Central Europe's refiners eye impact of U.S. sanctions on Russian oil majors
Slovak refiner Slovnaft, which processes mostly Russian crude and is part of Hungary's MOL group, said it was analyzing the possible impact on its operations of U.S. sanctions on Russian oil majors.
U.S. President Donald Trump imposed sanctions on Russia for the first time in his second term, targeting Lukoil and Rosneft, as he tries to pressure Moscow into agreeing a ceasefire in Ukraine.
The move drove up oil prices and left questions for Hungary and Slovakia, the biggest buyers of Russian oil in the European Union after securing exemptions from EU restrictions.
Potential headache for refineries and banks. Hungarian oil and gas group MOL operates refineries in Hungary and Slovakia reliant on Russian crude, and it last year ran into problems with deliveries when Ukraine - through which the Druzhba pipeline carrying supplies runs - sanctioned Lukoil.
MOL struck deals to take ownership of the affected crude oil volumes at the Belarus-Ukraine border to keep flows coming then. MOL's Slovak unit Slovnaft said: "As this is a new situation, we first need to familiarize ourselves in detail with the exact wording of the new U.S. sanctions and analyze their possible impact on our activities."
Slovnaft processed 4.8 million metric tons of oil in 2024, of which 662,000 tons were non-Russian. MOL processes around 8 million tons in its Danube refinery in Hungary.
"Compliance departments at certain banks will have a lot of headache in weeks to come," Vaclav Bartuska, the Czech Republic's ambassador to Britain and a former energy envoy for the government, said on X. "Expect delays/cuts in deliveries of Russian oil to customers."
According to Iwona Wisniewska, of the Warsaw-based Center for Eastern Studies, around 80% of Russian production is now facing sanctions, making alternative options more difficult.
Refineries have already been making technological changes to handle more non-Russian oil.
"It’s not that losing access to Russian oil would mean the end of business for the Hungarian refinery — but it certainly means a complete change in the operating conditions," Wisniewska said.
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