EU Should Avoid Russian Energy Sanctions, Hungary Minister Says

(Bloomberg) --

Hungary reiterated its opposition to the European Union extending sanctions on Russia to energy, with a senior official warning that such a move would hurt member states more than Moscow.

The EU is set to propose a ban on Russian oil by the end of the year over its war in Ukraine, with restrictions on imports introduced gradually until then, Bloomberg reported, citing people familiar with the matter. Hungary has been among the most vocal in opposing the expansion of sanctions to Russian oil and gas.

It's important for the bloc to “not accept sanctions that make it impossible to import Russian crude oil or natural gas,” Hungarian Cabinet Minister Gergely Gulyas told state radio on Sunday. Gulyas didn't say whether Hungary would try to veto such a move, which newly re-elected Prime Minister Viktor Orban has called his “red line.”

“An embargo would mean that we'd have to procure these products from elsewhere and for significantly more, which would mean that we couldn't guarantee maintaining utility-price subsidies nor heating nor the functioning of the economy,” Gulyas said. “These are enough reasons for everyone to Europe to come their senses.”

Hungary is among countries that have agreed with Russia to allow the conversion of their gas payments to rubles, testing the EU's sanctions policy. Russia on Wednesday cut off gas supplies to Poland and Bulgaria, making good on a threat to stop flows if payments aren't made in rubles.

Read More: Europe's Fragile Energy Market Braces for Putin's Next Move

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