Hungary and Slovakia will resist Russian oil phaseout

Significance

Their warnings of an imminent oil supply crunch were shrugged off by Brussels, which reminded the respective governments that they should make progress on reducing dependence on Russian oil supplies.

Impacts

• Limited supply and increased price volatility of petroleum products would dent the region’s manufacturing-based economies.
• Budapest’s windfall taxes are eroding state-owned MOL’s ability to upgrade its refinery infrastructure to process alternative oil varieties.
• MOL will be reluctant to increase oil supplies through the Adria pipeline.