Make no mistake, the Kremlin is feeling the pain from the historic landslide victory for Hungary’s opposition, ending the 16-year rule of Viktor Orbán.
The most immediate blow is ideological. Orbán was living proof that sovereign, illiberal democracy is possible, popular, and even sustainable in some parts of the European Union (EU). His fall damages that narrative and sets an uncomfortable precedent for Moscow’s other “illiberal” supporters — those already in power, like Slovakia; those with partial influence, as in the Czech Republic; and those with aspirations, as in Germany.
Each movement is linked by its adherence to nationalism and opposition to the EU, both of which play into Russia’s claims that the bloc is overweening and resisted by ordinary people. Each movement is either overtly Kremlin-friendly or, at a minimum, understanding of Russian ambitions.
Most European right-wing nationalist parties are skeptical about continued support for Ukraine and sanctions against Russia. Here, again, Orbán was a pioneer. Since 2022, Hungary has constantly complicated the extension of sanctions on Russia and the allocation of military aid to Kyiv via the European Peace Facility (EPF). It has also been blocking Ukraine’s EU accession process
Orbán was increasingly bold in thwarting Western support for Ukraine. In 2024, he blocked changes to sanctions that were necessary to loan Ukraine $50bn, bluntly declaring he would not budge until after the US election later that year, where he was betting on Donald Trump returning to power.
Last month, just three weeks before the Hungarian election, Orbán again prevented the allocation of more than $100bn in aid to Ukraine, this time linking it to the suspension of oil transit through the Druzhba pipeline.
In reality, Orbán has never been a principled pacifist, nor a deep ideological ally of Russia. In fact, he owes the start of his political career to an anti-Russian and anti-Soviet position, unlike say, his fellow illiberal Robert Fico in Slovakia, who was a communist. But when voting on sanctions and aid to Ukraine, Orbán has consistently acted as a pragmatic veto-wielder, extracting benefits for Hungary at every opportunity — cash from Brussels, exemptions on energy sanctions, transit compensation.
For Russia, this has been a boon. Orbán’s position slowed sanctions and aid to Ukraine. Russia didn’t have an overt ally, so much as a regular brake on the EU’s anti-Moscow initiatives. Orbán’s ultimate willingness to strike compromises for money meant Moscow could never rely on him fully to block the most hard-hitting measures, but it cost the EU time, money, and political effort.
Now, Moscow will lose that brake. Its public response to Orbán’s overwhelming defeat is therefore hard to swallow. The Kremlin’s mouthpiece, Dmitry Peskov, may have said on April 14 that, “We were never friends with Orbán”, but this is clearly untrue.
His replacement has already indicated he will rebuild relations with Brussels, not least to access almost €30bn ($35bn) in grants and funding that the EU froze in response to Orbán’s refusal to implement reforms and reverse his dismantling of Hungary’s democratic institutions.
He won’t hinder EU policy on Ukraine and Russia in the way Orbán has. We should not expect a complete U-turn on Ukraine, given divisions in the Hungarian electorate and the continued energy dependency on Russia, but Hungary’s permanent veto will come to an end.
What else does Russia lose? From an economic point of view, Budapest’s importance is as an energy and financial bridge to Europe. Orbán has consistently asserted Hungary’s right to continue buying Russian energy even after EU halts imports at the end of next year. Hungary is taking legal action to oppose this, and Magyar may continue that action. Ties with Moscow are too close for him to cut completely, but Budapest will now be less reliable and more suspicious of the Kremlin.
Hungary is a major buyer of Russian gas. In the six months before the Russian invasion of Ukraine, Gazprom and Hungary’s MVM signed two contracts to deliver 4.5 billion cubic meters of gas per year until the end of 2036. Subsequent amendments boosted the volume to 7.7 billion cubic meters. At those volumes, the contract is worth around $2.5bn annually. Financially, it is not crucial to Russia. But to Gazprom, which lost almost all its European clients after the invasion, it is important. Moreover, unlike with oil, Russia has always used gas as more of a political lever than a revenue source.
Magyar would not be able to do much about these contracts. The standard terms of long-term Gazprom deals are “take or pay”: the buyer pays in full, even if it doesn’t receive the gas. Any negotiations to change the terms or leave early will bring Hungary years of arbitration and billions in fines.
