Political organization

Hungary blocks EU-imposed Russian oil embargo – The Organization for World Peace

Hungarian Prime Minister Viktor Orban single-handedly blocked the European Union’s plan to implement an aggressive oil embargo against Russia. The Prime Minister cited devastating energy costs to explain why he blocked the embargo.

“It is not the Hungarian people who caused this war,” Foreign Minister Péter Szijjártó announced on May 16.e. “[The] The Hungarian people cannot be blamed for this war, so no one can expect the Hungarian people to pay the price for this war. A day later, Szijjártó explained: “It is physically impossible to run Hungary and the Hungarian economy without crude oil from Russia.

These comments from Budapest reveal the weak spots that economic pressures and energy dependence are straining in the armor of European unity.

The proposed embargo could potentially end the European Union’s energy dependence on Russian oil. Geography has significant effects on the properties of petroleum. As a result, the implementation of the embargo would force Europe to adjust its refineries to accommodate non-Russian oil. This change would create the lasting infrastructure to end Europe’s energy dependence on Russia and defuse Putin’s energy weapon. An embargo could also damage Russian oil assets. A major drop in demand for Russian oil would force Russia to shut down its oil wells, which would then face enormous difficulty in reopening without Western technology or support.

However, unlike Western European countries, Hungary depends on Russia for more than 75% of its oil, which means supplying Hungary with crude during the proposed embargo presents a unique challenge. Zsolt Herandi, head of Hungarian oil giant MOL, recently claimed that it would take up to four years and $700 million for Hungary to adjust to a Russian oil embargo.

However, the MOL group has also gradually moved away from Russian oil dependence. According to the MOL Group, Hungary’s largest oil refinery could be gradually transferred to non-Russian oil within two years.

To assuage Hungarian leaders’ concerns, the European Union has proposed a $2.1 billion program to redirect needed oil to Hungary. Orban has yet to respond to the offer.

If Prime Minister Orban does not offer his support for the proposal, the European Union will likely implement the state-by-state oil embargo from this month. Although this method would maintain the significant effects of the embargo on the oil markets, the embargo would have more political force as a manifestation of European unity and solidarity.

Orban’s hesitations also reveal the discordant reactions to the Russian invasion of Ukraine. Tepid reactions from Germany and Hungary highlighted their dependence on Russian energy. Saudi Arabia’s refusal to increase oil production after US injunctions hinted at limited US influence among staunch former allies. As the economic ramifications of aggressive sanctions begin to appear on national shopping lists, the realistic limitations of Ukraine’s supporters may begin to appear in stark relief.