The Serbian energy industry is facing a critical situation as decades of neglect in terms of investments, along with geopolitical challenges, have led to mounting pressures. One of the key problems is that Serbia’s oil system remains almost entirely under Gazprom’s control, and with the imposition of U.S. sanctions on Gazprom in January 2023, Serbia is left in a precarious position. The Serbian government has requested a delay in the implementation of these sanctions, but sources from New Economy reveal that the security of supply could soon be at risk.
Banks in Serbia have set a deadline of February 22, when they will stop conducting transactions with the state-owned oil company NIS and close its accounts. This could have dramatic consequences for NIS and its operations, including the possible closure of NIS gas stations across the country.
If NIS is unable to continue its operations, gas stations managed by other companies such as OMV, MOL, and Shell will remain open, and these companies have even pledged to increase fuel deliveries to Serbia. However, NIS controls approximately 80% of the Serbian oil derivatives market and about 50% of retail sales. The termination of NIS’ operations would cause significant disruptions in the fuel market.
Despite Serbia’s attempts to diversify its energy sources over the last two years, energy experts have long warned of the country’s dependence on a single supplier. Unfortunately, investments in the energy sector have come too late, and the country is now facing a security crisis in the energy field due to sanctions and geopolitical tensions.
JANAF, the Croatian oil pipeline supplier to NIS, is also trying to navigate the sanctions, submitting a request to the U.S. Office of Foreign Assets Control (OFAC) for a license to continue transporting oil to NIS. The hope is to reach a compromise that ensures a continued supply of oil to Serbia.
Experts have raised concerns that there may not be significant interest from U.S. companies in acquiring NIS, and while MOL has political motives, the more likely scenario could involve players from the Middle East or Russia potentially maintaining control over the company.
NIS was sold to Gazprom in 2008 for EUR 400 million, but the imposition of sanctions means that both the company and Serbian politicians, including ministers Aleksandar Vulin and Nenad Popović, are now directly affected.
As tensions continue, the Serbian government faces a critical decision on how to secure the country’s energy future.
