Hungary says it has permanent US exemption from Russian oil and gas sanctions

Hungarian Foreign Minister Péter Szijjártó said that the United States has granted Budapest a full, open-ended exemption from sanctions on Russian oil and gas, doubling down against media reports that the waiver was only good for a year.

Washington ‘has granted Hungary a full and unlimited exemption from sanctions on oil and gas. We are grateful for this decision, which guarantees Hungary’s energy security,’ Szijjártó said on X the day after Hungarian Prime Minister Viktor Orban met with President Donald Trump at the White House.

Following reporting from international media outlets quoting an unidentified White House official as saying the waivers for Hungary would expire in one year, Szijjártó wrote that was ‘Fake news’. He reiterated: ‘The exemption is permanent for an indefinite period.’

Orban told Hungarian media after the talks he had received exemptions for the Druzhba oil pipeline and the TurkStream gas pipeline, both of which deliver energy from Russia.

The waiver comes as the US sanctions on Russian oil giants Rosneft and Lukoil have forced multiple European countries to confront difficult decisions about Russian energy assets. The Treasury Department’s decision to add the companies to its Specially Designated Nationals list gave companies until 21 November to wind down transactions with the Russian oil producers or face secondary sanctions themselves.

Lukoil announced it would sell its international assets, including refineries in Bulgaria, Slovakia and Romania, following the US sanctions, which came on top of EU and UK measures targeted at the Russian energy giants.

Bulgaria faces the deadline to wind down operations at Lukoil’s Neftohim Burgas refinery, the largest in the Balkans, while The Netherlands is preparing for a quick sale of Lukoil’s stake in the Zeeland refinery. Germany has received temporary exemptions for Rosneft’s subsidiaries, and Finland’s Neste has suspended fuel deliveries to Lukoil-owned Teboil.

Romania said it would wait for European Union guidance before deciding how to manage sanctions against Lukoil, which owns the country’s main oil refinery and a network of 320 petrol stations.

Between them, Rosneft and Lukoil are responsible for 55% of Russia’s oil output and export 3.1 million barrels of oil per day. The Treasury Department warned that foreign financial institutions conducting significant transactions with the designated entities ‘run the risk of being sanctioned’.

Hungary has been dependent on Russian energy imports and has resisted EU efforts to impose comprehensive sanctions on Russian oil and gas following Russia’s invasion of Ukraine in February 2022. The EU has granted Hungary and Slovakia exemptions from its ban on Russian oil imports via pipeline.