Serbia’s Hopes for US Sanctions Relief Fade as Pressure Mounts on Russian-Owned Oil Firm
Serbia’s President has warned that his government may be forced to sever all ties with its largest oil company as US sanctions tighten around the majority-Russian-owned Petroleum Industry of Serbia (NIS).
Since October 9, Serbia’s only oil refinery—operated by NIS—has been unable to receive crude shipments after being targeted in Washington’s sweeping measures against Russian energy interests in response to the war in Ukraine.
Facing the possibility of an imminent refinery shutdown, President Aleksandar Vucic said the government may soon have no choice but to halt all financial transactions with the company should sanctions remain in force. NIS, which runs roughly 20 percent of Serbia’s petrol stations, would also be compelled to close its retail outlets.
“There will be enough fuel, but people will simply have to use other petrol stations,” Vucic said during a press conference, assuring citizens that the government has sufficient reserves to supply companies unaffected by the sanctions.
NIS will retain access to payment systems only until the end of the week—primarily to cover employee wages and settle outstanding obligations with suppliers. But Vucic warned that allowing the firm to continue operating under sanctions could expose Serbia to secondary penalties and “risk the complete destruction of the Republic of Serbia’s financial system.”
The National Bank of Serbia has also expressed deep concern over the potential fallout of secondary sanctions.
According to trade ministry data, NIS controls 80 percent of the domestic fuel market, making the crisis particularly sensitive for Belgrade.
The Serbian government is awaiting Washington’s decision on its request for a sanctions waiver, while negotiations continue between NIS’s Russian shareholders and potential buyers.
“We cannot mislead our Russian partners, and we do not wish to mislead anyone with false good news, because such good news from Washington simply does not exist,” Vucic cautioned.
He had previously given a 50-day deadline for the sale of the company— with possible bidders in Hungary and the UAE—aimed at satisfying US demands for Russia’s divestment.
With talks dragging on, Serbian officials have hinted at a possible state takeover of NIS, despite earlier dismissing the option due to Belgrade’s historically close relationship with Moscow.
Meanwhile, Serbia is also negotiating a new natural gas supply deal with Russia, which currently provides about 90 percent of the country’s gas needs.
The existing contract expires at the end of December. Vucic said that if no agreement is reached by Friday, Serbia “will look elsewhere.”
