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The United States has granted a majority Russian-owned Serbian oil company a temporary reprieve from sanctions imposed over Moscow’s invasion of Ukraine, a Serbian minister said Wednesday.
Washington’s measures against the Petroleum Industry of Serbia, or NIS, part of its broader crackdown on Russia’s energy sector, forced the shutdown in early December of Serbia’s only oil refinery. The Pancevo facility supplies about 80% of the Balkan country’s fuel needs.
The sanctions have had a significant impact in Serbia, a close Kremlin ally and one of the few European countries that has not imposed sanctions on Russia over the war in Ukraine.
“NIS has obtained a licence from U.S. OFAC (the Office of Foreign Assets Control) allowing it to continue operations until January 23. This means that the Pancevo refinery will be able to resume operations after 36 days,” Serbian Energy Minister Dubravka Djedovic Handanovic said in a statement posted on Instagram.
The reprieve will allow the Pancevo refinery, located near the capital Belgrade, to resume refining crude oil, easing pressure on Serbia, which has relied on its fossil fuel reserves to meet domestic demand since the shutdown.
“We have achieved what seemed almost impossible. We will safeguard our energy security, as we have done so far,” Handanovic said.
After nine months of successive delays, Washington imposed sanctions on NIS on Oct. 9, requiring the full exit of Russian shareholders and blocking crude supplies to the refinery.
Negotiations over a potential sale have dragged on, with analysts warning the refinery’s closure could weigh on Serbia’s economic growth and threaten thousands of jobs.
NIS employs about 13,500 people and contributed more than 2 billion euros ($2.5 billion) in tax revenue, or nearly 12% of Serbia’s national budget, according to the company’s annual report.
NIS is 45% owned by Gazprom Neft, which is subject to U.S. sanctions. Its parent company, Gazprom, transferred its 11.3% stake in NIS in September to another Russian firm, Intelligence. The Serbian state owns nearly 30% of NIS, with the remainder held by minority shareholders.
Shortly before Handanovic’s announcement, President Aleksandar Vucic said on social media that he expected to announce “phenomenal political news” soon, without elaborating.
According to Serbian public broadcaster RTS, Hungarian Prime Minister Viktor Orban was involved in discussions earlier Wednesday between Vucic and the U.S. State Department. Hungarian energy company MOL is reportedly in talks to buy the Russian-held stake in NIS.
Meanwhile, Croatian pipeline operator Janaf, which had halted crude deliveries to the Pancevo refinery because of the sanctions, said it had been informed by OFAC of the temporary reprieve.
The decision “allows us to continue implementing our agreement with NIS on oil transportation” until Jan. 23, the company said. Janaf and NIS have a crude transport contract valid through the end of 2026, covering up to 10 million tonnes.
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