Mol Floats Shift Away From Russian Oil Before Orban Meets Trump

o[gmvzi9ubrft[}ntrh]iyq]_media_dl_1.png Eurostat, Bloomberg

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(Bloomberg) — Hungary’s sole refiner said it can procure most of its crude from non-Russian sources, marking a shift in tone ahead of a high-stakes meeting between US President Donald Trump and Prime Minister Viktor Orban on Russian oil sanctions.

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Mol Nyrt., which operates refineries in Hungary and Slovakia, said a pipeline from Croatia can in fact be an alternative for about 80% of its supplies should Russian flows through the Druzhba connection via Ukraine stop.

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The statement came hours before a meeting between Orban and Trump at the White House on Friday, where the Hungarian leader is seeking to win an exemption from US sanctions on Russian oil, Bloomberg reported earlier.

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“Should the crude flows via the Druzhba pipeline drop significantly, Mol can increase its utilization of the Adriatic pipeline and supply ca. 80% of its landlocked refineries’ intake, although entailing higher technical risks and logistics costs,” Mol said in its earnings report published on Friday.

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The statement marks a pivot from months-long messaging from Orban and Mol that the landlocked nation had no alternative to Moscow for energy. Hungary has ramped up purchases of Russian energy since Moscow’s 2022 invasion of Ukraine — to the point where it gets around 90% of its crude imports from Moscow. 

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The country secured temporary relief from European Union sanctions and has been taking advantage of lower prices for Russian fuel, helping Mol to wider refining margins that boosted earnings in the third quarter.

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Failure to clinch a reprieve would mean “hard times” for Hungarians, Orban told public media en route to Washington on Thursday. 

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With the EU planning to phase out all Russian energy imports after 2027, Mol will need to wean itself off Russian oil. The question is how much time it will have to do so as a result of the US sanctions. Mol said it’s “cautiously progressing” with the upgrade of its refineries in Hungary and Slovakia to boost processing capacities of non-Russian crude. 

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“Mol’s future hinges on primarily the phase-out of Russian crude oil,” Tamas Pletser, an Erste Bank analyst, wrote in a note to clients. “Orban meets with Trump in Washington, which will be a crucial meeting in this regard.”

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Until now, the Orban administration and Mol have consistently played down the potential role of the Adriatic pipeline for crude supply, arguing that Hungary’s landlocked status made Russian the only effective source. There’s also been an ongoing dispute about the capacity of the Croatian pipeline.

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That’s not the only headache for Mol and its Chairman and Chief Zsolt Hernadi, who accompanied Orban to Washington D.C. as part of a business delegation.

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Damage caused by a major fire at Mol’s Hungarian refinery last month will lower output by as much as 300,000 tons a month until repairs are completed, Mol said in its first damage assessment. It now forecasts 11.5 million tons of refining at the group level this year, down from 12 million tons.

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—With assistance from Rachel Graham.

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