Energy and Geopolitics: The Hungarian Dilemma

Before the outbreak of the war, Russia dominated the Central and Eastern European energy sector. Before 2022 some European powers, like Germany (Nord Stream II) and Italy (South Stream – later TAP) even chose to increase the import of cheap Russian energy. In other words the competition for cheap Russian energy was important for the states in the region. Hungary, due to its geopolitical position, adapted to the existing German-influenced order rather than attempting to change the basic infrastructure like Poland. Energy policy and security are crucial, particularly during times of crisis such as the war between Russia and Ukraine. The Hungarian PM, Viktor Orbán, has emphasized the importance of maintaining energy stability and security in the past, as it is closely linked to a well-functioning economy. Therefore, Budapest followed a pragmatic path. Cheap energy and manpower can boost both the employment rate and competitiveness, which means increasing foreign investment and technology transfer. However, the ongoing war, combined with pressure from both Russia and the West, sanctions, and a global energy shortage, has forced the Hungarian decision-makers to reconsider their strategy. Therefore, the energy sector is key to Hungary’s geopolitical thinking.