Friday, January 27, 2023

HomeOil & GasHungarian FM: EU price cap on Russian oil will not apply to...
Powered by

Hungarian FM: EU price cap on Russian oil will not apply to pipeline shipments

Hungary also gave the green light to the European Union’s new sanction package which includes a series of measures to reinforce pressure on Russia’s economy following the recent escalation of the war in Ukraine.

“Hungary has achieved that the price cap for Russian oil will not apply to pipeline shipments and ensured that nuclear energy was exempt from the sanctions imposed on Russia,” commented Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó the 8th round of sanctions against Moscow, adopted by the European Union last week.

The package introduces into the EU legislation the basis to put in place a price cap related to the maritime transport of Russian oil for third countries and further restrictions on the maritime transport of crude oil and petroleum products to third countries.

More specifically, it will be prohibited to provide maritime transport and provide technical assistance, brokering services or financing or financial assistance, related to the maritime transport to third countries of crude oil (as of December 2022) or petroleum products (as of February 2023) which originate in or are exported from Russia.

The Hungarian minister said after the agreement on the bloc’s new round of Russia sanctions that Hungary achieved that the EU oil price caps do not pertain to pipeline deliveries and maritime deliveries are also exempt when they replace pipelines in an emergency.

Earlier this year, the European Union has already agreed to introduce an embargo that prohibits member states to buy Russian crude oil starting on 5 December, with Hungary, the Czech Republic and Slovakia receiving temporary exemptions. So far, shipping was spared from the restrictions as some member states with large shipping industries opposed the agreement.

The minister underlined that Hungary also ensured that nuclear energy was not included in the new EU sanctions so the new measures will not hinder the construction of the new reactors of the Paks nuclear power plant. Hungary aims to expand its Paks nuclear power plant with two Russian-made VVER reactors, with a capacity of 1.2 gigawatts (GW) each to supplement its four existing reactors, which run on Russian fuel and supply around half the country’s electricity.

Nuclear cooperation was not included in the European Commission’s proposal for the eights sanction package against Russia. Although five EU countries – Poland, Ireland, Estonia, Latvia and Lithuania – suggested a ban on cooperation with any nuclear activities with Russia, the European Commission eventually left it out of its formal proposal.

The final version of details of the draft of the new measure, including the oil price cap, is expected to be signed off this week.

Sign up to our biweekly newsletter

    Most Popular