Serbia’s energy sector faces uncertainty following the European Union’s October decision to gradually ban imports of Russian natural gas, a move that will take full effect on 1 January 2028. The proposed EU regulation introduces a phased ban, with transitional measures for existing contracts. However, the document does not clearly specify how Russian gas transit to non-EU countries will be regulated, leaving Serbia’s future supply routes in question.
Serbia relies on Russian gas for over 80% of its needs. The previous ten-year contract with Russia expired in May 2025, and the short-term arrangement extended only until the end of 2025, far below Serbia’s expectation for a three-year deal. Serbia currently imports gas mainly through Bulgaria via the Balkan Stream, a branch of the Russian-Turkish TurkStream pipeline.
Serbia’s Minister of Mining and Energy, Dubravka Đedović Handanović, warned on 20 October that Serbia is in a “very difficult and almost inescapable situation,” noting that Bulgaria may block Russian gas flows, which would directly impact Serbia. The Bulgarian Energy Minister, however, indicated that EU legislation does not automatically apply to Serbia and that a solution is being sought to allow gas delivery to Serbia while preventing transit into EU member states.
Serbia’s annual gas consumption is about two billion cubic meters, with storage holding roughly 400 million cubic meters. Without Russian gas, Serbia could face serious shortages, impacting industrial production, district heating, and household heating.
In addition to Russian imports, Serbia receives smaller volumes of gas from Azerbaijan—up to 400 million cubic meters annually under agreements through 2026. Domestic production meets only a small fraction (6.7%) of national demand. Serbia is also developing alternative supply routes, including a gas pipeline from Azerbaijan via Bulgaria and Greece, partially funded by EU grants, and a planned joint pipeline with Romania, expected to be operational by 2027.
The situation is further complicated by the U.S. sanctions on Naftna Industrija Srbije (NIS), a Russian-majority owned company and Serbia’s main fuel supplier, imposed in October 2025. These sanctions aim to prevent Russian energy revenues from funding the war in Ukraine. Serbian authorities have ruled out nationalizing NIS to avoid sanctions.
The EU decision reflects a broader strategy, agreed upon in 2022 after Russia’s invasion of Ukraine, to reduce dependence on Russian fossil fuels. While EU oil imports from Russia have fallen below 3% in 2025, Russian gas still accounts for an estimated 13% of EU imports, valued at over €15 billion annually. The EU cites repeated disruptions in Russian gas deliveries since 2006, including significant reductions since March 2022, as justification for the phased ban.
Short-term EU contracts concluded before 17 June 2025 can continue until 17 June 2026, while long-term contracts may run until 1 January 2028. Serbia, lacking a long-term agreement with Russia, remains highly exposed, highlighting the urgent need for diversification of gas supply and alternative infrastructure.
