Hungary announced on Tuesday that it will block European Union refunds for countries that supplied munitions to Ukraine until Ukraine allows the transit of Russian oil through a pipeline on its territory. This decision follows Hungary and Slovakia stopping oil imports from Russia’s Lukoil due to a Ukrainian ban on Lukoil oil transit.
The Druzhba pipeline, which means “friendship” in Russian, connects Russia to Eastern Europe and has continued to operate during the conflict. Despite the EU cutting down on most Russian energy sources, Hungary remains heavily reliant on Russian oil, crucial for its refineries.
Hungary’s energy ministry has formed a working group to discuss the security of their oil supply and potential future actions. The ministry emphasized the need for a resolution with Ukraine before considering the payment of €6.5 billion from the European Peace Facility (EPF) as compensation for arms transfers.
Foreign Minister Peter Szijjarto stated that until Ukraine resolves this issue, the compensation fund would remain unpaid. The EPF, established in 2021, reimburses EU countries that send munitions to others. Since Russia invaded Ukraine in 2022, EU members have been able to seek compensation for providing weapons to Ukraine.
Hungary has blocked the release of the next EPF tranche for over a year, citing different reasons. Slovakia and Hungary have requested the European Commission to mediate with Ukraine. If the EU Commission does not act within three days, the issue might be taken to court.
Ukraine’s foreign ministry has not yet responded to these developments, although they confirmed blocking Lukoil’s oil but mentioned that overall oil flows through the pipeline have not decreased.
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