That would harm Budapest far more than any lost profits would upset Moscow. The most Magyar could do would be to withdraw from the extra agreements, costing Russia more than $1bn a year. However, since Russian gas is cheaper than alternative LNG, he would struggle to explain increased energy bills to voters who had just supported him at the ballot box during a time of economic unrest. For all these reasons, the gas contracts will most likely remain largely untouched.
Hungary also buys, or, rather, has been buying, more Russian oil than anyone else in Europe. The EU in 2022 banned the purchase, import, or transit of Russian crude oil, but made exceptions for Hungary, Slovakia, and the Czech Republic because of their dependence on Russian fuel. Hungary gets about 10 million tons of oil a year through the Druzhba pipeline. Including Slovakia, where Hungary’s MOL owns the local Slovnaft oil company, deliveries on the southern branch of the pipeline amount to about 12 million tons a year.
However, Druzhba has been out of action since January due to what Ukraine says is damage from a Russian strike. Orbán blamed Ukraine for the blast, accused Ukraine of stalling repairs, and thus blocked the EU loan to Kyiv.
Magyar will likely soften Hungary’s stance, making the 2027 deadline more realistic. In theory, Russia would lose about $6bn a year in sales via Druzhba.
Russia would also likely shelve its plan to increase its footprint on the EU energy market through a sale of the controlling stake in Serbia’s oil company NIS from Russia’s Gazprom Neft to a consortium led by Hungary’s MOL. For the new government of Hungary, ditching the deal would be an easy way to demonstrate its pro-EU stance without hurting the population with high energy prices.
The third energy hook is Hungary’s Paks-2 nuclear station, currently under construction. The multi-billion-euro project involves Russia’s Rosatom nuclear agency (which is not EU-sanctioned). No government can halt it without colossal financial losses. Construction officially started in February, with commissioning expected around 2033-2035. The total cost is projected at €12.5bn, of which €10bn billion was loaned by Russia, a typical financing agreement for such projects. Abandoning would entail repaying that loan, plus financial penalties.
Continuing to work with Rosatom and deepening Hungary’s energy dependence on Russia is a toxic stance for a pro-European party. But Magyar will find it hard to step away without an alternative, especially as it is anticipated that the new station will provide 70% of Hungary’s electricity needs. That’s only underlined by the Iran war, which has again demonstrated that reliance on foreign fossil fuels is less than ideal.
The loss of Hungary as a financial channel to Europe is likely to be painful for Moscow. Some transactions between Russia and entities in the EU have been carried out via Hungarian structures precisely because Orbán’s government turned a blind eye. Under Magyar, this route might be closed.
Hungary’s OTP Bank plays a key role here. OTP’s Russian subsidiary is the 20th biggest bank in Russia by assets and one of the few that doesn’t face direct US sanctions. Other Russian subsidiaries of European banks, such as Austria’s Raiffeisenbank (the 11th largest in Russia) and Italy’s UniCredit (23rd), are also untouched by sanctions but face constant pressure from the European Central Bank to reduce their exposure to Russia, limit new lending, and expedite their exit from the market. (UniCredit is now considering liquidating its subsidiary.)
OTP is in a fundamentally different situation. Since Hungary is not in the Eurozone, it’s regulated by Hungary’s National Bank, not the ECB. European regulation has no direct leverage over OTP and, under Orbán, Hungary’s Central Bank had no concerns about its activities in Russia. This made OTP a unique channel for cross-border operations.
A new leader in Hungary could change all this. Officially, Hungary’s Central Bank is independent of the government, but a more Brussels-friendly administration in Budapest would be unlikely to protect OTP’s Russian activities from EU pressure. This could also pose a threat to Hungarian companies still working in Russia, which are suspected of being involved in schemes to circumvent technological and financial sanctions. The loss of this channel would complicate supply chains and increase costs, although it is impossible to calculate the extent of the real losses for Moscow.
Orbán’s defeat is painful for Russia. This is partly due to the impact on energy ties, like possible reductions in gas sales or problems building the nuclear power station. The loss of financial links via OTP would also sting.
But the real damage is strategic. Hungary is Russia’s major stronghold in the EU, simultaneously providing a veto at the EU Council, a banking channel, and energy contracts. None of this would collapse overnight, but Orbán’s departure could trigger an irreversible weakening in Moscow’s foothold inside the EU.
Alexander Kolyandr is a Non-Resident Senior Fellow at the Center for European Policy Analysis (CEPA), specializing in the Russian economy and politics. Previously, he was a journalist for the Wall Street Journal and a banker for Credit Suisse. He was born in Kharkiv, Ukraine, and lives in London.
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Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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