European Commission mediates as Ukraine sanctions disrupt oil flow

The European Commission is prepared to support Slovakia and Hungary and, together with Ukraine, seek a solution regarding the Russian oil company Lukoil, which Kyiv has sanctioned, spokesperson Olof Gill said on Tuesday. He assured that oil supplies to the European Union are not at risk.

Budapest and Bratislava approached the European Commission on Monday to initiate consultations with Ukraine regarding the halt of Russian oil supplies to Slovak and Hungarian refineries. This is a consequence of sanctions imposed by Kyiv last week on the Russian oil giant, which led to the disruption of oil transport via the Druzhba (Friendship) pipeline to Slovakia and Hungary.

The EC spokesperson confirmed on Tuesday that Valdis Dombrovskis, the EC Vice President in charge of trade, had received a letter from the foreign ministers of both countries. Gill added that the EC is now analysing the request.

At this moment, there is no direct impact on the security of oil supplies to the EU, announced Gill.

- We are constantly monitoring the situation within the oil coordination group and are in close contact with both Hungarian and Slovak authorities, - the spokesperson informed.

- The EC is ready to support the countries affected by this problem and find a solution together with Ukraine, - he declared.

Gill also addressed the words of Hungarian Foreign Minister Peter Szijjarto, who said in Brussels on Monday that the EC has three days to respond to their request, because otherwise, Hungary will take the matter to court.

- In such procedures, only the EU represented by the EC - and not an individual member state - can take further action and initiate proceedings. At this moment we are analysing the content of the request and the details of what Ukraine has done, and only then will we decide what to do next, - the EC spokesperson informed.

Hungary and Slovakia also requested a meeting of the Trade Policy Committee - an advisory body that reviews trade agreements negotiated by the EC. According to Gill, this will be an opportunity to exchange information before taking further steps.

Lukoil has been subject to sanctions in Ukraine since 2018, though of a limited nature. The restrictions so far included the requirement to withdraw capital, trade limitations, and bans on participation in the privatisation or lease of state property.

However, in June 2024, the National Security and Defence Council of Ukraine (NSDC) significantly expanded them, adding a transit ban through its territory. As a result, Russian oil delivered through the southern branch of the Druzhba (Friendship) pipeline cannot be delivered to Hungary. Notably, these deliveries were exempt from Western sanctions and covered roughly 67% of all supplies to that country.