EU May Offer Hungary and Slovakia Exemptions from Russian Oil Sanction

Foreign media reported on May 2 that the EU might consider giving exemptions to Hungary and Slovakia from any embargo of Russian oil, considering their heavy reliance on it, according to two EU officials. The EU is currently planning for a full embargo of Russian oil by the end of 2022.

The report also pointed out that apart from the exemption, the EU is also considering a “long transition period” for the two countries. According to data from the International Energy Agency (IEA), Hungary and Slovakia imported 96% and 58% crude and refined oils from Russia respectively last year. Hungary has repeatedly said it would not sign up to sanctions involving energy.

It should be noted that Hungarian Foreign Minister Peter Szijjarto said during a press conference that Budapest is ready to pay Rubles for Russian oil and is not against the EU sanction to purchase oil in the seller’s currency. He also mentioned the deal signed in September 2021 between a subsidiary of the Hungarian energy company MVM and Russia’s Gazprom Export includes options of payment with non-Euro currencies.

It is reported that Hungary has set up an account of payment in euros in GazpromBank. CEE Energy, the subsidiary of MVM pays in Euro, which can be converted to Ruble and then transferred to Gazprom to complete the transaction. Szijjarto thinks that such a deal can ensure oil supply to Hungary without violating the EU’s embargo.

Moreover, Gergely Gulyas, the current chief of staff of the Prime Minister’s Office in Hungary, told the media on Monday that there are 9 other European countries in addition to Hungary who accept Russian President Vladimir Putin’s order of oil settlement in ruble. They have all opened bank accounts in GazpromBank in order to pay for Russian gas. But the leaders of these countries are afraid to admit it publicly.