Hungary's MOL says oil flows via Druzhba pipeline to resume shortly

The suspension of pipeline flows has hit countries including Hungary, Slovakia and the Czech Republic, which have limited ability to import alternative supplies by sea.

Oil flows to central Europe via the Druzhba pipeline can resume within days as Hungarian energy group MOL has transferred the transit fee for the use of the Ukrainian section of the pipeline, MOL said on Wednesday.

Ukraine has suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from accepting transit fees from Moscow, Russian pipeline monopoly Transneft said on Tuesday. The suspension drove up oil prices, which have already surged along with other forms of energy, as Russia's invasion of Ukraine has raised concerns of shortages, especially in Europe, which is heavily reliant on Russian fuel.

Hungary, which has criticized European Union sanctions against Moscow, had said on Tuesday that it was working on a solution. "By assuming the fee, MOL could provide a swift solution to the issue: the Ukrainian party has pledged to resume the transport of crude oil within a matter of days, which had been halted a few days ago due to technical issues emerging on the banking front," MOL said in a statement.

Hungary's forint, central Europe's worst-performing currency, firmed to 398.45 versus the euro from over one-week lows at 401.35 per euro after the announcement, while MOL shares rose 3.4%. The suspension of pipeline flows has hit countries including Hungary, Slovakia, and the Czech Republic, which have limited ability to import alternative supplies by sea.