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Hungary and Slovakia search for reserves after Croatia warns against Russian oil requests

On?Tuesday?, a dispute?over oil deliveries to central Europe escalated after Croatia warned against Hungary and Slovakia offering additional Russian supplies.

Since the 1960s, the vast Druzhba Pipeline from Russia to Ukraine has provided a vital lifeline for both countries. However, it has been closed since January 27, 2019.

Ukraine claimed that this was because of a Russian attack against the pipeline. However, Hungary and Slovakia accuse Kyiv intentionally preventing supply.

POLITICAL CLASH

The standoff occurs as Hungarian Prime Minister Viktor Orban is trailing in the polls, ahead of an April 12 election where he could lose power after 16 years.

Orban is a vocal opponent to Ukraine's bid for membership in the European Union. Hungary and Slovakia, on the other hand, have maintained good relations with Russian president Vladimir Putin during almost four years of conflict in Ukraine.

After their request Monday that Croatia help supply seaborne Russian crude oil via the Adria pipe - also called the JANAF pipeline - Ante Susnjar, Economy Minister said this route could import more petroleum but suggested it should not come from?Russia.

"A barrel purchased from Russia might?appear to be cheaper for some countries, but it helps fund wars and attacks against Ukrainian people," Susnjar wrote in a blog post on X.

MOL, the Hungarian oil firm, did not reply to questions sent via email. Slovakia confirmed Tuesday that it had requested Croatia and Hungary jointly to secure Russian oil via the Adria Pipeline.

EMERGENCY RESERVES

Hungary and Slovakia are also in talks about releasing emergency supplies from their own stocks. According to EU law, they must hold 90 days worth of supply.

A spokesperson for the European Commission said that there were no immediate risks to the security of supply. He added that Brussels had also been in touch with Ukraine about the timeline for the repair of the Druzhba Pipeline.

Although there are EU sanctions against seaborne Russian crude oil imports following the war, Hungary and Slovakia have exemptions that would allow them to source Russian crude seaborne if their pipeline supply is disrupted.

After the Ukraine's westward flow was halted, Czech Economy Minister Karel Havilicek said that his country would be able to offer small amounts of oil -to Slovakia via an eastward flow through the Druzhba Pipeline.

US Sanctions

The U.S. does not prohibit European countries from importing Russian oil, but Washington's recent measures against top Russian exporters Rosneft or Lukoil may complicate plans involving them using Croatia's Omisalj port or the 'Adria' pipeline. U.S. sanctions against Serbia's majority Russian refiner NIS, for instance, prevented the operator of the 'pipeline' from delivering crude in late last year.

The U.S. Treasury Department’s Office of Foreign Assets Control issued a temporary license to the refiner allowing it resume operations. Reporting by Kate Abnett and Jan Lopatka; Editing by Inti landauro, Jan Harvey and Jan Harvey.

(source: Reuters)