Hungary Gets a Pass from US on Russian Oil Sanctions: What It Means for India

 

In a surprising geopolitical twist, the United States has granted Hungary a one-year exemption from sanctions on Russian oil, even as it continues to pressure other nations — including India — to reduce their reliance on Russian energy. The move, announced just weeks after fresh sanctions were imposed on Russian oil giants Rosneft and Lukoil on October 22, has stirred debate on whether Washington’s approach to sanctions is more political than economic.

A Strategic Exemption for Hungary

Hungary’s exemption allows the Central European nation to continue purchasing Russian oil despite the latest American sanctions. In return, Hungary has committed to purchasing US liquefied natural gas (LNG) worth nearly $600 million and building a $114 million nuclear fuel deal.

This waiver follows President Donald Trump’s meeting with Chinese President Xi Jinping, where Trump emphasized that allies who cooperate with the US on critical issues — such as countering China — might receive favorable treatment. Hungary’s Prime Minister Viktor Orbán, known for his close ties with Russian President Vladimir Putin, has positioned his country as a balancing force between Moscow and the West.

At a joint press conference, Trump stated that European leaders should respect Orbán “because he’s been a strong man who knows how to deal with Putin,” highlighting that Hungary understands “the art of keeping peace while defending its interests.” However, analysts see this exemption as a largely political gesture, designed to reward Budapest’s cooperation while managing tensions within Europe.

Impact on India: A Different Story

For India, however, the message is mixed. Despite maintaining a neutral stance in the Russia-Ukraine conflict and significantly ramping up imports of discounted Russian crude, India has not been offered any such leniency. Instead, New Delhi continues to face subtle diplomatic pressure from Washington to scale down its purchases.

India’s situation is complex. The country relies heavily on imported crude to meet its domestic energy demands — nearly 85% of its oil consumption comes from abroad. The sanctions on Russia have, therefore, been both a challenge and an opportunity. On one hand, Indian refiners like Indian Oil Corporation and Bharat Petroleum have benefited from discounted Russian barrels; on the other, the payment mechanisms and shipment logistics have become increasingly complicated due to sanctions-related restrictions.

While Hungary enjoys an exemption, India seems to be paying a higher geopolitical price for keeping its energy ties with Moscow intact. The contrast between Washington’s treatment of Hungary — a NATO ally — and India — a strategic partner in the Indo-Pacific — raises uncomfortable questions about the consistency of US foreign policy.

The Broader Economic Context

Experts believe that this latest move is aimed at consolidating US influence in Europe amid growing cracks within the European Union over the Russian oil embargo. The Centre for the Study of Democracy (CSD), a European think tank, notes that exemptions for Hungary and Slovakia, along with oil supply adjustments from Croatia, are designed to stabilize Europe’s energy markets, which remain vulnerable to disruptions.

Following the October 22 sanctions announcement, Russian oil dispatches to India rose sharply. Data shows that in the two weeks following the sanctions, India’s imports jumped to around 1.91 million barrels per day, compared to 1.55 million barrels per day previously, according to provisional tracking data from Kpler, a vessel tracking and analytics firm.

This surge reflects both India’s opportunistic buying strategy and Russia’s need to maintain export revenues amid Western sanctions. However, this economic relationship has made India a target of criticism from Western media and policymakers, who argue that such purchases indirectly help sustain Russia’s war efforts in Ukraine.

A Trade Deal That Didn’t Happen

Adding to the tension, a trade deal between the US and India that was expected to reduce tariffs on several goods, including US agricultural products, has stalled. Talks were held on August 27, but no final agreement could be reached due to multiple unresolved issues.

This delay has further strained the trade relationship between the two nations. While India seeks more flexibility and recognition of its energy security needs, Washington appears more interested in strategic alignment — especially in the Indo-Pacific region — than in offering tangible economic concessions.

A Double Standard in Sanctions Policy

Observers argue that the US’s decision to exempt Hungary while continuing to pressure India reveals the political nature of sanctions enforcement. Hungary, a European Union member, is being accommodated partly to maintain unity within NATO and the EU at a time when anti-sanctions sentiment is rising in parts of Europe.

In contrast, India’s energy choices are viewed through the lens of great-power competition. As the world’s fastest-growing major economy, India’s continued dependence on Russian oil complicates Washington’s efforts to isolate Moscow globally.

While the US understands India’s energy needs, it has yet to show the same diplomatic flexibility that it extended to Hungary. The implicit message seems to be that allies closer to Washington’s strategic geography receive more generous treatment.

The Road Ahead

India is unlikely to bow to Western pressure anytime soon. Officials in New Delhi maintain that energy purchases are guided by national interest and market dynamics, not by political considerations. With oil prices fluctuating and global demand recovering, India’s diversified sourcing strategy remains essential to keeping domestic prices stable.

The US exemption for Hungary, therefore, serves as a reminder of how global geopolitics often dictates economic realities. For India, it underscores the need to strengthen its diplomatic independence — balancing its relations with both Washington and Moscow while safeguarding its energy security.

As the world continues to grapple with shifting alliances and sanctions regimes, India’s challenge will be to maintain this delicate balance without compromising its economic growth or international partnerships.

This story is adapted from a report originally published by The Indian Express.