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Hungary plans talks with allies to fight higher oil rates after brand-new US sanctions on Russia

Hungary plans to hold talks with local allies to counter the impact of higher oil prices resulting from a brand-new round of United States sanctions on Russia's oil and gas sector, Hungarian Foreign Minister Peter Szijjarto said on Sunday.

U.S. President Joe Biden's administration enforced its broadest bundle of sanctions up until now targeting Russia's oil and gas incomes on Friday to provide Kyiv and Donald Trump's incoming group utilize to reach a deal for peace in Ukraine.

Oil rates struck a three-month high after the sanctions news broke.

The U.S. Treasury imposed sanctions on Russian business Gazprom Neft and Surgutneftegas that explore, produce and offer oil and 183 vessels that have shipped Russian oil.

This plan of sanctions again raises extreme obstacles for central Europe, Szijjarto stated in a Facebook video.

He stated lower crude oil materials would lift need for refined fuels such as gas and diesel, raising the danger of what he called very severe cost increases in the area.

Hungary imports the majority of its crude oil via the Druzhba pipeline, which carries Russian crude through Belarus and Ukraine to Hungary and also Slovakia. Hungarian energy group MOL did not right away react to emailed concerns.

Szijjarto stated Hungary would start talks with local allies to reduce the hit to rates and the broader economy. He did say who Hungary might talk with.

Greater energy expenses and falls in the forint amid the risk of U.S. tariffs on Europe after Trump's re-election lifted Hungary's commercial producer rate index to its highest in 19 months in November.

The forint is trading near two-year lows versus the euro, raising risks of increased inflation after sharp falls from the European Union's highest levels of more than 25% in the very first quarter of 2023.

Economic experts polled see December inflation increasing to 4.4%, outside the target band of the National Bank of Hungary, which was forced to desert its rate relieving cycle last year amid currency falls and a rebound in rates.

(source: Reuters)