BUDAPEST – Prime Minister Viktor Orban of Hungary has vehemently opposed a proposed European embargo on Russian oil, saying it would destroy his country’s economy. Other potential victims of such a ban would be close to his heart: his populist campaign promises and a financial gravy for culture fighters in Europe and the United States.
Both were fueled by Hungarian gains from Russian crude. Hungarian energy conglomerate MOL, one of the central European country’s largest and most profitable companies, was brimming with cash thanks to cheap supplies of Russian oil and gas.
More than $65 million of that will go to a privately run educational foundation that hosted Fox News host Tucker Carlson at a festival of right-wing experts in Hungary last year. It has also provided stipends and scholarships to conservative Americans and Europeans seeking a safe haven from what they deplore as the spread of the “cancellation culture” at home.
Some of them were featured this week at the first Hungarian edition of the Conservative Political Action Conference, or CPAC, a gathering of the right wing of American politics. The event, at which Mr. Orban delivered the keynote speech, opened in Budapest on Thursday under the slogan “God, Homeland, Family”.
Hungary has for years served as a beacon for foreign conservatives who admire Orban’s hostility to immigrants, LGBTQ rights, George Soros and liberals in general. However, the Russian invasion of Ukraine has put a lot of pressure on that role, causing some conservatives to outrage Mr Orban’s friendship with the Kremlin.
It has also threatened to undermine Mr Orban’s pact with voters, which gave his Fidesz party a landslide victory in the elections last month on the promise that cheap energy from Russia would prevent gas and utility prices from skyrocketing as happened elsewhere in Europe. †
A steady supply of Russian energy has become such a central part of Orban’s economic and political model that ending it is “a common thread for him,” said Andras Biro-Nagy, founder and director of Policy Solutions, a research group in Budapest. “Russian oil and gas are absolutely essential to his entire plan.”
This reliance has even alarmed some of its foreign fans who have taken paid positions at Mathias Corvinus Collegium, known as MCC, the educational foundation that benefits from the Hungarian energy company’s business with Russia. The foundation has a 10 percent stake in MOL, which relies heavily on supplies of Russian oil to feed its main refinery southwest of Budapest and another it owns in Slovakia.
“I’m very unhappy about Hungary’s position toward Russia in general, and energy specifically,” said Daniel Pipes, a conservative American scholar who has been awarded a paid “senior fellowship” by the foundation. “At the same time, I am very positive about the Hungarian position on immigration,” he said. “So I’m ambivalent. I don’t like the Russia policy and I like the immigration policy.”
Also unhappy is Poland, whose ruling party, Law and Justice, shares Mr Orban’s animosity towards liberals, but has been enraged by its persistent opposition to attempts by the European Union to ban Russian oil, Hungary and its failure to condemn Russian President Vladimir V. Putin.
Concerned that the Hungarian energy company is too tied to Russia, the Polish Senate passed a resolution in March that blocked a deal with the Polish state energy company that would have allowed MOL to acquire more than 400 Polish gas stations.
Bogdan Borusewicz, the opposition senator who made the move, said in an interview in Gdansk, the site of a major Polish refinery, that the war in Ukraine had made it dangerous to run a Hungarian company dependent on Russia on the market of his country.
“You could discuss this before the war,” he said, “but now it is impossible to have any illusions” about the loyalty of Mr Orban, whom he described as “Putin’s main ally in the EU”. For the LDC conglomerate, he said, “cooperation with Russia is a critical part of its business and even its very survival.”
MOL has declined interview requests but has emphasized in public statements the difficulty and cost of switching to non-Russian oil. The Danube Refinery, south of Budapest, has invested heavily for eight years to receive crude oil from other countries, which is generally more expensive, but still depends on Russia for 65 percent of its needs.
The Hungarian company reported a major increase in profits, warning in its annual financial report this spring that it was exposed to Russia through a minority stake in a small Russian oil company, BaiTex, and “the physical flow of crude oil through the transportation system in Russia and Ukraine.” ” That flow, it noted, was not limited “until now.”
Since then, the executive branch of the European Union has tried to shut it down.
