Hungary’s realpolitik on Russia
The new Trump administration poses a trilemma for Hungary’s illiberal political model. How will Prime Minister Viktor Orban manage relations with global powers?
In a nutshell
- Hungary relies on Berlin, Moscow, Beijing and Ankara for economic ties
- Budapest defies EU sanctions, maintaining energy dependence on Russia
- Hungary’s relations with Russia, China and the U.S. face major challenges
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Hungarian Prime Minister Viktor Orban has emphasized four key capitals that are important to Hungary, as well as to Central and Eastern Europe: Berlin for its economic influence, Moscow for its energy resources, Beijing for trade and Ankara for migration. Hungary is the only nation in the European Union and NATO where Russian fossil fuel and nuclear energy support the operations of Chinese battery factories, which, in turn, supply products used in German luxury cars.
While the EU aims to completely free itself from Russian energy and avoid overdependence on China, Budapest is taking a different path. As a landlocked country, Hungary is seeking exemptions from the energy sanctions imposed by the EU and the United States. Neighboring nations, including the Czech Republic, Austria and Slovakia, are gradually shifting their refineries away from Russian oil. In contrast, the Hungarian government is extending the Druzhba oil pipeline to Nis in Serbia, continuing its Soviet-era energy dependence.
Hungarian government officials actively engage with their Russian and Belarusian counterparts in Moscow and Minsk, often without prior consultation with Ukraine. They are hopeful for the swift success of U.S. President Donald Trump’s peace initiatives, which they believe could lead to the lifting of Western sanctions.
Hungary has been critical of these sanctions and has secured exemptions, such as one for Patriarch Kirill I of Moscow, the head of the Russian Orthodox Church, allowing him to negotiate prisoner exchanges with the Vatican. However, despite its criticisms, the Hungarian government has consistently voted in favor of all 16 EU sanctions packages imposed on Russia.
Could Hungary’s realpolitik toward Russia, a remnant of the pre-war period, serve as a laboratory for the sanctions era, or even an economic and cooperation model for the post-war period?
Hungary-Russia historical ties
Hungary and Russia, though geographically distinct, were once neighbors within larger empires. This proximity was particularly evident following the three partitions of Poland in the late 1700s, and again in 1945, when the Soviet Union established a foothold in the Carpathian Basin, specifically in the Subcarpathian region, now Transcarpathia in Ukraine.
Over the past two centuries, Hungary faced four major armed conflicts, each shaping its historical trajectory. During the Hungarian Revolution of 1848-1849, the Habsburg monarchy received help from Tsar Nicholas I of Russia, whose forces defeated the Hungarian Revolutionary Army. Hungary faced significant losses in both World Wars, resulting in territorial and political consequences. After World War II, the Soviet Red Army occupied Hungary, leading to communist rule. In 1956, Soviet tanks suppressed the Hungarian anti-communist uprising.
Polls show that many Hungarians today are still anti-communist. However, their past animosity toward the Soviets has shifted to a favorable view of economic cooperation with Russia. This gives Prime Minister Orban a strong tailwind in negotiations with the EU. Most Hungarians are eager to align with the West and, unlike the Poles, Balts and Scandinavians, they feel less threatened by Russia, even after the full-scale invasion of Ukraine in 2022.
Hungary has long been a popular destination for middle-class Russian tourists, with frequent direct flights operated by the Hungarian low-cost carrier Wizz Air and relatively straightforward visa processes. Despite Russia’s annexation of Crimea in 2014, Hungary continued to welcome Russian tourists and extended its hospitality to artists and athletes from Russia following the invasion of Ukraine in 2022. Among those who benefited from Hungary’s golden Schengen visa between 2013 and 2017 was Andrey Naryskhin, the son of the director of Russia’s Foreign Intelligence Service.
Policy evolution pre- and post-2010
The adage “where you sit determines what you see” applies to the Russia policy of Hungarian parties and politicians. Opposition leaders often criticize ties with Russia when out of power, highlighting energy dependency or political meetings as problematic. However, when in government, these same leaders maintain or deepen those ties. This contradiction exists because energy dependency significantly limits their options.
