The Pančevo Oil Refinery has begun a temporary shutdown of its production units due to a lack of crude oil supply, a result of U.S. Treasury sanctions imposed on Naftna Industrija Srbije (NIS), which is majority Russian-owned. This marks the 57th day since the sanctions came into effect.
Even if the U.S. OFAC issues a license allowing NIS to resume operations, experts note that it would take at least two weeks to restart production at the refinery.
Tapered shutdown and “warm circulation” phase
Since November 25, the refinery has been in a “warm circulation” phase, designed to keep production systems in a ready state so that operations can resume quickly once crude oil is available. This initial phase of the shutdown ensures that all refinery units remain prepared to restart efficiently.
NIS stated that the shutdown is being conducted according to planned maintenance procedures, in full compliance with Serbian laws, internal company regulations, and strict environmental, safety, and occupational health standards. The company emphasized that domestic fuel supply continues without interruption, supported by pre-stocked reserves.
Government response and U.S. licensing
President Aleksandar Vučić confirmed that Serbia has granted permission to shut down the refinery, but has not yet received a response from the U.S. government regarding the licensing of NIS operations.
Transition from warm to cold circulation
Refinery experts caution that the refinery is now moving from warm to cold circulation, which involves a more extensive shutdown and increases the costs and risks of restarting. Miloš Zdravković, an energy specialist, noted that modern refineries cannot operate safely at 10% capacity; the technical minimum is typically 40–60% of capacity. Operating below this threshold can destabilize processes, damage catalysts, release uncontrolled sulfur gases, and create environmental hazards such as coke and polymer buildup.
The shutdown process itself takes 48–72 hours and requires inerting all systems with nitrogen, including columns, reactors, furnaces, and storage tanks, to prevent explosive atmospheres and avoid permanent equipment damage.
Types of refinery conservation
Željko Marković explained that there are two approaches to conserving a refinery:
- Nitrogen preservation – filling pipelines with nitrogen to prevent corrosion. This method can last up to three months, allowing the refinery to restart within about a month.
- Complete shutdown – if the refinery is fully shut down for more than three months, restarting can take four months or longer.
Marković warned that a prolonged halt could lead to financial and operational complications, including the potential freezing of company accounts and the risk of NIS becoming non-operational and facing bankruptcy.
