During discussions on an embargo on Russian oil, European energy ministers discussed the possibility of exempting Hungary and Slovakia in order to achieve the wider goal of consensus. Hungary, however, has said that it would veto any attempts to ban Russian oil.
In fact, on Sunday, Cabinet Minister Gergely Gulyas said, “Since such decisions require unanimity, it makes no sense for the commission to propose sanctions affecting natural gas and crude oil that would restrict Hungarian procurements.” Government spokesperson Zoltan Kovacs said in a Facebook post on Monday that its stance “hasn’t changed, we don’t support it.”
This position has been stressed by Prime Minister Viktor Orbán, who has said energy sanctions on Russia represent a “red line” for him. He has also agreed to pay for Russian gas deliveries in rubles. Minister of Foreign Affairs Péter Szijjártó said after Orbán’s re-election last month that Budapest and Moscow are working on the technical aspects of the bilateral contract. “No one has a say in how we modify our own contract.”
According to European Commission’s Eurostat, Hungary is the largest importer of Russian natural gas among EU countries, importing 110.4% of its domestic natural gas needs from Russia. Last year, Budapest signed a 15-year contract with Gazprom, under which it receives 4.5 billion cubic meters of fuel per year via Gazprom’s Austrian and Serbian lines.
Orbán has also offered vocal support for Putin during the ongoing war, leading to Ukraine deeming him as an “enemy.”
On the other hand, while Slovakia has stood in support of Ukraine, it remains heavily dependent on Russian oil, receiving respectively around 75% of its energy supplies from Russia.
Keeping this in mind, on Tuesday, Slovakia’s Energy Ministry confirmed that the country would seek an exemption from an embargo on Russian oil. Responding to a question by Reuters, the ministry said, “If it comes to an approved embargo of Russian oil as part of a further package of sanctions against Russia, then Slovakia will request an exemption.”
Additionally, it said Slovakia cannot process different types of oil immediately and switching technology would be time-consuming and financially straining. “Therefore we request a longer transition period for oil transported by pipeline,” Bratislava asserted.
Recognising Slovakia’s position and dependence on Russian energy, Ukrainian Foreign Minister Dmytro Kuleba said, “Ukraine will always remember what our Slovak friends did for us. Warm welcome for Ukrainians fleeing the war, humanitarian aid, arms supplies, support for granting Ukraine EU candidate status and allowing tariff-free exports to the EU. We are lucky to have Slovakia as a neighbour.”
Against this backdrop, Brussels on Monday warned of difficult months ahead as the European Union (EU) energy ministers gathered to discuss levying an embargo on Russian oil. EU officials are seeking a coordinated response to Russia, particularly after it cut gas supplies to Poland and Bulgaria last week after their refused to pay for deliveries in rubles.
Before the meeting, the EU’s Energy Commissioner, Kadri Simson, said, “Russia’s demand on payments in rubles is an obvious attempt to divide the European Union. So we must respond in unity and solidarity.”
This echoed previous statements by the bloc, wherein it has slammed Russia’s move as “blackmail” and a violation of gas contracts. At the same time, the European Commission has warned members against complying with Russian President Vladimir Putin’s demands, saying it would violate existing sanctions.
Ahead of the EU presenting its 6th sanctions package, German Economic Minister Habeck spoke to @heutejournal last night.
— German Embassy London (@GermanEmbassy) May 3, 2022
Minister Habeck expects an oil embargo. 🇩🇪 had worked hard to be able to go along with this: "We won’t be the stumbling block". @BMWKpic.twitter.com/CHxB6Gdwsm
The bloc is initiating measures to ensure that it reaches total gas storage capacity by autumn. However, it has currently reached only 32% of this target, which is further complicated by the fact that the bloc imports 26% of its oil and 40% of its gas requirements from Russia. Moreover, Russia has made clear that it stands ready to cut energy to any EU member state.
⚡️ Reuters: EU may offer exemptions from Russian oil embargo for Hungary, Slovakia.
— The Kyiv Independent (@KyivIndependent) May 2, 2022
The European Commission might exempt the two countries considering how deeply they are dependent on Russian crude, Reuters reported, citing two EU officials.
Nevertheless, an embargo on Russian oil could be included in the bloc’s next sanctions package. The European Commission reportedly aims to introduce a tapered ban over six to eight months to allow countries to diversify their energy supply as they reduce their dependence on Russia.
With Germany withdrawing its opposition, the Union’s oil embargo could come into effect within days. The sixth round of sanctions will be discussed by EU ambassadors on Wednesday, when representatives could introduce punitive measures to exclude Sberbank, Russia’s largest bank, from the SWIFT messaging network.
I spoke with @JosepBorrellF on the next round of EU sanctions on Russia which must include an oil embargo. I also emphasized there can be no alternative to granting Ukraine EU candidate status. We paid separate attention to further safe evacuation from besieged Mariupol.
— Dmytro Kuleba (@DmytroKuleba) May 1, 2022
Commenting on the possibility of an oil embargo, German Vice-Chancellor and Minister for Economic Affairs and Climate Action Robert Habeck said, “After two months of work, I can say that Germany is not against an oil ban on Russia,” adding, “Of course, it is a heavy load to bear, but we are ready to do that... We have to prepare the hubs, we have to prepare the pipelines. So, time is helpful, but other countries have bigger problems.”
However, Habeck also acknowledged the challenges posed by countries like Hungary and Slovakia. “I don’t know whether an oil embargo is imminent,” he said on Monday, adding, “I hear different things and talk to my colleagues about different options. Other countries are not that far along and I think you have to respect that.”
The positions of Italy, Austria, Hungary, Slovakia, Spain, and Greece also remain unclear.
Against this backdrop, a senior fellow at Brussels-based think-tank Bruegel, Simone Tagliapietra, warned against an immediate ban on Russian oil. “If we are now moving to sanction Russian oil with a gradual embargo, Russia might respond immediately by saying, okay, then we cut the gas. And giving Russia this strategic game, may not be the best option for the EU. It might be better for the EU to put a tariff immediately on both oil and gas coming from Russia into the European Union,” he stated.