seven employees of a state-owned bank in Budapest.Politics aside, Hungarian refiner Mol Nyrt. ordered more than seven tankers last month. One from Libya has already landed at the Croat terminal on the island of Krk, and the rest are expected to arrive within days. That has put Mol’s order at over 1 million tons of non-Russian crude for its refineries in Hungary and Slovakia, Gabriel Szabo, chief executive officer of Mol’s Slovak refinery, told Hospodarske Noviny newspaper on Friday.At current prices, that puts the value of orders at about $650 million, according to Bloomberg News calculations. That’s about 60% more than the market price of Russian oil.To be sure, Orban has sought to leverage the wars in Iran and Ukraine in his flagging campaign, calling himself a “safe” option. Polls last month showed him trailing his main rival by as many as 20 points.Croatia’s role as a featured player rests at the intersection of the tensions triggered by the war in Ukraine and Orban’s desperate fight to win re-election after 16 years in power.“Hard to keep up with the excuses coming these days from some Hungarian politicians and energy company managers about why Russian oil ‘must’ flow through the Adriatic Pipeline,” Croat Economy Minister Ante Susnjar said on X. “One day it’s capacity. The next is transit fees. Day three, it’s refinery compatibility. Day four, a sudden conversion – now there’s unexpected faith in the EU, together with dramatic threats.”Their oil flows from Russia stopped on Jan. 27 when a Russian attack damaged the pipeline infrastructure that runs via Ukraine. That forced Hungary and Slovakia to tap into reserves, seek alternative routes they’d shunned and slammed for years. They have since rebuked Ukraine for dragging its feet in fixing the pipeline or allow for an independent evaluation team to visit and report back on the damages.

But President Volodymyr Zelenskiy is defiant, saying on Thursday he’s not keen to fix the pipeline that brings benefits to Russia that’s killing his people.That brought quick reaction from Orban, who said in his regular Friday radio address that his country “will stop everything important to Ukraine from crossing Hungary until we get the Ukrainians’ approval for oil transit.” Brussels has urged Kyiv to restore the flow, saying it’s a condition to unblock aid for Kyiv.The situation may last for weeks if not months and may not change so much even if Orban’s rival Peter Magyar wins power. So far he has been careful to come out with strong comments or policy that would question his nation’s dependence on Russian oil, fearing that would give Orban electoral ammunition. For now his party proposes only a gradual shift from Russian energy, ending it in 2035.In Slovakia, the prime minister’s opponents are ready to reduce dependence on Russia and act in accordance with EU objectives. Those measures include maximum diversification provided by improved relations with Croatia as any cooperation with Russia would only be possible if it is in line with a peace settlement once the war ends, Hirman said.Croatia, which has had troubled relations with Orban for years, said its Janaf pipeline is ready to become the main pipeline to bring oil to Hungary. “It could be a primary pipeline for both Hungary and Slovakia” despite their claims that Janaf was unreliable and should only serve as a complementary source, Croat Prime Minister Andrej Plenkovic said. “I’d like to send a message to the public in those two countries that Janaf can secure their crude supply,” he said. “This is the entire idea behind Janaf’s existence.”—With assistance from Sherry Su, Zoltan Simon, Alberto Nardelli, Ewa Krukowska, Jorge Valero and Michal Kubala.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.