One month after U.S. sanctions against the Petroleum Industry of Serbia (NIS) took effect, Moscow has responded by signaling that it is prepared to give up control of the company in order to have the embargo suspended. The reaction was expected, as Serbian officials have repeatedly warned that the Pancevo Oil Refinery has crude oil supplies only until 25 November, leaving little time to resolve the impasse.
According to Russian media sources, Moscow has proposed to the U.S. Office of Foreign Assets Control (OFAC) that a third party assume “control and influence” over NIS—an arrangement they believe could justify suspending sanctions. Whether Washington accepts the offer remains the decisive factor.
There is cautious optimism in Serbia, as the U.S. has recently granted exemptions to other countries under similar circumstances. The U.S. confirmed that Hungary received a one-year exemption on oil and gas deliveries, in exchange for commitments to diversify energy supply and purchase U.S. LNG worth around USD 600 million.
Bulgaria also adapted domestic legislation to remove Russian control over the Lukoil refinery in Burgas, enabling the appointment of a special administrator who may oversee its sale.
Similarly, Rosneft Germany was exempted from recent U.S. sanctions after Washington determined that the company was no longer under Russian operational control, even though ownership formally remains in Russian hands.
Vučić: Serbia will accept any OFAC requirement
President Aleksandar Vučić stated that Serbia is ready to meet any demand from OFAC regarding the future of NIS but warned that “time is running out.”
“We said we would accept anything they request, but they must know that time is short. No one should doubt my determination to protect Serbia’s interests,” Vučić said.
He added that the government is working to secure sufficient oil supplies: “Responsible people worry about reserves, but we will manage.”
Russia’s maneuvering
To avoid sanctions linked to majority ownership, Gazprom Neft transferred 5% of its shares in NIS to its parent company Gazprom in February, reducing its stake to 44.85%. Gazprom’s share rose to 11.3%. Since Washington did not recognize this as a genuine reduction of Russian control, another restructuring followed: Gazprom transferred nearly all of its remaining shares to JSC Intelligence, a St. Petersburg-based company controlled by Gazprom Capital LLC.
Despite these moves, NIS has been under full U.S. sanctions since 9 October, hampering operations as EU and U.S. companies—particularly banks—are unwilling to work with it for fear of secondary sanctions.
Can Russia’s proposal solve the NIS problem?
Serbian energy experts believe the proposal is not sufficient to lift sanctions entirely but could be enough for a temporary suspension. A third party—either a foreign company or even the Serbian state—could be appointed to run NIS during such a suspension.
Energy minister Dubravka Đedović Handanović confirmed that Russia has formally asked OFAC to extend NIS’s operating license based on negotiations with a third party, and that Serbia supports the request.
According to energy expert Željko Marković, Russia is not offering to give up ownership, only management control. He considers it realistic that the U.S. could accept this as a temporary measure, allowing OFAC to suspend sanctions for several months but not remove them entirely.
Marković also raised the question of how NIS profits would be handled if sanctions are suspended. He believes profits would likely remain “frozen” on NIS accounts as long as Russia does not exercise control.
Energy expert Vojislav Vuletić shares the view that OFAC may accept the Russian proposal, noting that Russia has demonstrated willingness to comply with demands and that NIS sanctions harm Serbia far more than Moscow. Since NIS is a minor part of Gazprom Neft’s global operations, he argues there is a strong case for exempting the company from sanctions.
