The bad signs had appeared a few days before, when the “leader” of Hungary, Viktor Orban, was about to drown on a recreational lake in the US. He was saved by a journalist who was following him from the shadows.
The dizziness that struck Viktor Orban in the US is related to the uncertain fate of the largest company in Hungary, the Mol group.
Given as an example for the “science” of making a profit, Mol is now showing its weaknesses. Although it is cataloged by some as one of the most important oil companies in the region, in fact Mol has always lived through the advantageous, sometimes dubious businesses of the Viktor Orban regime. Mol is supplied with Russian oil through the southern branch of the Russian oil pipeline that crosses Ukraine.
Today the news appeared that Russian oil is no longer transited through Ukraine and, as a result, Mol no longer has oil to refine. Only from strategic reserves.
According to Bloomberg, as of August 4, oil has stopped reaching Hungary, the Czech Republic and Slovakia through the Southern Druzhba (Friendship) pipeline. Reliable information shows that the Russian company Transneft justified the stoppage of the transport by saying that it cannot pay the transit fee to the company UkrTransNafta, which owns the Ukrainian section of the pipeline. This happened because Russian banks are also subject to sanctions, so the transfer failed, according to the Russians. The Russian company promises to constantly look for a solution.
On average, 250,000 barrels of crude oil are shipped from Russia per day through the southern part of the Druzhba pipeline to Hungary, Slovakia and the Czech Republic.
Mol from Hungary and Unipetrol, controlled by PKN Orlen, are the main buyers of oil on the southern route.
Gaál Gellért, senior energy analyst, quoted by the Budapest press, said that “since August, Mol capacity has been operating at a low level due to the closure of the Száchahalombatta refinery – at around fifty percent. But Mol has built up commercial stocks and can ensure supply in terms of capacity on the Adriatic pipeline. The Adria pipeline can fully supply the Száhalombatta refinery.
Another Hungarian expert shows that without Russian oil, the supply is very difficult to implement. The Hungarian refinery is currently partially closed for maintenance. The amount lost in this way further increases the supply problems
The price of Mol shares started to fall on the Budapest Stock Exchange after the news of the stoppage of Russian crude oil deliveries. On Tuesday afternoon, shortly after 3:00 a.m., the oil company’s shares were down nearly five percent.
Latest news shows that the Hungarians would like to pay the transit tax to the Ukrainians, instead of the Russians. It’s just that the relations between the two countries are not friendly at all.
Mol offered to transfer the money instead of the Russians, but no agreement has yet been reached. As the company says, Mol “initiated negotiations regarding the assumption of the commission obligation”.
Mol processes only Russian oil at its Bratislava refinery, while 70% of its Száchahalombatta refinery uses oil from the Barátság pipeline. Since the beginning of August, work in the latter has been stopped due to maintenance, so Russian oil would no longer be processed here even if it arrived.
In the long term, Mol can also deliver oil to its Száhahalombatta refinery via the Adriatic pipeline off the coast of Croatia, but it would no longer be cheap compared to the Russian pipeline. The fuel price of HUF 480 in Hungary was made possible by Russian oil, which is cheaper than the European price.