The Czech Republic spent 5 times more on oil and gas from the Russian Federation than on aid to Ukraine, – Politico

Czech industry benefits from a loophole in Russian oil sanctions.

The Czech Republic, one of Ukraine’s closest allies, has allowed its refineries to earn more than a billion euros in excess profits thanks to discounts on purchases of Russian oil and gas. Politico writes about this , citing a report by the Center for the Study of Democracy and the Center for Energy and Clean Air Research.

“The Czech Republic spent more than 7 billion euros on Russian oil and gas – more than five times more than the 1.29 billion euros it gave in aid to Ukraine,” the report said.

Thus, according to the report, one of the companies – Orlen Unipetrol, by buying Russian fuel, which was on average 21 percent cheaper than alternative Azerbaijani oil in 2023, was able to obtain an excess profit of about 1.2 billion euros.

This situation is possible because the EU granted the Czech Republic an exemption from the ban on the supply of Russian oil after Russia’s invasion of Ukraine. The exception was designed to give landlocked Central European countries such as Hungary, Slovakia and the Czech Republic extra time to find new fuel routes.

However, according to analysts, the Czech Republic’s dependence on Russian oil has actually increased to about 60 percent in 2023, despite the government’s intentions to gradually abandon purchases from Moscow. Although that figure has since fallen to a pre-invasion level of 50 percent earlier this year, they say there is more than enough spare capacity in the market for Prague to completely end its dependence on Russia.

For example, the Czech Republic could take advantage of the free capacity of the Transalpine Pipeline, through which oil comes from the Italian port of Trieste, the Adria pipeline, which connects to the Druzhba oil pipeline in Slovakia, and by increasing the import of petroleum products.

Oil sanctions against Russia

As the FT wrote, Russia has increased the capacity of its shadow fleet of oil tankers by almost 70% compared to last year, despite sanctions against insurers and shipping companies. According to the Kyiv School of Economics, the volume of Russian oil transported by the shadow fleet increased from 2.4 million barrels per day in June 2023 to 4.1 million in June 2024.

Oil supplies from Russia were also reported to have risen to a three-month high after refineries completed seasonal maintenance.

(c)UNIAN 2024