On January 10, 2025, the US government took decisive action to cut off revenue streams to Russia’s energy sector by imposing sanctions on over 200 individuals and entities, including major players like GazpromNeft and its subsidiaries. One such subsidiary, the Serbian oil company NIS, was directly affected by these sanctions.
Following the announcement, NIS issued a statement on January 14, after its shares were temporarily suspended from trading on the Belgrade Stock Exchange. The company confirmed that the US had sanctioned NIS and stated that it was carefully reviewing the situation. Despite these developments, NIS reassured the public of its commitment to maintaining stability in Serbia’s domestic oil derivatives market. The company emphasized that its fuel station network continued to operate smoothly and that its Pancevo oil refinery was functioning normally, supplying all required petroleum products to the market.
However, market analysts and industry experts are raising concerns about the potential long-term impact on regional oil supply security. Diesel fuel, in particular, is seen as a major area of vulnerability. In 2022, Serbia consumed 500 kilotons of gasoline and 2,300 kilotons of diesel. While neighboring countries can generally provide surplus gasoline to replace Serbia’s domestic production of 600 kilotons, the situation is more complicated when it comes to diesel. The region, excluding Greece, Bulgaria, and Italy, is facing a diesel supply deficit, and Serbia’s domestic production of 2,100 kilotons of diesel relies heavily on imports from outside the EU. This increases Serbia’s dependence on foreign sources and poses logistical challenges, particularly amid ongoing geopolitical tensions.
The imbalance between supply and demand for diesel is likely to drive up prices, exacerbating logistical and production costs. This, in turn, could negatively impact the competitiveness of regional industries, already struggling due to supply disruptions caused by the COVID-19 pandemic and the ongoing energy crisis fueled by the war in Ukraine. Moreover, rising fuel prices could increase living costs for citizens.
Despite these concerns, experts believe that the Croatian operator of the JANAF oil pipeline is not at immediate risk, even if Serbia fails to resolve Russian ownership in NIS within the 45-day deadline. NIS is a key partner for the Croatian company, and while the situation remains tense, the immediate threat to JANAF is not considered critical.
