Hungary Blocks EU Refunds Over Oil Transit Dispute with Ukraine

Hungary has announced it will obstruct European Union refunds for member states that supplied munitions to Ukraine until Kyiv permits the transit of oil from Russia’s Lukoil through its territory. This declaration was made by Hungarian Foreign Minister Péter Szijjártó on July 23, following Slovakia and Hungary's cessation of oil imports from Lukoil via the Druzhba pipeline, a decision prompted by Ukraine's recent ban on Lukoil's transit. In response to the ongoing situation, Hungary's energy ministry convened a working group to assess the security of oil supply and discuss potential next steps. Szijjártó emphasized that without a resolution from Ukraine regarding the oil transit issue, the payment of €6.5 billion from the European Peace Facility (EPF) for arms transfers would be stalled. Ukraine's foreign ministry has yet to comment on the matter, although Kyiv maintains that while it has blocked Lukoil oil, overall flows through the pipeline remain unaffected. The Druzhba pipeline, which connects Russia to Eastern European nations, has continued to operate despite the ongoing conflict, as the EU has largely reduced its reliance on Russian energy. Hungary, heavily dependent on Russian oil, has expressed concerns about its ability to supply refineries without it. In a bid to resolve the issue, Hungary and Slovakia have requested the European Commission to mediate discussions with Ukraine, which could lead to legal action if no resolution is reached within three days.