U.S. Sanctions on Russian-Controlled Serbian Oil Firm Take Effect

The United States has imposed sanctions on Serbia's primary oil supplier, the Petroleum Industry of Serbia (NIS), which is majority-owned by Russia's Gazprom Neft.

These measures, enacted in January as part of broader efforts targeting Russia's energy sector following the 2022 invasion of Ukraine, officially took effect on Thursday after repeated delays.

NIS, which operates Serbia's sole oil refinery and distributes fuels across the country, stated it had not received an extension of a special license from the U.S. Department of the Treasury.

The company affirmed it possesses sufficient crude oil reserves for processing and that petrol stations remain fully stocked with petroleum products.

Serbia relies almost entirely on Russian gas and oil, delivered via pipelines through neighboring countries like Croatia.

This dependency has placed the Balkan nation in a precarious position, balancing Western integration aspirations with vital energy ties to Moscow.

Impact on Daily Operations

The sanctions are expected to disrupt foreign payment systems at NIS fuel stations, with the company confirming that international bank cards will cease functioning.

Payments will be limited to domestic cards or cash, potentially complicating transactions for users of foreign-issued cards.

President Aleksandar Vucic warned on Monday that the measures would deliver a serious blow, particularly to the banking sector.

“There is no bank in the world that would risk violating US sanctions,” Vucic said.

He described the consequences as “extremely dire” and affecting every citizen, while urging calm and assuring the public that the government is prepared.

Vucic noted ongoing discussions with U.S. and Russian officials, including potential divestment of Russian stakes in NIS.

A central NIS station in Belgrade operated quietly on Thursday, with retail director Bojana Radojevic emphasizing normal sales and no purchase limits.

“Our sales are operating as normal. There are no restrictions when it comes to the quantities customers can purchase,” she said.

Croatian pipeline operator Janaf anticipates an 18-million-euro loss this year due to the fallout.

Geopolitical Ramifications

Analysts view Serbia as unintended collateral in the U.S.-Russia rivalry over energy influence.

Serbian economic analyst Aleksandar Milosevic observed that Russian reluctance to divest NIS stakes has prolonged the crisis.

“Had the Russians agreed to sell their share, none of these things with sanctions would have happened,” Milosevic said.

Ownership details reveal Gazprom Neft holds 45 percent, with the Serbian state at nearly 30 percent and the rest by minorities; Gazprom recently shifted an 11 percent stake to a linked firm.

Despite pursuing European Union membership, Serbia has declined to adopt Western sanctions against Russia, citing essential gas supplies—a contract expiring soon amid renewal talks.

Vucic, a pro-Russian leader in power for over a decade, confronts domestic unrest from 11 months of protests triggered by a deadly railway station collapse that killed 16.

The incident, tied to a Chinese-funded project, has fueled accusations of corruption and nepotism.

As winter approaches, the sanctions threaten gasoline and heating oil availability, heightening economic vulnerabilities in the region.