Representative image showing national flag of Ukraine.
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Refineries in Slovakia and Hungary, owned by Hungarian group MOL, face significant credit risk following Ukraine's decision to sanction Russian oil producer Lukoil, Fitch Ratings said on Wednesday.
The sanctions have halted Lukoil deliveries via Ukraine to these markets, and Fitch said the halt "could significantly impact energy supply in Hungary and Slovakia over the medium-term".
Slovakia and Hungary have increased pressure on Kyiv after they said last week they had stopped receiving oil from Lukoil via Ukraine.
Hungary receives 2 million metric tons of oil from the Russian group annually, around a third of its total oil imports, its Foreign Minister Peter Szijjarto has said.
Fitch Ratings, in a non-rating action commentary on its website, said MOL was using around 65-70 per cent Russian crude, as of May.
While other Russian suppliers have continued to ship oil to the countries, Fitch Ratings said it was unclear if additional sanctions could follow.
It said broader and longer-term interruptions to Russian supply could pose a significant risk to operations and energy supply.
"MOL's 'BBB-' rating already reflects the general risk of feedstock supply concentration in its downstream segment, which we expect will contribute around 40-45 per cent of Fitch-defined EBITDA per year over our rating case forecast," Fitch Ratings said.
Fitch says it continued to view the risk of a larger-scale cutoff as an event risk to its ratings.