Hungary Objects to Proposed EU Sanctions on Lukoil Dubai Unit

(Bloomberg) -- Hungary raised objections to a European Union proposal to sanction Litasco Middle East DMCC, a Dubai-based trading unit of Russian oil giant Lukoil PJSC, according to people familiar with the matter.

EU envoys started debating this week the bloc’s plans for a new package of sanctions on Russia over its full-scale invasion of Ukraine. Budapest cited energy security concerns for its reservations, said the people, who spoke on condition of anonymity to discuss private deliberations. Negotiations will continue next week. 

Lukoil was the second-largest seller of Russian supplies to foreign markets last year, and this would be the first time the company’s trading arm is targeted by the coalition of countries sanctioning Russia. Litasco had been rebuilding its presence in global oil markets over recent months.

Hungary is also one of a handful of European nations that is still allowed to import Russian oil domestically. 

In addition to the Litasco unit, the EU is also proposing to designate a top-five Russian insurer and Surgutneftegas PJSC, a company sanctioned by the Biden administration before leaving office earlier this year, Bloomberg previously reported.

The measures would hit a total of 60 individuals and entities as well as some 150 vessels, which would bring the number of EU-sanctioned ships to about 300. There are also proposals targeting Russian disinformation and hacking operations, as well as entities providing Russia with support for its military and drone manufacturing operations. 

The EU is aiming to approve the package of measures, which requires the backing of all member states, later this month.

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