Naftna industrija Srbije (NIS) is at a decisive moment, as its future hinges on resolving issues related to Russian ownership. If the company does not secure a U.S. license to operate, imposed after sanctions in early October, its entire business could be jeopardized. The National Bank of Serbia (NBS) has warned that it may suspend payment operations with NIS, which would severely affect both consumers and employees.
Currently, fuel payments at NIS and Gazprom pumps are limited to cash or Dina cards, as other payment methods are blocked due to sanctions. Even cash revenues cannot be fully utilized for company operations. Without payment processing, NIS cannot pay employees or conduct any financial transactions with other businesses.
Despite the risk, President Aleksandar Vučić announced on December 2 that Serbia will allow NIS to continue payment operations until December 7, enabling the company to pay salaries, sell fuel, and prepare employees for upcoming changes.
Pančevo Refinery production halt
The Pančevo refinery has entered a reduced production phase due to the lack of crude oil, a direct consequence of U.S. sanctions. Vučić described this as a “warm circulation” – production has slowed but is not fully stopped.
Deadline for Russian owners
Russian shareholders, including Gazpromneft (44.85%) and the Intelidžens fund (11.3%), have 50 days to sell their NIS shares. If they fail, Serbia plans to implement forced management and later offer the highest price to Russian partners. Serbia currently owns 29.87%, and small shareholders hold 13.98%.
Risks of secondary sanctions
Vučić warned that a suspension of payment operations could trigger secondary U.S. sanctions, impacting the entire Serbian banking and financial system. After December 13, Serbia will no longer supply fuel from strategic reserves to NIS and Lukoil, though other companies will continue to receive fuel until at least January 15.
The situation underscores the precarious position of NIS: the company is critical for the Serbian economy, but sanctions, ownership issues, and potential secondary U.S. measures pose serious operational and financial risks.