That would be a serious blow, said Tamas Pletser, an oil and gas analyst at Este Bank in Budapest. MOL, he said, has so far benefited from a wider price differential between European Brent and the cheaper Russian crude.
“They are making an additional $10 million a day from this current situation, which is based on the Russian supply and Russian invasion of Ukraine,” Mr Pletser said.
Many millions of dollars have gone to the Mathias Corvinus Collegium and two other nominally independent foundations, which together own 30.49 percent of the energy company and are the largest shareholders. The shares used to be state-owned, but Mr. Orban donated them, along with other valuable assets, to the foundations two years ago as part of what he said was an effort to overhaul education, but those critics legalized theft. The chairman of MCC is Balazs Orban, who is also the prime minister’s political director (though not related).
Zoltan Szalai, general manager of the foundation, acknowledged in an interview: “MOL has been very good for us this year.” The dividend money MCC received from MOL this year is more than double the annual budget.
Mr. Szalai said his foundation should be able to deal with a decline in the power company’s profits if Mr. Orban loses his battle to keep Russia’s crude oil flowing. “We think in the long term and MOL is a very good and serious company,” said Mr. Szalai.
When it comes to banning Russian oil, “it is not true that Hungary has no choice,” said Piotr Wozniak, Poland’s economy minister in a previous Law and Justice government and long-time energy manager. “It won’t be cheap or easy, but it’s not impossible.”
But, he added: “The question is whether Hungary wants to make this choice.”
Making that choice particularly difficult is Mr Orban’s winning promise last month to keep energy prices in check through government-imposed price caps.
War between Russia and Ukraine: important developments
You said. The Senate overwhelmingly approved a $40 billion aid package for Ukraine, bringing total US investment in the war to $54 billion in just over two months. The move is the latest evidence of the bipartisan support on Capitol Hill for helping Ukraine fight Russia.
Shortly before the invasion of Ukraine, Mr. Orban traveled to Moscow to meet Mr. Putin and made sure Hungary could count on supplies of Russian natural gas.
Moscow abruptly stopped deliveries to Poland and Bulgaria last month, but is still delivering to Hungary. Any suspension, either by Russia or as a result of Western sanctions, would force Hungary to buy more expensive supplies on the market.
During the keynote address at CPAC on Thursday, Mr. Orban mentioned the war in Ukraine, citing Russia as the aggressor but mainly focusing on advising conservatives on how to be politically successful. “The first thing,” he said, “is that we have to play by our own rules.”
Mr. Carlson, the Fox News host who has sided with Russia in its war with Ukraine, sent a short video message in support of the conference.
Most speakers avoided the Ukraine issue, although one, Gavin Wax, a conservative New York-based commentator, complained of tens of billions of dollars spent supporting Ukraine and “non-stop media propaganda pushing for World War III” with Russia.
The main organizer of the event is the Fundamental Rights Center, a Hungarian government-funded organization that says it is fighting the “relentless attack” on “Judeo-Christian culture, patriotism, sovereignty, the family, the created nature.” of husband and wife and our devotion to life.”
The center initially said it was working on CPAC’s Budapest event with Mathias Corvinus Collegium. However, the foundation denied helping organize CPAC, though it said it supported its aims.
Mr Szalai, the general manager of the MCC, denied that his foundation was pushing any political agenda, saying in an interview that its mission was to promote “classic common sense”.
“To say we are far right is not fair,” he added.
Mr. Orban’s critics say MCC has established itself as what Mr. Biro-Nagy of Policy Solutions calls “one of the crown jewels of Orban’s mission to create conservative, cultural hegemony.”
Among the foreign culture warriors named this year’s “guest instructors” by Mathias Corvinus Collegium was Rod Dreher, an American writer who has praised Hungary’s tough stance on Muslim immigrants.
Mr Dreher said he was “not disturbed in the least” that MCC was taking advantage of Russian oil. However, he said his own wages came from another Hungarian government-funded entity.
“I deplore the invasion of Russia and hope Ukraine wins, but I do not share this horror of Russia and the ties to Russia that the ruling class in the US and Western Europe do have,” he said.