US Grants Hungary Sanctions Relief as India Faces Strategic Squeeze on Russian Oil and Trade
In a move that underscores the geopolitical leverage behind Washington’s energy sanctions, the United States has granted Hungary a one-year exemption from punitive measures on Russian oil firms Rosneft and Lukoil — just weeks after imposing them on October 22.
The waiver, announced November 7, follows Budapest’s commitment to buy nearly $600 million worth of US LNG and $114 million worth of American nuclear fuel, signalling that strategic alignment and big-ticket energy purchases can shape sanction outcomes.
The decision comes amid heightened global scrutiny of sanctions enforcement following US President Donald Trump’s talks with Chinese President Xi Jinping on October 30, where — notably — Russian oil did not feature, despite China being the largest buyer of Moscow’s crude.
Beijing’s successful establishment of an independent payment mechanism has effectively shielded it from sanctions-related pressure.
India, however, finds itself in a far more precarious position. While New Delhi continues to face steep US tariffs and rising trade friction, it is now seeing a visible decline in discounted Russian crude — a development that could strain its energy security and longstanding ties with Moscow.
Ironically, despite low commodity prices granting Washington broad sanction flexibility, it is India — not China or Hungary — feeling the hardest pinch for sourcing Russian oil.
The energy-linked strain overlaps with ongoing trade tensions. On August 27, the US imposed 50% tariffs on Indian goods after trade talks faltered, particularly over India’s concerns regarding American genetically modified agricultural imports.
India’s exports to the US subsequently fell 12% in September, affecting labour-intensive sectors heavily.
Political Calculus Behind Hungary’s Exemption
The waiver for Hungary appears driven more by political considerations than energy constraints. Standing beside Hungarian Prime Minister Viktor Orbán,
Trump hailed him as a leader European states should “respect,” praising his stance on immigration and asserting that Orbán “understands Putin” and could help end the Ukraine war.
The gesture echoes Trump’s pattern of rewarding leaders he sees as ideologically aligned — as seen in past dealings with South Africa, Argentina, and Brazil.
Washington justified Hungary’s reprieve by citing logistical barriers to sourcing non-Russian oil.
However, analysis from the Centre for the Study of Democracy pushes back, noting that Hungary and Slovakia can be fully supplied via Croatia’s Adria pipeline.
In fact, Hungary boosted Russian oil imports from 61% pre-Ukraine war to 86% in 2024, while Slovakia remains almost entirely dependent on Moscow.
Both nations have also expanded Russian gas intake through the TurkStream pipeline, deepening Kremlin influence in Central Europe despite EU attempts at diversification.
India’s Russian Oil Intake Falls Sharply
India’s Russian oil inflows are already contracting ahead of the sanctions taking effect on November 21.
In the week ending October 27, Russia shipped just 1.19 million barrels per day to India — down sharply from 1.95 million bpd just two weeks earlier, according to Kpler vessel-tracking data.
The drop primarily reflects curtailed shipments from Rosneft and Lukoil, which supply over two-thirds of India’s Russian crude.
Rosneft shipments to India plunged from 1.41 million bpd to 0.81 million bpd in a week, while Lukoil recorded zero deliveries after sending 0.24 million bpd the previous week.
Path Forward: Energy Diplomacy with Washington
With sanction pressure mounting and discounted Russian supplies tightening, India may need to recalibrate.
A trade agreement with Washington tied to greater US energy imports could provide relief by reducing tariffs to a more manageable 15-20% band.
Yet uncertainty looms — the outcome of the US Supreme Court case on tariff legality may ultimately determine whether such negotiations hold value.
For now, Washington’s Hungary carve-out sends a clear signal: in the energy and sanctions chessboard, geopolitics — not uniform enforcement — continues to dictate outcomes.
And India, despite strategic importance, is navigating increasingly narrow diplomatic and economic corridors as great-power rivalry intensifies.
