Hungarian Prime Minister Viktor Orban concluded a visit to Washington, D.C., during which he received commendation and secured a one-year exemption from U.S. sanctions on Russian oil, gas, and nuclear supplies. This occurred five months before a scheduled election in Hungary.
Key Outcomes
Despite the exemption, the U.S. side negotiated a trade agreement described as stringent for Hungary. Additionally, no progress was reported on the issue of ending the conflict in Ukraine, which affects Hungary.
Sanctions Exemption Context
The one-year exemption from U.S. sanctions is noteworthy given Hungary's upcoming April election. This timeframe partially coincides with the European Commission's objective for all member states to cease importing Russian oil, gas, and nuclear fuel by the end of 2027.
From an EU perspective, a political commitment from Orban to meet this 2027 deadline has not been made, unlike the Czech government's stated commitment. The European Union is currently pursuing stricter energy sanctions, a move opposed by Hungary and Slovakia.
Energy Infrastructure Developments
Hungary's energy company MOL has been upgrading its refineries at Százhalombatta in Hungary and Slovnaft in Bratislava to process Brent crude, an alternative to the high-sulphur Urals crude supplied via Russian pipelines. MOL stated on Friday that 80% of Hungary's oil requirements could be met by importing crude through the Adria pipeline from Croatia, though this would involve increased logistical costs and technical risks.
This development suggests that Hungary, despite being landlocked, may possess alternative routes for oil supply beyond Russian sources.
Financial Implications
Between February 2022, following Russia's full-scale invasion of Ukraine, and the end of 2024, Hungary and Slovakia collectively paid approximately $13 billion (£10 billion) to Russia for oil imports.