Hungary and Serbia to build pipeline to transport Russian oil

Hungary and Serbia have agreed to build a pipeline to supply Serbia with Russia’s crude oil as European Union sanctions limit supplies via Croatia, the Hungarian government has announced.

Currently, Serbia receives its oil from Russia through the JANAF oil pipeline through Croatia. But last week, the EU placed an oil price cap for Russian seaborne crude deliveries to third countries as part of sanctions imposed due to Moscow’s war against Ukraine.

“The new oil pipeline would enable Serbia to be supplied with cheaper Urals crude oil, connecting to the Friendship oil pipeline,” Hungarian government spokesman Zoltan Kovacs tweeted on Monday.

He said Serbia’s oil supply was largely via a pipeline through Croatia, “but this is unlikely to be possible in the future because of the sanctions that have been adopted”.

1/2 @avucic and PM Orbán have agreed to build an oil pipeline to Hungary. The new oil pipeline would enable Serbia to be supplied with cheaper Urals crude oil, connecting to the Friendship oil pipeline.

— Zoltan Kovacs (@zoltanspox) October 10, 2022

Hungary has been critical of EU sanctions against Russia. Prime Minister Viktor Orban has said the sanctions have “failed as governments in Europe are collapsing ‘like dominoes'”.

In June, Hungary held up the finalisation of an EU sanctions package against Russia, objecting to sanctions on Patriarch Kirill.

The country relies heavily on Russian oil and gas, and it says the measures drove up energy prices and caused a European energy crisis. But Budapest backed last week’s sanctions package.

The EU and the United States are now questioning Serbia’s proclaimed commitment to join the 27-nation bloc after it signed an agreement with Russia pledging long-term “consultations” on foreign policy matters.

The southern branch of the Druzhba, or Friendship pipeline, runs via Ukraine to Hungary, Slovakia and the Czech Republic. It has been the primary source of supply for the three countries’ refineries for years.

Serbia’s sole oil company is NIS, in which Russian Gazprom Neft and Gazprom together hold a majority stake.

This month, Hungary also said it would help out Serbia with its gas supplies if needed.

Hungary has gas reserves for about five to six months of consumption, Orban said.