Historically, social-liberal governments in Hungary have maintained close ties with Russia. For instance, Ferenc Gyurcsany, who served as prime minister from 2004 to 2009 and is now an opposition politician, hosted President Putin for lunch at his home in 2006. He was also invited to a dinner with Mr. and Mrs. Putin in Moscow in 2009. In contrast, a young Viktor Orban, in a speech in June 1989, was the first to advocate for the withdrawal of Soviet troops from Hungary and criticized the hostile takeover attempts of the Hungarian energy company MOL Group by Russian oligarchs.
Mr. Orban expressed strong disapproval of the Russian-Georgian war of 2008, labeling it as “belligerent aggression.” With a nod to the influence of the social-liberal government at the time, he cautioned against the risk of transforming “Hungary into Gazprom’s happiest barrack.” The then U.S. ambassador sent a cable to Washington in 2007 stating: “Orban may be no angel, but he is on the side of the angels on these issues.”
The year 2010 marked a significant turning point in Hungarian domestic policy, but it did not change the country’s approach to Russia. The social-liberal governments from 2002 to 2010 largely maintained their Russia policy, which Prime Minister Orban continued and even intensified upon taking office.
Mr. Orban’s perspective on Russia has evolved in response to shifting geopolitical dynamics, such as the sluggish progress of the Nabucco gas pipeline and the slowdown of EU and NATO expansion eastward. After visiting St. Petersburg in November 2009, Mr. Orban, who became prime minister in 2010, chose a strategy of compromise with Mr. Putin over confrontation. In December 2009, he met with Xi Jinping in Beijing, who was then serving as China’s vice president.
The bilateral relationship between Russia and Hungary remains strong, with annual high-level meetings alternating between the capitals. Prime Minister Orban traveled to Moscow in February 2022 and July 2024 and met with President Putin in Beijing in October 2023. Budapest’s withdrawal from the International Criminal Court could allow President Putin to visit Hungary without facing any legal consequences starting in spring 2026, provided he receives overflight approval from other member states.
This proximity to influential autocratic leaders and the economic progress of these nations led Prime Minister Orban to quote Fareed Zakaria’s article on the rise of illiberal democracies during his party’s 2014 summer university, an annual event organized by the Fidesz party. He asserted that Hungary, despite being part of Western integrations, should adopt the economic model of the illiberal countries. Critics of Prime Minister Orban overlook that the West also needs leaders who can be long-term allies, acting as mediators and messengers between global capitals.
Economic relations and energy dependence
Hungary and Russia share a solid economic foundation that has strengthened their relationship over the years. Following the withdrawal of Soviet troops from Hungary in 1991, Budapest continued to import Russian energy in exchange for supplying buses, food and machinery. As part of this barter system, Russia compensated Hungary with energy supplies and, in 1993, delivered 28 MiG-29 fighter planes.
After Hungary joined the EU in 2004 and the consolidation of Mr. Putin’s regime in Russia, economic relations shifted toward a market-driven model. Russian investors gained prominence, with Vnesheconombank, a state-owned development bank, acquiring partial ownership of the Malev Hungarian Airlines and Dunaferr Steelworks. In 2009, Russian energy giant Surgutneftegas purchased a 21.2 percent stake in the MOL Group. Some viewed this as a hostile takeover attempt, but the Hungarian government intervened, capping voting rights to block Russian control over MOL’s management.
When Mr. Orban became prime minister, he faced numerous unresolved challenges, which he has addressed over time. Malev Hungarian Airlines went bankrupt in 2012 and ceased operations. A Ukrainian-Russian consortium acquired Dunaferr Steelworks, but after years of ownership disputes, the company now seeks a new buyer. In 2016, Russian engineering firm Metrowagonmash won a contract to refurbish metro trains on Budapest’s Line 3, a deal critics viewed as partial compensation for losses incurred by other Russian companies in Hungary. This led to a joint venture with Metrowagonmash’s parent company, Transmashholding, which secured a contract in 2018 to build 1,300 passenger carriages for Egypt’s railways, with half produced in Russia and half in Hungary. Approximately 1,000 carriages have been delivered to date.
