The United States and United Kingdom are finalizing plans to impose sanctions on Serbia’s Oil Industry of Serbia (NIS) due to its majority Russian ownership. Serbian President Aleksandar Vučić confirmed the impending sanctions, stating that they would halt the flow of oil through the JANAF pipeline, Serbia’s sole crude oil supply line. The pipeline, originating from Croatia’s Krk Island, supplies oil to the Pančevo refinery near Belgrade.
Vučić revealed the sanctions would take effect on January 1, describing them as a geopolitical maneuver aimed at pressuring Serbia to impose sanctions on Russia. He emphasized that Serbia had not yet received formal documentation from the United States but had been informed through official and intelligence channels.
The JANAF pipeline is critical to Serbia’s energy infrastructure, and the sanctions threaten to disrupt the country’s oil supply during the winter months. Vučić noted that alternative options are limited, as Serbia’s project to construct an additional pipeline with Hungary is still in its early stages. While Serbia also imports fuel, the sanctions would significantly impact domestic energy security.
The ownership structure of NIS has been a point of contention. The company is 50% owned by Gazprom Neft, 6.2% by Gazprom, and 30.1% by the Serbian government. In 2022, Gazprom Neft reduced its stake to avoid EU sanctions, but this was insufficient to shield the company from US and UK measures.
Vučić suggested that Serbia might consider reducing Russia’s combined stake in NIS to below 50% to mitigate the sanctions' effects, but such a move would require delicate negotiations with both Western nations and Russian stakeholders.
The US Embassy in Serbia stated that changes in NIS’s ownership could bring “peace and prosperity” to the country. It accused Russian stakeholders of using NIS profits to fund the war in Ukraine rather than investing in Serbia’s future.
NIS, Serbia’s most profitable company and a significant contributor to its state budget, has assured that current operations remain unaffected and that fuel supplies to petrol stations are stable. However, the announcement of the sanctions has already caused market jitters, with NIS’s stock value dropping sharply on the Belgrade Stock Exchange.
As Serbia faces mounting pressure to navigate its relationships with both Russia and the West, Vučić underscored his reluctance to discuss imposing sanctions on Moscow. He characterized the situation as particularly challenging given the onset of winter and the sanctions' economic implications.
