The Ukraine Crisis: Orban's Oil-Ban Stance Frustrates EU

"BRUSSELS -- On the European stage, Hungary's Prime Minister Viktor Orban has become the last barrier to a sweeping embargo against Russian oil, holding up the European Union's biggest attempt so far to sanction Russia on the grounds that it would devastate his small nation's economy.

And yet back home, his country's largest energy firm, MOL, which is partly government-owned, has been quietly accelerating efforts to import oil from other countries. Within as little as two years, the Duna oil refinery, the country's biggest, could be set up to run entirely on non-Russian oil, the MOL Group now says.

The split-screen goes to the heart of what makes Mr. Orban a persistent riddle for European leaders scrambling to corral their countries behind sanctions meant to choke Russia's economy: EU officials aren't sure whether he's bluffing in his threats to veto an embargo that he has said "amounts to an atomic bomb dropped on the Hungarian economy."

Indeed, MOL's moves to accelerate the country's diversification of its crude oil supply away from Russian sources -- efforts that got under way following Russia's sanctions in 2014 -- suggest Mr. Orban is keeping his options open.

EU officials say there may be no resolution to the impasse before a meeting of leaders at the end of May. If they don't agree on an EU-wide oil embargo, individual countries could move forward with their own, although they are reluctant to drop their unity front on Russia.

Mr. Orban has complained for years about sanctions on Russia, saying they hurt his constituents as much as they do Moscow. But he repeatedly has acquiesced to those measures after they gained the support of Germany, his principal economic partner.

This time, in a break from that pragmatic pattern, there are growing concerns among European officials that Mr. Orban appears willing to not just oppose but veto a Russian oil embargo, which would be phased in during the next six months. Doing so would lend relief to Moscow, which faces the specter of a long-lasting reduction in its oil production if it can't easily pipe crude to European buyers, forcing it to close wells that would be difficult to reopen without Western technology and support.

His veto also would expose the strategic limits of the EU, whose rules require all 27 of its governments to sign off on many foreign policy and security policies, including sanctions.

All of it is a source of deep frustration to other governments as Europe's ability to isolate Russia hinges on the cooperation of a prime minister who is separately under fire from Brussels for his moves to cement governmental control over Hungary's media, courts and universities.

"Unfortunately, Viktor Orban is completely missing the big picture here," said Marketa Pekarova Adamova, speaker of the lower house of the Czech Parliament. "It is genuinely quite difficult for some Central European countries, including the Czech Republic, to stop the Russian oil imports. But whereas the Czechs and Slovaks focus on finding alternative sources, without torpedoing the whole sanctions package, we don't see a similar approach on the Hungarian side."

For weeks, Europe's top officials, including EU Commission President Ursula von der Leyen and French President Emmanuel Macron, have called and flown to Budapest, speaking with Mr. Orban to assess how serious his veto threat is and the price it would take for him to drop it. In early May, French and EU officials said they expected a deal to come together within days.

Yet, more than a week later, Mr. Orban's threat to veto the proposal remains. His government says forgoing Russian energy would require a full-scale retooling of the country's energy system at a cost of about $18 billion. Hungarian officials argue that at a time when the bloc is committed to sharply reducing the burning of fossil fuels, new investments in oil or gas infrastructure will never in the long-term pay off.

To assuage those concerns, the EU proposed a 2 billion euros program, equivalent to $2.1 billion, to help bring oil from alternative sources to Hungary, as well as Slovakia and the Czech Republic, which draw in crude from the same pipeline. But Mr. Orban hasn't responded to that offer.

On Monday, he was sworn in for a fifth term as prime minister, after campaigning on a promise to keep Hungary's homes and factories powered by cheap Russian energy. On Thursday, he spoke to an extraordinary session of America's Conservative Political Action Conference, rallying the crowd of Republicans behind a call for each nation to place their own interests first.

"Let our answer be a simple and clear antithesis to the attitude of progressives: Hungary first!" he said.” [1]

Alternative source of oil sounds innocent. Let us think about it. Somebody is already using that source. You can get it only if you pay much more. Also, the suggestion for Mr. Orban to take 2.1 billion dollars to cover his loss of 18 billion dollars sounds like a cruel and stupid joke.

1. The Ukraine Crisis: Orban's Oil-Ban Stance Frustrates EU
Hinshaw, Drew; Norman, Laurence. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 21 May 2022: A.8.