Discussions between Croatia’s oil pipeline operator JANAF and Hungary’s MOL Group have entered a new phase following a closed-door meeting last week in Budapest. Relations between the two companies have reportedly shifted noticeably, with MOL showing readiness for a substantial expansion of oil transport for the first time. The meeting focused on the potential to significantly increase crude oil volumes shipped through JANAF’s pipeline network to MOL’s refineries in Hungary and Slovakia. For the first time, the sides reportedly discussed figures up to 11 million tons per year, a dramatic rise from the roughly 2 million tons currently contracted.
These talks come amid growing concern within MOL about the risks of relying on a single supply corridor. Geopolitical instability, disruptions in global energy markets, and lessons from recent years have highlighted the need for more diversified routes and sources of crude oil. This urgency increased after MOL received only a temporary, one-year exemption from US sanctions on Russian oil. Ongoing EU policy developments, aiming for a full phase-out of Russian fossil fuels by 2028, further strengthen JANAF’s position as a technically proven and geopolitically stable alternative for crude oil supply.
JANAF has long maintained that its system can handle volumes well above current levels, supported by successful maximum capacity tests in the past. While these results were previously questioned by MOL, partly due to the economic advantage of importing discounted Russian oil via the Druzhba pipeline, the evolving regulatory and geopolitical landscape seems to be altering MOL’s calculations.
Regarding pricing, JANAF indicated that its tariff methodology provides for lower unit transport fees at higher volumes. If an agreement is reached, implementation could start as early as February next year. The timing is particularly important for JANAF, as oil transport to its largest customer, Serbian NIS refinery in Pancevo, has been temporarily suspended due to sanctions, increasing the relevance of alternative business opportunities.
