The oil market in our region operates largely as a unified system, meaning that any disruption in one country will have ripple effects on the surrounding nations. Tomislav Mićović, Secretary General of the Association of Oil Companies of Serbia (UNKS), recently stated that the U.S. sanctions targeting Serbia’s oil industry (NIS) would have significant consequences. If implemented, these sanctions would result in the Pancevo refinery no longer supplying around 3.5 million tons of oil derivatives per year to the market. This shortfall would need to be addressed, Mićović explained in an interview with Biznis.
The Pancevo refinery, with a capacity to process approximately five million tons of oil annually, plays a crucial role in the regional supply chain. Mićović emphasized that if this refinery were to halt its operations for any reason, the missing volume of oil derivatives would need to be sourced from other countries in the vicinity. Despite this, he reassured that alternative supply sources would not significantly impact the final prices of oil derivatives.
However, Mićović noted that it would not be possible to make up for the loss of Pancevo’s production by increasing output at other refineries in the region. Instead, the deficit could be addressed through direct imports from Mediterranean or Black Sea ports, particularly from Constanta. Other ports such as those in Kopar, Rijeka, Ploče, Durres, and Thessaloniki could also be used to help fill the gap in supply.
For landlocked countries, river transport is key. Therefore, Constanta would be the most practical option, as oil could be transported along the Danube River to reach the region.
On January 10, the U.S. Treasury Department imposed sanctions on Serbia’s oil industry as part of a broader set of measures against Russian interests linked to the ongoing war in Ukraine. Gazprom and Gazprom Neft hold a 56% stake in NIS, and the U.S. demanded the complete withdrawal of Russian capital from the company. As a result, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added NIS to its sanctions list due to its Russian ownership.
Although the sanctions have been delayed twice, NIS has received a temporary license to continue operating until April 28. This delay was granted in response to requests from the Serbian and Hungarian governments, as well as from JANAF, the Croatian company that operates the oil pipeline.
Mićović also addressed the uncertainty created by U.S. tariffs on the global oil market. He pointed out that this uncertainty was already evident on April 2, when major oil derivatives traders paused their purchases due to concerns about whether they would be able to resell the products.
The announcement of U.S. tariffs on imports from major trading partners caused a sharp decline in oil prices. The uncertainty surrounding these tariff policies immediately pressured the oil market. Investors reacted swiftly, fearing that economic slowdowns would reduce crude oil demand, and market sentiment became more pessimistic. As a result, by April 3, the price of Brent crude oil dropped by approximately 3.2%, while U.S. West Texas Intermediate (WTI) oil lost 3.3% of its value.
