Naftna Industrija Srbije has reported a sharp recovery in first-half earnings, but the improvement has arrived at the moment when the company’s legal ability to operate has again become the most important short-term risk to Serbia’s fuel market.
NIS generated net profit of RSD 9.8 billion during the first six months of 2026, reversing a loss of RSD 3.6 billion in the corresponding period of last year. Earnings before interest, tax, depreciation and amortisation reached RSD 35.1 billion.
The recovery was supported by financial discipline, cost controls, higher crude prices and the use of lower-cost inventories accumulated earlier. Average Brent crude stood at $92.60 a barrel during the first half, compared with $71.70a year earlier. That price increase supported the value of inventories and upstream production, although it also raised the replacement cost of crude processed by the Pančevo refinery.
Operating cash flow reached RSD 16.6 billion, while capital expenditure amounted to RSD 11.8 billion. NIS calculated public-revenue liabilities of RSD 101.4 billion, underlining the company’s importance not only to energy supply but also to Serbia’s fiscal revenues. The group produced 554,400 tonnes of oil equivalent, processed approximately 1.6 million tonnes of crude and semi-finished products and sold around 1.4 million tonnes of petroleum products.
Those operational figures would normally frame a relatively straightforward earnings-recovery story. The sanctions regime surrounding NIS makes them secondary. The US Office of Foreign Assets Control licence permitting the company to continue importing, refining and trading was valid through 31 July 2026. NIS submitted another application on 27 July, requesting permission to continue operating without interruption after the deadline.
At the time of publication, NIS’s public announcements continued to show the existing licence expiring on 31 July, while the new application remained the latest disclosed step. The repeated use of short extensions has prevented an immediate disruption, but it has left suppliers, banks, insurers, transport companies and state institutions working around rolling regulatory deadlines rather than a permanent ownership solution.
The timing is particularly difficult because alternative fuel-import routes are under pressure. Fuel imports reached only 25 per cent of Serbia’s planned July volume after exceptionally low Danube water levels restricted barge capacity. Vessels were operating at only 30–40 per cent of normal cargo capacity, forcing companies to use more expensive road and rail transport.
The Pančevo refinery, with annual capacity of approximately 4.8 million tonnes, normally covers about 80 per cent of Serbia’s fuel demand. Serbia held around 269,000 tonnes of diesel in strategic reserves, but reliance on reserves would increase quickly during peak summer consumption if refinery operations or crude deliveries were interrupted.
The immediate sanctions issue is tied to NIS’s Russian ownership. Gazprom Neft held approximately 44.9 per cent, Gazprom around 11.3 per cent and the Serbian state 29.9 per cent, with the balance held by minority shareholders and employees. Hungary’s MOL entered a provisional agreement to acquire the combined Russian stake, while Serbia has indicated that it wants to increase its own holding by another five percentage points. Completion remains dependent on OFAC approval and the finalisation of the ownership and governance arrangements.
The earnings figures demonstrate that NIS remains financially and operationally capable of supplying the market. They do not remove the external legal constraint. A company can generate positive cash flow and maintain refinery throughput while still facing difficulties with international payments, insurance, shipping, crude procurement and counterparties when a sanctions licence expires.
The risk also extends beyond NIS itself. Refinery continuity affects road transport, agriculture, construction, mining, manufacturing and household inflation. Higher replacement costs for imported diesel would move through the economy rapidly, while a prolonged drawdown of strategic reserves would reduce Serbia’s protection against a subsequent regional supply disruption.
NIS’s RSD 9.8 billion profit recovery provides the company with a stronger financial buffer, but the determining variable remains outside its income statement. Serbia’s energy stability now rests on transforming a sequence of temporary US permissions into an approved ownership structure that allows the refinery, banks and crude suppliers to operate under durable rules.
