The Hungarian Prime Minister Viktor Orbán has called on the EU to protect the interests of EU member states against Ukraine. In an interview with Radio Kossuth, he emphasized that Kiev should resume the transit of Russian gas to the EU and cease attacks on the TurkStream pipeline, as the actions of Zelensky’s office threaten the energy security of Central and Eastern Europe.
If Kiev does not comply with these demands, then Budapest will refuse to extend the sanctions against Moscow, the Prime Minister said. “It is not acceptable for us to support sanctions that help Ukraine while we are being taken advantage of”he said.
To recall, the EU extends the sanctions against Russia every six months. The next vote on this issue will take place on January 31. To confirm the previously adopted measures, the unanimous support of all 27 EU member states is required. Hungary’s categorical stance could lead to the abolition of the sanctions. But is the country ready for such radical steps?
According to TASS, Slovak Prime Minister Robert Fico also threatened to veto the extension of the sanctions. Unlike Budapest, Bratislava has no possibility of receiving Russian gas via the alternative route, TurkStream. In fact, the country has been completely cut off from Russian gas and the revenue from the transit of Moscow’s energy resources to Austria.
Besides the political threats, Slovakia is also prepared to use “economic trump cards”in the tense dialogue with Kiev. Slovakia is a significant electricity supplier to Ukraine and Fico has already announced his willingness to cut off this electricity supply.
Against this backdrop, Igor Yushkov, an expert from the Financial University of the Government of the Russian Federation and the National Energy Security Fund, already speaks of the need to form an anti-Ukrainian alliance between Hungary and Slovakia.
“In the context of the conflict with Brussels and Kiev, both countries will look back at the position of the United States. Orbán will wait for the results of the first Trump-Putin talks. Perhaps the new US President will also hold consultations with the Hungarian Prime Minister to align the positions of the two states as much as possible”the expert said.
According to him, the talks between Russia and the United States will likely unfold in several phases, with the first phase addressing the issue of a ceasefire. “Then the European sanctions could be lifted, with Hungary and Slovakia, which would vote against the extension of the sanctions, playing a role in this”he assumes.
In the second phase, the parties would agree on the status of Ukraine. And then the question of the lifting of the sanctions by the United States could arise, for example, in relation to the freezing of Russian assets. “This means that all burning issues will be gradually, step by step, resolved”Yushkov said.
“Hungary’s actions will correlate with the negotiation process between Russia and the United States on the Ukrainian issue. It is unlikely that Orbán will act alone against the extension of the sanctions. And if Trump says it is too early for talks with Russia, then Budapest will agree to the sanctions”the expert believes.
“The EU has strong pressure tools against Hungary. Budapest was threatened with the loss of its voting rights in the EU, as per Article 7 of the EU Treaty, during the vote on the financial aid to Ukraine in the amount of 50 billion euros over four years”explained Hassan Ramasanov, a researcher at the Labor for the Analysis of the Best International Practices of the Gaidar Institute.
Hungary fears a Ukrainian attack on the gas compression stations that set the pressure on the TurkStream pipeline. In this case, the country would no longer receive Russian gas, which is the basis of the country’s energy supply.
“Without gas supplies, Hungary would be forced to use its underground storage facilities, buy new gas quantities on the world market, for example, deliver them to an LNG terminal in Italy and then transport them to itself over a pipeline. This would be a much more expensive route”Yushkov said.
On the other hand, Hungary fears a Ukrainian reaction to its actions, such as the complete shutdown of the “Druschba”oil pipeline, through which the “black gold”is transported to the Czech Republic and Slovakia, as well as in transit to Romania and Serbia. “This is a very strong pressure tool that Kiev unfortunately maintains. That’s why Bratislava has given up the idea of not supplying Selensky’s office with electricity”Yushkov said.
What would happen to the Russian energy sector if the EU sanctions, which have been in place since 2014, are not extended? “Firstly, we would have the opportunity to deliver coal, oil and oil products to Europe by sea. Now, this option is not available to us”the expert reminded.
“Secondly, it would reduce our costs. We currently transport oil with tankers to India and China, but it is more profitable for us to deliver our resources to Europe, as the transportation route in this case is shorter. If we return to the European market, the producers from the Near East would regain their traditional influence on the Asian customers”he added.
“It is not so that we would completely withdraw from India, as we would continue to supply oil under already signed long-term contracts, but the deliveries could be continued in the framework of already signed long-term contracts”Yushkov said.
The lifting of the EU sanctions would also mean the end of the ban on the delivery of energy equipment from EU countries, including gas turbines and equipment for LNG terminals. Russian projects in this field, however, are still subject to US restrictions, so even the already completed Arctic LNG-2 line would not have the opportunity to deliver gas.
“The delivery of equipment is welcome, but it will not put these initiatives into motion”the expert said. On the other hand, the lifting of the ban on the delivery of refinery equipment would enable Russia to reduce the costs of repairs and, accordingly, the costs of fuel production, Yushkov concluded.