After a June low: Russia is once again sending more oil through Ukraine

After declining in June
Russia is again sending more oil through Ukraine

August 23, 2024, 7:31 pm

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The EU will stop buying Russian oil in 2022 – but exceptions apply to Hungary, Slovakia and the Czech Republic. They get their oil from Russia through the Ukraine through a pipeline that goes to other places. Ukraine recently allowed the system at one point – but Russia offers much more.

Russia doubled its oil exports through Ukraine in July, according to Kiev-based Expro. The volume of Russian oil entering EU countries via Ukraine rose from 540,000 tonnes in June to 1.09 million tonnes in July, the agency said. From August 1 to 19, the traffic volume was more than 600,000 tonnes, the advisory added. Ukrainian officials declined to provide details on oil exports.

Oil supplies will explode as Hungary and Slovakia have long been at odds with Ukraine over supplies of Russian oil from producer Lukoil. Following Russia’s invasion of Ukraine in 2022, the European Union (EU) imposed economic sanctions on Russia and stopped buying Russian oil. Before that, the international community bought about a third of its fuel from Russia.

Three EU members, Hungary, Slovakia and the Czech Republic, were exempted from the import ban because they depend on Russian oil and have few alternatives. Thus, Russia delivered about 300,000 barrels of oil per day to Eastern Europe through the southern part of the Drushba pipeline – corresponding to 0.3 percent of global supply.

sanction against Lukoil

Until recently, private oil company Lukoil supplied half of its oil via the South Durushpa route. Other suppliers include Russian state-owned company Tatneft, Gazprom Neft, Russneft and other smaller producers.

Germany and Poland were also supplied with Russian oil via the northern line of the link. However, both countries stopped their purchases in 2023.

In June 2024, Ukraine imposed sanctions on Lukoil, which did not allow the company to pump oil through Drushpa – but not against other suppliers. According to “Deutsche Welle”. Founded Ukraine The sanction against Lukoil meant that the proceeds would be used to finance the Russian war industry.

EU Commission on behalf of Ukraine

The permit became a contentious issue between Hungary and Slovakia on the one hand and the EU Commission on the other. The former accused Ukraine of violating its association agreement with the EU by restricting Lukoil oil transport – and wrote a letter of complaint to the EU Commission.

However, it took the wind out of the sails of criticism from Hungary and Slovakia. A spokesman in Brussels said preliminary analysis showed there was currently no indication that the sanctions would endanger security of supply in the EU. However, EU Commission Vice-President Valdis Dombrovskis accused the two EU countries of not paying enough attention to finding alternatives to Russian oil supplies, which were imposed after the Russian invasion of Ukraine.

Monthly oil transit volumes through Ukraine are volatile, varying from around 500,000 tonnes in June to 1.2 million tonnes in January. But Ukraine also needs Hungary and Slovakia. Both western neighbors supply fuel and electricity to Kiev, mostly from Russian resources. Hungary’s foreign minister said this week that the country provided 42 percent of Ukraine’s electricity imports in June.