The United States has granted Hungary a one-year exemption from sanctions linked to buying Russian oil and gas. This decision was announced after a warm meeting between President Donald Trump and Hungarian Prime Minister Viktor Orban at the White House.
The exemption allows Hungary to continue using Russian energy for the next 12 months without facing US penalties. It follows the sanctions imposed last month on Russian oil companies Lukoil and Rosneft, which included potential penalties on countries continuing to buy oil from them.
During the meeting, Viktor Orban explained why Hungary needs to keep using Russian oil and gas, stressing that stopping suddenly would hurt Hungarian citizens and the national economy. He highlighted that Hungary does not have access to the sea or ports, making it difficult to import energy from other regions.
President Trump acknowledged Hungary’s geographical limitations and said the situation is different for countries without direct sea access. As part of the agreement, Hungary has committed to purchasing US liquefied natural gas (LNG) worth about USD 600 million, showing continued cooperation between both nations.
Hungary’s Strong Dependence on Russian Energy
Hungary continues to rely heavily on Russian fuel despite the conflict that began in 2022. This has led to criticism from some European Union and NATO members.
According to International Monetary Fund (IMF) data, in 2024 Hungary sourced 74% of its gas and 86% of its oil from Russia. The IMF also warned that an EU-wide cutoff of Russian gas could cause Hungary to face output losses of more than 4% of its GDP.
Hungary has said it cannot immediately shift its energy supply because its domestic refineries are built to process Russian “Urals” crude oil. Ratings agency S&P noted that Hungary has one of the most energy-intensive economies in Europe and remains vulnerable to an energy shock.
Supplies from Azerbaijan and Qatar could help reduce Russian dependence in the future, but would take time to develop. Hungary has also opposed the European Commission’s plan to phase out all Russian gas and LNG imports by the end of 2027, adding to tensions with Brussels.
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Talks on the Ukraine War and International Relations
The two leaders also discussed Russia’s war with Ukraine. President Trump said the main obstacle to peace is that Russia is not ready to stop fighting yet, but added that he believes this situation may change.
He asked Viktor Orban whether Ukraine could win the war, to which Orban responded that a “miracle can happen.”
President Trump had previously said he planned to meet Russian President Vladimir Putin in Budapest, but the meeting was paused after Russia rejected a ceasefire proposal.
Hungary’s stance on the conflict and its continued purchase of Russian energy have caused disagreements within the EU. The country has stated that it will handle its disputes with the EU internally.
Last year, the EU’s top court ordered Hungary to pay a 200-million-euro fine for failing to change its migrant and asylum policies. Hungary must also pay a daily fine of 1 million euros until the required changes are made.
Stronger US-Hungary Cooperation and Support
The White House meeting also focused on boosting economic and political cooperation. Viktor Orban said he expects a “golden age” in relations between the US and Hungary.
During the meeting, Orban criticised the previous Biden administration, which won him appreciation from President Trump. Trump expressed strong support for Orban ahead of Hungary’s 2026 election and praised his immigration policies.
The two leaders have maintained close ties for years, with shared views on border control and national policy. A recent sign of improving relations came when the US fully restored Hungary’s status in its visa waiver program, allowing easier travel for Hungarian citizens.
The one-year sanctions exemption marks a notable moment in US-Hungary relations, reflecting continued cooperation on energy and broader diplomatic ties.