Serbia’s sole oil refinery, which supplies about 80 % of the country’s fuel, faces a possible shutdown because of U.S. sanctions targeting its majority Russian ownership. The Petroleum Industry of Serbia (NIS) has been under sanctions since October 9, part of Washington’s crackdown on Russia’s energy sector after the 2022 invasion of Ukraine. Energy Minister Dubravka Djedović Handanović assured that the Pančevo refinery would continue operating without disruption until November 25, but experts warn that replacing such a large share of the market with imports will be difficult.
To mitigate the crisis, the Serbian government has increased its fuel reserves and contracted additional import volumes for December. Nevertheless, economist Goran Radošević cautioned that relying solely on imports is not sustainable, saying, “You can prolong the agony for a few months through additional imports, but NIS will go bankrupt if it can no longer operate.” Negotiations are underway between Serbian officials and potential buyers; President Aleksandar Vučić said three possible buyers are being considered. The company’s majority stake—51 % since 2008—is held by Gazprom and Gazprom Neft.
Serbia has asked for a temporary exemption from the sanctions while talks continue, but Washington has not yet responded. A state takeover is a possible option, though Vučić has been hesitant because of his close ties with Moscow. Instead, he has offered to purchase the stake at above‑market rates if negotiations fail. Serbia’s reliance on cheap Russian gas and its refusal to sanction Moscow over the war in Ukraine have further complicated the situation.
As the deadline for the refinery’s potential shutdown approaches, the Serbian government is racing to find a solution to avoid an energy crisis. The outcome of the negotiations will have significant implications for Serbia’s energy security and its relationship with Russia, and a swift resolution is urgently needed to prevent a potentially devastating shutdown of the refinery.
Comments are closed for this story.