Experts warn NIS crisis threatens Serbia’s long-term energy stability despite short-term fuel supply security

The Serbian Government held an emergency session regarding the situation at Naftna Industrija Srbije (NIS) following U.S. sanctions. Experts say there will be no fuel shortages, but warn that the long-term stability of the oil market and future prices are at risk.

Fuel supply in the short term

Bojan Stanić from the Serbian Chamber of Commerce stated that:

• Serbia can rely on reserves and increased imports to avoid shortages.
• After crude oil stopped arriving through the JANAF pipeline, the refinery’s ability to continue production is limited.
• Domestic crude oil covers only 10–15% of refinery needs.
• Imports of oil products are already increasing, ensuring market supply.

Financial consultant Vladan Pavlović warned that the Pančevo refinery can operate only 8–10 more days, as it needs 10,000 tons of crude oil per day. Combined reserves and imports may cover December and January, but if the refinery stops, dependence on imports will sharply rise, affecting the entire economy.

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Economic and market impact

Stanić emphasized that the functioning of the refinery is crucial because:

• NIS covers around 80% of Serbia’s fuel market.
• The crisis impacts fertilizer production, transport, aviation, and overall industry.
• NIS has slipped into losses due to sanctions and foreign partners’ fear of secondary U.S. sanctions.

The situation affects the state budget, as NIS contributes around 10% of total budget revenues and represents 4% of GDP. Fuel prices are already under pressure due to the increased share of imports.

Possible solutions for NIS

Experts point to two main scenarios:

1. Sale of the Russian stake, if the U.S. Office of Foreign Assets Control (OFAC) approves the transaction.
2. Nationalization (likely under another term such as temporary management) if OFAC refuses permission.

Stanić said nationalization is the least desirable option and should be “the last resort.”
Possible buyers could include European or Asian companies, with MOL mentioned as a realistic candidate.

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Pavlović added:

• Serbia currently does not have the funds to buy out the Russian stake.
• The state would need to issue bonds or take a bilateral loan.
• A reasonable price would be up to €2 billion; anything beyond that would be excessive.

Broader implications

Stanić and Pavlović agree that:

• Serbia must diversify oil supply routes and reduce dependence on any single source.
• The current crisis is manageable, but prolonged sanctions would affect all economic sectors.
• Maintaining steady fuel supply is critical to avoid disruptions in transport, production, and daily life.