The EU’s recent ban on Russian oil is off to an unpromising start
The Druzhba pipeline supplies refineries in the Czech Republic, Germany, Hungary, Poland and Slovakia. Germany and Poland, the two biggest recipients, have agreed to turn off the taps by the end of the year. The embargo will then cover about 90% of Russian oil. It is unclear when the remainder will be cut off. The other recipients, all landlocked countries, say it would be costly and difficult to switch to other sources of crude.
Germany, the pipeline’s main beneficiary, is the only one of these countries to have reduced imports since the outbreak of war in Ukraine. In January it received half of the Druzhba oil; by April, just a third. Hungary and Poland—despite its pledge to wind down Russian imports—have gone in the other direction. There is little financial incentive for refiners to ditch Russian supply. Urals crude is trading considerably below Brent, the international benchmark.
That means governments will drag their heels. The Czech Republic and Slovakia say they back an eventual ban on imports through Druzhba, but want a two- to three-year adjustment period. Hungary is an even bigger obstacle.Group, a Hungarian oil and gas company, had previously said it could replace Russian oil by leaning on a pipeline from Croatia. It now says it will take four years to build the necessary infrastructure.
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