Hungary relies on Russia for approximately 95 percent of its gas requirements as of 2020 and around 77 percent of its oil in 2023. Amid EU sanctions and declining Russian oil sales, Hungary has become a key buyer and transit hub, exceeding contracted oil amounts since 2023. Notably, in 2024, 4.7 million tons of Russian oil were transported through Ukraine via the Druzhba pipeline, generating around $250 million in transit fees for the war-torn country. Shipments through the pipeline were briefly suspended in March 2025 due to a Ukrainian drone strike on a metering station, but resumed shortly after repairs.
Critics point out that the Russian business landscape has a lucrative yet shadowy side. Social-liberal governments have tolerated an intermediary trade in Russian gas that continued after 2010. This trade involves companies registered in Switzerland, which are operated by proxies of Russian and Hungarian oligarchs. The business model is straightforward and mirrors practices seen in other industries: Middlemen purchase Russian gas at the border at a lower price and then sell it at a markup once it crosses the border.
Hungary is currently linked to six of its seven neighboring countries through gas pipelines. And for an extended period, Russian gas also came in through pipelines from the west.
Facts & figures
Russian natural gas pipeline network to Europe
Hungary’s political strategy and EU-Russia sanctions
Hungary’s future Russia policy hinges on the April 2026 parliamentary elections. If Fidesz wins, its pragmatic approach will continue. Prime Minister Orban is using his veto power to secure billions in withheld EU funding and continues to engage in diplomatic gestures. He continues to meet with President Putin and has had Russian oligarchs and Kremlin trustees removed from the EU sanctions list.
While Hungary pursues its Russia-friendly policies, the EU aims to eliminate its dependence on Russian fossil fuels by 2027, allocating 210 billion euros as part of the RePowerEU initiative. Hungary, however, is seeking $500 million from the EU to convert its refineries, citing a 2021 gas contract with Russia for 10 years, which can be extended by five more. The EU has two stricter options: First, it can unanimously impose sanctions on remaining energy sources; second, it can approve tariffs by majority vote to render Russian energy uncompetitive.
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If the opposition Tisza Party wins the 2026 Hungarian elections, it would likely align with policies of the EU and the European People’s Party, gradually adapting to EU sanctions. Their first step would be to halt the construction of the Paks 2 nuclear power plant, drawing lessons from Finland’s Hanhikivi 1 project. Next, the party would focus on transforming the MOL refinery. It would then work to end Russian gas dependency and finally phase out other ongoing projects.
One trilemma too many
According to economist Dani Rodrik’s political trilemma of globalization, “democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full.” Hungary faces a different trilemma because of President Trump’s policies. Can it maintain strong relations with Russia, China and the U.S. simultaneously? Likely not, or certainly not for much longer.
Scenarios
Most likely: Hungary continues to depend on Russian energy
Hungarian-Russian energy projects are at a point where Hungary is too invested to back out – if it does, it faces the risk of heavy contractual penalties for gas and oil not taken under long-term agreements. Budapest is hesitant to abandon these profitable Russian ventures due to the substantial resources already committed.
If the situation remains unchanged, Hungary is poised to fully exploit the maximum capacity of its pipelines for Russian gas and oil. This would allow the country to offer inexpensive energy to domestic industries and households and to supply neighboring nations. Hungarian energy companies will likely see their profits continue to rise, giving them a competitive edge in the region and allowing for further acquisitions.
Less likely: Hungary shifts from Russian oil and gas
The Trump administration appears to be aligning with Moscow in the Russia-Ukraine conflict, raising questions about its strategy. Some speculate President Trump is taking a “reverse Kissinger” approach, partnering with Russia to counter China’s global influence, a reversal of U.S. Secretary of State Henry Kissinger’s 1970s tactic of aligning with China against the Soviet Union. If there is no Trump-Putin deal, and the U.S. implements its secondary sanctions, such as imposing 500 percent tariffs on countries that purchase Russian oil, Hungary would likely distance itself from Russian energy and accept EU assistance for the transition. This scenario would also play out if the Hungarian opposition were to win the 2026 elections.
In this scenario, Hungarian households and the manufacturing sector would face the same increase in cost as other European countries. After 12 years, the government would have to raise utility prices to prevent a rapidly expanding budget deficit. As a result, Hungarian energy companies would lose their current competitive edge.
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