Sanctions Hit Serbia’s Only Oil Refinery as Russian Ownership Triggers Shutdown Threat

Serbia’s only oil refinery has come under U.S. sanctions due to its Russian ownership, raising the possibility that operations may be halted as early as Tuesday, according to Serbian officials.

As part of Washington’s broader sanctions on Russia’s energy sector, Serbia’s Petroleum Industry (NIS) has been affected since last month. The development has left Belgrade scrambling to find alternatives to prevent an impending energy crisis.

Energy Minister Dubravka Đedović Handanović had earlier stated that the Pančevo refinery would be able to operate without obstacles until 25 November. However, with the deadline reached, officials now warn that a shutdown may be imminent.

The Serbian government said it has stockpiled fuel in preparation for the closure and secured new import deals for December.

Experts, however, caution that imports alone cannot sustain NIS.
Belgrade-based economist Goran Radosavljević noted that NIS has historically produced around 80% of Serbia’s total fuel demand, with imports covering the remaining 20%.

Replacing such a large share through imports will be extremely difficult, he warned. Increased imports might meet demand for a few months, but if NIS cannot continue operations, the company could face bankruptcy.

Serbia sold 51% of NIS to Russia’s Gazprom and Gazprom Neft in 2008 for €400 million (USD 462 million) as part of a broader agreement. The Serbian state retains around 30% of the shares, with the rest held by minority shareholders.

Serbian officials have repeatedly stressed the need to find a solution for NIS, saying that if no alternative emerges, state takeover is becoming increasingly likely.