Why Brussels is cautious of backing Hungary in struggle for Russian oil | Invesloan.com

Good morning. Today, our trade and energy team report on Brussels’s hesitation in coming to Hungary and Slovakia’s aid in their face-off with Kyiv over Russian oil supplies, and our Athens correspondent reports on the deadly heatwave sweeping across Greece.

Oil slick

Attempts by Hungary and Slovakia to enlist the EU in their latest dispute with Ukraine failed yesterday. The European Commission has stalled their request to urge Kyiv to drop recent sanctions on Russian oil company Lukoil, write Andy Bounds and Alice Hancock. 

Context: Hungary and Slovakia were granted exemptions to an EU-wide ban on Russian oil imports following Moscow’s full-scale invasion of Ukraine. But Kyiv’s recent decision to stop the transit of Lukoil products from Russia through the Druzhba pipeline could reduce supplies, the two countries say.

The pair wrote to the European Commission, which handles EU trade policy, asking it to open consultations under its trade deal with Ukraine.

But Valdis Dombrovskis, EU trade commissioner, told the Financial Times Brussels would need more time to gather evidence and assess the legal situation.

At a meeting of trade officials from member states yesterday, 11 countries intervened to support his view, and none took the side of Budapest and Bratislava, three diplomats told the FT.

One said the Ukraine trade agreement included a security clause that might allow the disruption of supplies.

The timing of the plea is particularly ironic, given Hungarian Prime Minister Viktor Orbán has deeply irritated most of his EU partners and the commission in recent weeks by unilaterally lobbying for a Ukraine peace plan in visits to Russia and China, without the endorsement of Brussels.

Kyiv insists the same amount of oil is flowing through the pipeline as before, thanks to other Russian companies.

Russian oil makes up 35-40 per cent of inputs at Slovakia’s only refinery. Products made from that oil are also exported to Ukraine itself and many countries in central Europe, under another exemption granted until December 5.

If Slovakia is unable to import from Russia “the impact would be huge”, an EU diplomat said.

Slovak President Peter Pellegrini said he would be “forced to react” if Ukraine did not shift its stance on Lukoil. Pellegrini added that Slovakia was helping Ukraine with gas reserves and electricity supplies. 

Spokespeople for Hungary declined to comment. Lukoil supplies which pass through Ukraine account for around 25-30 per cent of the country’s oil imports.

Chart du jour: Rebound

Turkey’s central bank has handed $5bn back to Saudi Arabia, in a morale-boosting symbol of Ankara’s progress in replenishing its foreign currency stores after embracing more conventional economic policies.

Scorcher

Those who ventured to Greece this summer in search of an escape from northern Europe’s grim weather were met with an unprecedented — and deadly — heatwave, writes Eleni Varvitsioti.

Context: June was the hottest month on record in Athens, according to the EU’s observation service Copernicus, with temperatures consistently soaring to 40C and above in the capital and much of the country.

Due to the extreme temperatures, six tourists died from heat-related incidents last month, including British BBC presenter Michael Mosley, who was found dead near a popular beach on the island of Symi after going missing on a solo hike. Two French women also died after hiking in the heat on the island of Sikinos.

Temperatures are set to continue breaking records this month. “According to the data, we will probably go through 16-17 days of heatwave, which has never happened before in our country,” Kostas Lagouvardos of Greece’s National Observatory told ERT national television this week.

But visitors have continued coming undeterred.

To avoid further incidents, Greece’s culture ministry has decided to close the Acropolis from midday to 5pm on very hot days. Many businesses have followed suit, shutting for hours to safeguard employees from performing strenuous outdoor duties during peak heat hours.

Key sectors of the economy, including construction, food deliveries and courier services, as well as shipbuilding, halted work for the same period.

“Temperatures that were considered extreme in the past are normal today,” said Andreas Matzarakis, professor of environmental meteorology at Germany’s Freiburg University. He said heatwaves had become longer, more frequent, and significantly more intense in Greece.

Greece is, of course, not the only country affected by rising temperatures. According to Matzarakis, over 50 per cent of the world’s population is currently exposed to extreme heat, a figure expected to rise to 80 per cent within the next two decades.

What to watch today

1. Italian Prime Minister Giorgia Meloni hosts Israeli President Isaac Herzog in Rome.

2. G20 finance ministers meeting in Brazil.

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