A day after scooping up shares in an Azeri gas field, Hungary has said it will not give up Russian natural gas and plans to shore up business deals with Russia in areas that aren't under the sanctions regime.
The move comes as Hungary's pro-Russian prime minister, Viktor Orban, comes under pressure ahead of June 9 European Union elections in which his ruling Fidesz party is facing a tough challenger.
It also follows Hungary's MGM group move to acquire a 5% stake in Azerbaijan's Shah Deniz gas field, with the transaction expected to close in the third-quarter of this year, according to BNE Intellinews. The BP-operated Shah Deniz is one of the world's largest, producing nearly 30 billion cubic meters a year, with Hungary's new deal securing the country 1.5 bcm per year. The acquisition "provides us with protection against significant energy price fluctuations," BNE quoted Hungarian Foreign Affairs and Trade Minister Peter Szijjarto as saying about the deal.
On Thursday, Reuters quoted Szijjarto as saying it was "impossible to ensure Hungary's energy supply without Russian energy resources, and that has nothing to do with politics or ideology but is rooted in plain facts of physics".
According to BNE, since 2021, with the signing of a 15-year supply agreement with Moscow, Hungary has been importing around 4.5 billion cubic meters of Russian gas annually.
Relations between Hungary and the U.S. have continued to sour exponentially since Russia's invasion of Ukraine in the Spring of 2022, with Orban consistently refusing to line up against Russia over Ukraine. Orban's suggestion to Hungarian media late on Wednesday that he was seeking to expand non-oil business ties with Russia have also ruffled Washington's feathers.
"Hungary's government says it is the 'party of peace' while continuing to stand with Putin's party of war. Hungary's addiction to Russian energy is dangerous and unnecessary," U.S. Ambassador to Hungary David Pressman said on Facebook, as reported by Reuters.
Earlier this week, S&P Global reported that the EU was gearing up to put the finishing touches on its 14th sanctions package on Russian energy this month, with sanctions targets to include shipments of Russian LNG.
The sanctions package adds three Russian LNG projects to the blacklist, including Arctic LNG 2, Ust-Luga and Murmansk. The EU's 14th sanctions package is far from a done deal, however, with all EU member states required to be on board with the deal, and some clear outliers waiting in the sidelines to scupper the package.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com More
U.S. Gasoline Prices Post Super Rare Double-Digit Weekly Drop
Oil Prices Fall After API Reports Large Surprise Builds in Crude And Products
Oil Price Plunge Hits BP and Shell Shares
Washington Looking to Revive More Shuttered Nuclear Plants
Rongsheng Becomes Next Chinese Refiner to Buy Trans Mountain Oil