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Serbia’s Oil Giant, Co-Owned With Russia, Faces US Sanctions as Exemptions Expire
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![Photo of Ivan Khomenko]( "Photo of Ivan Khomenko")
The United States has issued a one-month sanctions waiver for Naftna Industrija Srbije (NIS), a Serbian oil company majority-owned by Russian firms, marking the fifth and final extension, according to Serbian Energy Minister Dubravka Djedović Handanović.
The temporary exemption allows NIS to continue operations despite US sanctions on the Russian oil sector introduced on January 10, 2025.
According to Reuters on July 28, The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) had initially provided Gazprom Neft with 45 days to divest its ownership in NIS.
The latest waiver, issued following a request submitted by Serbia on July 18, extends the license until the end of August. Further extensions will not be granted, Minister Djedović Handanović confirmed.
The minister emphasized that Serbia’s priority is ensuring uninterrupted fuel supply and removing NIS from the OFAC sanctions list, stating that progress in US–Russia dialogue remains a key factor.
NIS is jointly owned by Gazprom Neft (44.9%), Gazprom (11.3%), and the Serbian government (29.9%). The company operates Serbia’s only oil refinery, located in Pančevo, near Belgrade.
Currently, the facility is supplied via the Adriatic pipeline through Croatia, but alternative supply routes are being explored, including a new connection from Hungary via the Russian “Druzhba” pipeline.
Hungarian Foreign Minister Péter Szijjártó stated in April that the future pipeline will allow Hungary to supply crude oil to the Pančevo refinery year-round, with an expected annual capacity of 4 to 5 million tons.
In March, NIS formally requested delisting from OFAC’s Specially Designated Nationals and Blocked Persons List. The Serbian government has expressed hopes for continued US understanding given NIS’s strategic role in the national energy sector.
Former US sanctions coordinator James O’Brien previously noted that Russian shareholders must fully divest from NIS. Serbian President Aleksandar Vučić has indicated that Serbia is prepared to buy out the Russian stake—estimated at around €700 million—if necessary, although Belgrade aims to avoid such a scenario.
NIS has stated that operations continue without disruption and that its fuel stations remain fully supplied. The company continues to monitor the situation and assess possible scenarios and legal implications. As of now, it reports no legal restrictions affecting its activities or those of its partners.
NIS is one of the largest vertically integrated energy companies in Southeast Europe, engaged in oil and gas exploration, production, refining, and retail. It employs approximately 14,000 people and contributes nearly 9% of Serbia’s annual budget revenue, operating a network of over 400 fuel stations.
Earlier, Bloomberg reported that the European Union plans to ban all new Russian gas contracts by the end of 2025 and fully phase out Russian gas imports by 2027 as part of a broader strategy to end dependence on Moscow’s energy.
