The decision by Belarus to slap a USD 45-per-metric-tonne import duty on oil that Russia ships to Europe could easily affect Hungary, according to industry experts in Moscow. They say that Russia could pass on some of the cost of the new duty on to Mol, raising the price of the oil delivered through the pipeline by as much as 13%. However, Mol told that it has long-term contracts for oil delivery from Russia which place the onus of paying for all delivery costs until the border on the exporter and thus expect no negative affect neither on the stability of supply nor prices.
Our view: Though we think that long term contracts for delivery should protect MOL from potential price hikes, we consider this to be as a serious threat. If Russian companies are determined to pass on the prices, the legal ways could be found to deviate from LT contracts. We expect neutral to slightly negative market reaction.