Russian crude oil exports to the CEE continue - an update on Ukraine sanctioning Lukoil

HUNGARY - In Brief 28 Jul 2024 by Istvan Racz

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A lot of things have been said on this already, but much of the related news has been partially or fully inaccurate, or even outright disinformation in some cases. Most importantly, Ukraine's most recently introduced sanction stopping Lukoil crude oil shipments to Central Europe via the Druzhba 2 pipeline has not cut Hungary and Slovakia (and Czechia, for that matter) off Russian oil, despite frequent claims of that sort. Shipments by Rosneft and Tatneft, also Russian companies of course, are not affected by the Ukrainian measure. Lukoil represents about half of Hungary's crude oil imports from Russia (2 bn metric tons per year), which is one-third of the country's total crude imports and 27% of total domestic use, as 15% of the latter is satisfied by domestic production. Slovakia's exposure to Russia is even higher, with annual crude imports of about 5.4-5.5bn tons from there, and about 40-45% of its total imports (and of domestic use, as the country has no significant own production of crude oil), representing 2.5-2.6 bn tons, is expected from shipments by Lukoil. Czechia, also a major buyer of crude oil from Russia, through the Druzhba 2 pipeline, has reduced its Russian imports to 40% of domestic use recently, but it does not buy oil from Lukoil, and so it is not affected by the Ukrainian sanction for the time being. For more clarity, here is a table on the foregoing - but please, be aware that some of the figures in it represent rough estimates, and so they cannot be taken as 100% accurate compilation of statistics: The obvious conclusion from this data is that the impact of the new sanctions by Ukraine is very partial but far from insignificant: Lukoil shipments ...