New US sanctions on Russia: Hungary plans talks with allies to combat higher oil prices

BUDAPEST: Hungary plans to hold talks with regional allies to counter the impact of higher oil prices resulting from a new round of US sanctions on Russia’s oil and gas sector, Hungarian Foreign Minister Peter Szijjarto said on Sunday.

US President Joe Biden’s administration imposed its broadest package of sanctions so far targeting Russia’s oil and gas revenues on Friday to give Kyiv and Donald Trump’s incoming team leverage to reach a deal for peace in Ukraine.

Oil prices hit a three-month high after the sanctions news broke.

The US Treasury imposed sanctions on Russian companies Gazprom Neft and Surgutneftegas that explore, produce and sell oil and 183 vessels that have shipped Russian oil.

“This package of sanctions again raises severe challenges for central Europe,” Szijjarto said in a Facebook video.

He said lower crude oil supplies would lift demand for refined fuels such as petrol and diesel, raising the risk of what he called “very serious” price increases in the region.

Hungary imports most of its crude oil via the Druzhba pipeline, which transports Russian crude through Belarus and Ukraine to Hungary and also Slovakia. Hungarian energy group MOL did not immediately respond to emailed questions.

Szijjarto said Hungary would start talks with regional allies to mitigate the hit to prices and the wider economy. He did say who Hungary might talk to.

Higher energy costs and falls in the forint amid the threat of US tariffs on Europe after Trump’s re-election lifted Hungary’s industrial producer price index to its highest in 19 months in November. The forint is trading near two-year lows versus the euro, raising risks of increased inflation after sharp falls from the European Union’s highest levels of more than 25% in the first quarter of 2023.