Hungary’s major energy company, MOL, has issued a stark warning to Janaf, the Croatian operator of the Adria pipeline, signaling potential legal action if unimpeded access for unsanctioned Russian oil shipments to Hungary is not immediately guaranteed. This ultimatum emerged following the suspension of crude oil deliveries via the Druzhba pipeline, the primary supply route through Ukraine, since January 27. MOL contends that Janaf has long been aware of Hungary’s reliance on these shipments, especially given the country’s landlocked status and the exemption granted by the European Union for Russian fossil fuel imports to both Hungary and Slovakia.
The Hungarian firm, describing itself as a leading integrated Central Eastern European oil and gas corporation, set a deadline for Janaf to respond, indicating that a refusal would prompt an appeal to the European Commission and a claim for damages. This development unfolds amidst escalating tensions between Hungary and the EU, particularly after Budapest blocked a substantial €90 billion financial aid package for Ukraine, accusing Kyiv of “blackmail” over the Druzhba pipeline. The incident also underscores Hungary’s energy vulnerabilities, with roughly two-thirds of its oil imports traditionally sourced from Russia.
Croatian authorities have adopted a cautious stance in response to MOL’s demands. Economy Minister Ante Šušnjar stated that Croatia would not succumb to pressure but affirmed the country’s commitment to international law. He explicitly noted that international law does not mandate the delivery of Russian oil, emphasizing Croatia’s adherence to partnership policies and existing sanction regimes from both the United States and the European Commission. Šušnjar rejected any notion of blackmail or pressure, asserting that Janaf operates as a “safe and reliable partner” offering competitive pricing, partly due to shorter transport distances for nations like Hungary and Slovakia. He further highlighted that the primary price disparity stems from the significantly lower cost of Russian oil compared to EU supplies, urging Budapest and Bratislava to diversify away from Russian energy.
MOL, however, challenges the economic viability of increased reliance on the Adria pipeline, citing significantly higher logistical costs—several times the average per 100 kilometers compared to the Druzhba pipeline. This disparity, they suggest, raises concerns about potential monopolistic practices. The company also disputes Janaf’s stated annual capacity for the Adria pipeline, alleging that while Croatia claims capacities between 11 and 15 million tonnes, historical data shows no more than 2 million tonnes have ever been transported through that specific pipeline section. In a video statement, Hungarian Prime Minister Viktor Orbán directly blamed Ukraine for the damage to the Druzhba pipeline, accusing it of jeopardizing “secure and affordable energy supply of Hungarian families” and stating a clear preference against higher energy costs.
Despite the escalating rhetoric, a notable step toward resolution was taken when MOL and Janaf agreed to initiate long-term capacity tests on the Adria pipeline. While a specific start date for these tests remains unconfirmed, a MOL representative indicated mutual interest in addressing the long-standing dispute over the pipeline’s operational capacity. Hungary’s total annual oil requirement stands at 5.75 million tonnes, with 87% originating from Russia, while Slovakia imports 4.66 million tonnes, 86% of which comes from Moscow. MOL insists that securing energy supply in Central and Eastern Europe necessitates two fully operational and commercially competitive routes, emphasizing that while the Adria pipeline must rise to the challenge, the operational status of the Druzhba pipeline remains crucial for source diversification.
