Hungarian Prime Minister Viktor Orbán was delighted to learn last week that Russia and the United States had chosen Hungary as the venue for another summit on ending the war in Ukraine.
Orbán, who identified Hungary, a member of the European Union and NATO, as an ally of Vladimir Putin and Donald Trump, wanted to show the world that “the path to peace runs through Budapest.”
But his hopes were dashed when the Trump administration abruptly shelved plans for a Budapest summit and announced sanctions on Russia’s two biggest oil producers on Wednesday. This is the first time since Trump returned to the White House.
The sanctions are aimed at depleting Russia’s military resources, but they also have the potential to wreak havoc on Hungary’s economy. Since Moscow launched a full-scale invasion of Ukraine in 2022, nearly all EU countries have diversified their energy mix away from Russia, while Hungary’s dependence has deepened. Along with its illiberal Central European neighbor Slovakia, Hungary is almost entirely dependent on Russia for its oil imports.
Prime Minister Orbán is currently considering the dire consequences of his energy policy. In parallel with US oil sanctions, the EU on Thursday confirmed a ban on Russian liquefied natural gas (LNG) imports from 2027. Last month, Prime Minister Orbán told President Trump that without energy imports from Russia, Hungary’s economy would “collapse.”
Against those who criticize Brussels’ bland uniformity, Prime Minister Orbán insists he supports “sovereignty” – Hungary’s right to chart its own course within the EU and forge relationships with hard-line leaders abroad. But President Orbán’s pursuit of sovereignty has thwarted EU efforts to diversify energy supplies, leaving the country at risk of relying on one country for fossil fuels.
The double blow of U.S. oil sanctions and the LNG ban comes as Europe’s longest-serving prime minister, Orban, struggles to contain a burgeoning opposition movement in Hungary, led by former Orban supporter turned archrival Piotr Magyar. Prime Minister Orbán had hoped the Trump-Putin summit would strengthen his support at home, but he now faces a deepening economic crisis that could weaken his power ahead of crucial elections in the spring.
Following Russia’s full-scale invasion of Ukraine in February 2022, EU countries moved to cut energy imports from Russia, cutting off a major source of income for the Kremlin. However, Brussels granted Hungary, Slovakia and the Czech Republic an exemption from the embargo on Russian oil, giving them time to reduce their dependence on Russia.
Rather, Hungary and Slovakia used this exemption to deepen their dependence. Hungary has increased its dependence on Russian oil from 61% before the invasion to 86% in 2024. So far this year, 92% of Hungary’s crude oil imports have come from Russia. Meanwhile, a report by the Center for the Study of Democracy (CSD) and the Center for Energy and Clean Air Research (CREA) says Slovakia is “almost 100% dependent” on supplies from Moscow.
The report said that by May, Hungarian and Slovak oil purchases had sent the Kremlin 5.4 billion euros ($6.3 billion), “equivalent to the purchase of 1,800 Iskander-M missiles that were used to destroy Ukraine’s infrastructure and kill Ukrainian civilians.”
Crude oil imports flow through the Druzhba pipeline, which has been repeatedly attacked by Ukrainian drones this summer as Kyiv aims to punish its neighbor for helping finance Moscow’s war.
The CSD-CREA report said Hungary could diversify its energy supply by receiving non-Russian oil through Croatia’s Adria pipeline rather than Druzhba.
But Orbán shows no signs of changing his policy. He said in an interview with Hungarian state radio on Friday that the government was “working on ways to circumvent” U.S. sanctions, but gave no further details.
Elina Rybakova, a senior fellow at the Peterson Institute for International Economics, a Washington, D.C.-based think tank, said Hungary’s intention to find a way around U.S. sanctions could be the first major test of the Trump administration’s seriousness about imposing sanctions.
U.S. Treasury Secretary Scott Bessent said the decision to impose new sanctions on Russia was due to “President Putin’s refusal to end this senseless war” in Ukraine, and said that despite his tough rhetoric against Russia, Trump has been less aggressive and hopes the sanctions “don’t last long.” The US president also left the door open to a Budapest summit, saying “we will do so in the future.”
Rybakova told CNN that the success of sanctions against Russian oil majors will depend on how they are enforced, including sanctions against Trump allies like Orbán.
“Would we rather have a friendly meeting between Putin and Trump in Hungary, or crush the regime if Hungary tries to circumvent sanctions?” she said. “You never know which way the cards will fall here.”
