As the European Union accelerates its drive to eliminate Russian energy imports by 2027, Hungary continues to buck the trend, maintaining and even expanding its dependence on Moscow's oil and gas supplies. This stance, led by Prime Minister Viktor Orbán, has drawn scrutiny from both EU partners and the U.S. administration, which is urging NATO allies to sever ties with Russian fossil fuels. While Budapest argues that geography and infrastructure make alternatives unfeasible, energy analysts contend that viable options exist, pointing to potential political motivations behind the policy
Economic Claims vs. Expert Analysis
Hungary's government has repeatedly warned that cutting off Russian energy would devastate the economy. Orbán stated in September that such a move could immediately slash Hungarian GDP by 4%, bringing the economy "to its knees." The landlocked nation relies heavily on the Druzhba pipeline for crude oil, which supplies the majority of its needs, and officials claim that switching sources would spike household utility costs, potentially doubling electricity bills and tripling gas prices.
However, independent experts challenge this narrative. László Miklós, a former executive at Hungary's national oil company MOL, argues that the country's integrated position in the European market provides ample alternatives, with infrastructure like the Adria pipeline from Croatia capable of handling significant volumes. Research from the Atlantic Council indicates that Hungary has actually increased its Russian oil dependence from 61% before Russia's 2022 invasion of Ukraine to 86% today, despite EU-wide efforts to diversify. Miklós suggests this reliance benefits MOL through windfall profits and indirectly supports Russia's war efforts by funneling billions into Moscow's coffers.
In August 2025 alone, Hungary was the EU's largest importer of Russian fossil fuels, paying nearly €979 million alongside other top importers. Between 2022 and 2024, Hungary and neighboring Slovakia imported Russian oil worth €13 billion and €15 billion respectively, highlighting the financial scale of this dependency.
Infrastructure and Alternatives: A Viable Path Forward?
Neighboring countries provide precedents. The Czech Republic, also landlocked, celebrated its "oil independence day" in 2025 after upgrading the TAL pipeline from Italy, fully ending Russian oil reliance. Slovakia, facing similar pressures, has begun exploring diversification despite shared exemptions with Hungary under EU sanctions.
MOL itself is investing $500 million to adapt its refineries for non-Russian crude by 2026, signaling internal recognition of the need for change. Additionally, Hungary recently signed a 10-year gas supply deal with France's Engie, a move that could diversify sources even as it maintains Russian imports. Gas analyst Borbála Takácsné Tóth estimates that breaking from Russian gas might cause only a minimal 1.5-2 euros per megawatt-hour increase less than 5% contradicting government claims of economic catastrophe.
Political Dimensions and EU Pressures
Critics, including opposition figures and international observers, view Orbán's policy as intertwined with his close ties to Russian President Vladimir Putin. Hungary has opposed multiple EU sanctions packages, including the 19th round unveiled in September 2025, which bans Russian LNG imports by 2026 and targets niche fuels like vacuum gas oil by year's end. Foreign Minister Péter Szijjártó has dismissed these measures as ideologically driven, ignoring geographical realities.
The U.S., under President Trump, has amplified calls for NATO members to abandon Russian energy, adding transatlantic pressure on Budapest. As EU exemptions for pipeline supplies to landlocked nations like Hungary expire, analysts predict forced diversification, potentially at a small economic cost that other European countries have already absorbed.
Outlook for Investors and Markets
For financial markets, Hungary's position poses risks. MOL's shares could face volatility as diversification investments ramp up, but long-term benefits from reduced geopolitical exposure may outweigh short-term costs. Broader EU energy markets remain stable, with benchmark gas prices influencing Hungarian costs regardless of source. Investors eyeing Central European energy should monitor upcoming EU decisions, which could reshape regional supply chains and profit margins.
As Brussels tightens the screws, Hungary's energy policy tests the limits of EU unity, blending economic calculations with strategic alliances in a post-invasion world.