Russian President Vladimir Putin on Thursday signaled that Moscow is actively engaged in discussions with Serbia over the future of Naftna Industrija Srbije (NIS), a state-linked oil company caught in the crossfire of U.S. sanctions on Russian energy assets.
Addressing journalists at his annual press conference in Moscow, Putin said Russia “has ideas” for resolving the company’s future and expects Serbia’s “friendly leadership” to honor obligations under existing intergovernmental agreements. “Failure to comply raises fundamental questions about how Russia can continue to invest in the Serbian economy, and where guarantees of security lie if even intergovernmental agreements are disregarded,” he warned.
NIS, majority-owned by Russian state firm Gazprom Neft, has invested over $3 billion in Serbia and is one of the country’s largest taxpayers, contributing approximately 11% of the national budget, or around €2 billion in 2024, according to Serbian media. The company has modernized its refineries and retail network in recent years, making it a critical driver of both domestic energy supply and the wider Serbian economy.
U.S. sanctions, which took effect on Oct. 9 after multiple delays, have strained NIS operations, leading the Pančevo refinery to halt crude processing in late November due to restricted access to Russian crude. The sanctions aim to pressure Moscow over its war in Ukraine and include calls for Russia to divest its NIS stake. Potential buyers reportedly include Hungary’s MOL, Azerbaijan’s SOCAR, and the UAE’s ADNOC, although Vučić has rejected the idea of nationalization, insisting Serbia is “neither communist nor fascist.”
President Aleksandar Vučić said trilateral negotiations involving Russia, Serbia, and a potential new investor will begin next week in Belgrade. He indicated that a final decision on the company’s ownership could come as early as next week, underscoring Serbia’s desire to remain actively involved in shaping the outcome.
Energy analysts and industry observers stressed the importance of a cooperative investor that would maintain NIS’s operational standards and modernization trajectory. “It is crucial that the refinery resumes operations quickly and that NIS continues to operate as a modern, efficient enterprise,” said Jelica Putniković, editor at Energija Balkana. She highlighted that NIS’s network of extraction, refining, wholesale, and retail operations makes it a linchpin for Serbia’s broader economic stability.
The discussions also intersect with Serbia’s broader energy security strategy. Storage facilities in Banatski Dvor and Hungary remain well-stocked, allowing for short-term supply security during winter, but analysts warn additional purchases may be needed if upstream supplies are disrupted. Meanwhile, global oil prices have recently stabilized around $76 per barrel in London and $60 per barrel in the United States, though analysts caution that sustained low prices could undermine long-term investment in exploration and refining capacity.
The NIS case illustrates a broader geopolitical tension in the Western Balkans, where U.S. pressure to curb Russian influence collides with Serbia’s historical energy ties to Moscow. The outcome of these negotiations will have implications beyond Serbia, potentially affecting regional energy flows, fiscal stability, and Belgrade’s ability to navigate between Western sanctions and Russian interests.
Moscow’s engagement suggests that Russia seeks a solution that preserves NIS as a functioning asset while maintaining its strategic footprint in Serbia. For Belgrade, securing a cooperative investor and ensuring uninterrupted refinery operations are essential for both domestic energy security and broader economic resilience.
With trilateral talks set to begin in the coming week, industry watchers are closely monitoring developments, as the NIS case could set a precedent for handling Russian-owned energy assets under Western sanctions in the region.