Russia halts oil supply via pipeline to Hungary, Slovakia, and Czech Republic

Russia's state-owned pipeline company Transneft's Moscow headquarters
[Photo by Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] Russian state-owned pipeline company Transneft announced on the 9th (local time) that oil supplies heading to Europe via Ukraine have been cut off.

According to major foreign media, Transneft confirmed that as of 6:10 a.m. on the 4th, Ukrainian oil transmission company Ukrtransnafta stopped supplying oil to three countries: Hungary, Slovakia, and the Czech Republic.

However, it added that oil transported through a separate pipeline from Russia via Belarus to Poland and Germany is still being supplied. Transneft stated that due to sanctions imposed by the European Union (EU), it has been unable to make payments to Ukrtransnafta.

It also explained, "The Ukrainian side provides services on a full prepayment basis, but the payment was returned," and "We were informed that this is a measure under the EU's 7th sanctions package."

Transneft added that it prepaid on the 22nd of last month, but the amount was returned on the 28th of the same month. The oil supplied by Russia through the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic amounts to about 250,000 barrels per day. Hungarian purchasing companies MOL and PKN Orlen, as well as Ukrtransnafta, reportedly did not respond to requests for comment.

Since Russia's invasion of Ukraine, it has claimed that the turbine for the Nord Stream 1 gas pipeline connected to Germany, which was repaired in Canada, has not been returned due to Western sanctions, reducing gas supply through Nord Stream 1 to 20% of capacity and triggering an energy crisis in Europe.

Recently, the United States has threatened to halt oil exports altogether as it pushes for a price cap on Russian oil to prevent funding Russia's war efforts.

According to the International Energy Agency (IEA), as of May this year, Russia's crude oil production is about 10 million barrels per day, accounting for 10% of the world's total oil demand.