Potential Impact of 500% US Tariff on Russian Gas and Oil on Hungarian MOL’s Profits
A recent bipartisan US sanctions package proposal has caused concern in Hungary, especially for the country’s oil and gas giant MOL. The proposal includes a 500% tariff on products from countries that import Russian gas, oil, and uranium, with the aim of pressuring Russia to end the war in Ukraine. While Hungary is not the primary target of the tariff, the acceptance of the package could have a significant impact on MOL, as the company relies heavily on processing Russian crude oil and selling products in Western markets, including the USA.
Attila Holoda, a Hungarian energy expert, clarified that the tariff is mainly aimed at India and China, who have become big buyers of Russian energy resources. He explained that if the package is accepted, Hungary may face collateral damage due to MOL’s dependence on Russian oil. The company has not made significant efforts to become independent from Russian oil in recent years, leading to potential challenges if the tariff is enforced.
Holoda also mentioned the possibility of covert companies involved in the process of buying cheap Russian oil and selling higher-value products, potentially complicating the situation for MOL. However, Hungary’s natural gas dependence on Moscow is lower, as the country can buy gas from various sources through interconnectors.
In terms of nuclear energy, Holoda expressed doubts about American involvement in the Paks 2 nuclear power plant expansion project, which is currently led by Russian Rosatom. However, he suggested that the Americans could potentially sell small modular reactors in Hungary as an alternative.
Overall, Holoda emphasized that while a 500% tariff on Russian energy resources could have implications for Hungary, it may not result in an immediate drastic increase in fuel or energy prices in the country. The situation remains uncertain as the proposal progresses through the US legislative process.
