In a significant development for Balkan energy security, the United States has provided a temporary sanctions waiver to Serbia's major oil company, Naftna Industrija Srbije (NIS), which is majority-owned by Russian entities. This reprieve, announced on Wednesday, allows the country's sole oil refinery to resume operations after a forced shutdown.
Sanctions Relief Secures Vital Fuel Supply
Serbian Energy Minister Dubravka Djedovic Handanovic confirmed the news via social media, stating that NIS obtained a license from the US Office of Foreign Assets Control (OFAC) permitting it to continue operations until January 23. This decision directly enables the Pancevo refinery, located near Belgrade, to restart its crude oil processing activities.
The refinery's closure in early December, triggered by Washington's sanctions on NIS as part of its crackdown on Russia's energy sector, had created a severe supply crisis. The facility supplies approximately 80 percent of Serbia's fuel needs, forcing the nation to dip into its strategic fossil fuel reserves to meet domestic demand. Minister Handanovic hailed the achievement, calling it a safeguard for the country's energy security.
Economic Lifeline and Ongoing Negotiations
The sanctions relief is a major economic reprieve for Serbia, a key Kremlin ally in Europe that has not imposed sanctions on Russia. The closure of the Pancevo refinery posed a serious threat, with analysts warning it could shrink Serbia's economic growth and endanger employment. NIS employs around 13,500 people and, according to its annual report, contributed over two billion euros in tax revenue, nearly 12% of the national budget.
The US sanctions, imposed on October 9 after nine months of delays, demanded the complete exit of Russian shareholders from NIS. Gazprom Neft owns 45% of NIS, while the Serbian state holds nearly 30%. Talks for the potential sale of the Russian stake are ongoing, with Hungarian energy firm MOL reportedly in negotiations. Hungarian Prime Minister Viktor Orban was also involved in discussions between Serbian President Aleksandar Vucic and the US State Department.
Regional Impact and Contractual Reprieve
The waiver has had immediate regional ripple effects. Croatian pipeline operator Janaf, which had halted crude supplies to Pancevo due to the sanctions, announced it received notification from OFAC about the reprieve. The company stated this allows it to continue implementing its oil transportation agreement with NIS until January 23. The two firms have a long-term contract for crude transport valid until the end of 2026, covering a total capacity of 10 million tonnes.
Shortly before the official announcement, President Vucic hinted at "phenomenal political news," suggesting the high-level efforts behind securing the waiver. The temporary license provides a critical window for Serbia to stabilize its fuel supply and for negotiations over NIS's future ownership to reach a conclusion, averting a deeper energy and economic crisis.
