Hungary’s Russian Oil Reliance: A Profitable Paradox?
Hungary continues to purchase significant volumes of discounted Russian crude oil, a practice that’s drawing increasing scrutiny. Despite access to alternative supply routes and the capacity to process non-Russian oil, Budapest remains heavily reliant on Russian sources. This isn’t translating into lower prices for Hungarian consumers, raising questions about where the savings are going and fueling concerns about potential corruption and the financing of Russia’s war efforts.
The Disconnect Between Crude Costs and Pump Prices
A recent report by the Center for the Study of Democracy (CSD) highlights a stark contrast: whereas Hungary benefits from cheaper Russian oil, fuel prices at the pump are considerably higher than in neighboring Czechia, which sources its crude from more expensive, non-Russian alternatives. This suggests that the cost savings from discounted Russian oil aren’t being passed on to consumers.
The largest Hungarian oil company, MOL, with close ties to Prime Minister Viktor Orbán, appears to be the primary beneficiary. Since Russia’s invasion of Ukraine in 2022, MOL’s revenues have increased by 30 percent. The CSD report alleges that these profits are flowing to foundations linked to Orbán, including the Mathias Corvinus Collegium.
Political Choice or Practical Necessity?
The Hungarian government maintains that purchasing Russian oil is a necessary economic decision. However, the CSD argues that this reliance is a deliberate political choice, not a logistical constraint. Hungary has access to the Adriatic pipeline, which allows for the import of non-Russian crude oil via Croatia.
While Russian crude is significantly cheaper, this discount isn’t reflected in consumer prices. MOL purchases the discounted oil but sells its products at prices comparable to regional markets, maximizing profits. This raises questions about transparency and accountability within the Hungarian energy sector.
EU Exemptions and Shifting Dependencies
The European Union granted Hungary, along with Slovakia and Czechia, temporary exemptions from the phased-out Russian oil import plans following the 2022 invasion of Ukraine. While Czechia has since ceased purchasing Russian oil, Hungary and Slovakia have become even more dependent. In 2023, Russia accounted for over 92 percent of Hungary’s crude oil imports, up from 61 percent before the invasion.
MOL’s Potential for Diversification
Despite previous statements suggesting complete dependence on Russian crude, MOL indicated in November 2025 that it could source approximately 80 percent of its crude oil from outside Russia if supplies through the Druzhba pipeline were disrupted. This would involve utilizing the Adriatic pipeline, but would also entail “higher technical risks and logistics costs.” MOL is investing up to $700 million to upgrade facilities to process non-Russian crude, with project completion expected in 2026.
Recent Disruptions and Regional Impacts
In October 2025, explosions occurred at oil refineries in both Romania and Hungary, facilities with links to Russia. The Petrotel-Lukoil refinery in Romania, owned by a subsidiary of Russian oil giant Lukoil, was reportedly offline for planned maintenance at the time of the incident. Simultaneously, Hungary’s largest refinery, located in Szazhalombatta and receiving crude oil from Russia, experienced an explosion.
Ukraine has implemented sanctions, blocking the import of Russian oil to Hungary via Ukrainian territory, as of late June 2025.
Looking Ahead: Potential Future Trends
The situation highlights a growing tension between European energy security goals and the political realities within individual member states. Several trends are likely to emerge:
- Increased EU Pressure: The EU is likely to intensify pressure on Hungary and Slovakia to reduce their reliance on Russian oil, potentially through stricter enforcement of existing sanctions or the removal of exemptions.
- Diversification Efforts: MOL will likely continue investing in infrastructure to diversify its crude oil sources, even if it means higher costs.
- Geopolitical Risk: The vulnerability of energy infrastructure to disruptions, as demonstrated by the recent explosions, will likely increase geopolitical risk in the region.
- Transparency Demands: Calls for greater transparency in the Hungarian energy sector will likely grow, with increased scrutiny of MOL’s financial performance and its relationship with the government.
FAQ
Q: Why is Hungary still buying Russian oil?
A: The Hungarian government argues it’s an economic necessity, but critics claim it’s a political choice.
Q: Is MOL profiting from the situation?
A: Reports suggest MOL’s revenues have increased significantly since the invasion of Ukraine, raising concerns about potential undue profits.
Q: Can Hungary easily switch to non-Russian oil?
A: MOL states it can source most of its crude from outside Russia if necessary, but it would involve higher costs and technical challenges.
Q: What is the EU doing about this?
A: The EU granted Hungary a temporary exemption, but is likely to increase pressure to reduce reliance on Russian oil.
Did you know? Hungary’s dependence on Russian oil has increased since the start of the war in Ukraine, despite EU efforts to reduce reliance on Russian energy sources.
Pro Tip: Maintain an eye on developments regarding the Adriatic pipeline, as it represents a key potential pathway for Hungary to diversify its oil supply.
What are your thoughts on Hungary’s energy policy? Share your opinions in the comments below and explore more articles on our website for in-depth analysis of European energy markets.
