The Hungarian MOL Group announced the conclusion of an agreement with oil suppliers from Russia and pipeline operators to ensure its transportation via the Druzhba pipeline through Belarus and Ukraine to Hungary and Slovakia.

"Following the agreements, MOL Group will take over ownership of the affected volumes of crude oil at the Belarus-Ukraine border, effective from September 9, 2024," the report says.

"The updated transportation agreements and the new takeover arrangements of the crude oil fully comply with all relevant sanctions and provisions, including those of the EU and Ukraine," it reads.

"The new arrangement provides a sustainable solution for crude oil transportation on the Druzhba pipeline. I consider this a great achievement as it allows for MOL to continue with the most efficient and reliable crude processing technology in refineries in Hungary and Slovakia and ultimately contributes to the security of supply in both countries," said Gabriel Szabó, MOL Group Downstream Executive Vice President.

As reported, Ukraine in July tightened sanctions against Russia's LUKOIL, banning the transit of oil that enters Central Europe through the Ukrainian section of the Druzhba pipeline. The company is a major supplier of raw materials to both Hungary (providing about a third of the country's imports) and Slovakia (40-45%).

At the end of August, Budapest announced discussions of a new scheme for receiving oil from LUKOIL through Ukraine, which could be implemented in the coming months, but would lead to increased transportation costs.