- Serbian President Aleksandar Vučić is trying to find a solution with Russia, but Moscow remains unyielding.
- Belgrade has offered to buy out Russia’s stake in NIS, but without success.
- The crisis surrounding NIS could intensify protests in Serbia and cast doubt on Vučić’s policy of fostering close ties with Russia.
By Nikolay Krastev
What independent Serbian energy experts had long warned of has finally happened. The United States has imposed sanctions on Serbia’s national oil company, NIS (Naftna Industrija Srbije), owned by Russia’s state gas giant Gazprom and its subsidiary Gazprom Neft.
The outgoing Biden administration placed NIS on Washington’s sanctions list at the end of 2024, citing “secondary risk” linked to its predominantly Russian ownership. The move effectively closed another channel financing Russia’s war in Ukraine through revenues generated by Russian energy companies outside Russia.
Fallout for Serbia
Serbian President Aleksandar Vučić warned that the sanctions would have serious consequences, starting with the banking sector and spilling over into the wider energy system. “No bank in the world will risk violating U.S. sanctions,” he said.
The company announced it expects foreign payment cards to “cease functioning” soon, with gas stations accepting only certain local cards or cash in dinars. Vučić assured citizens that Serbia has enough fuel for now: “We have sufficient quantities of gasoline, diesel, fuel oil – our reserves are full, all our depots are filled to capacity.”
According to Vučić, reserves include 342,000 tons of diesel, 66,000 tons of gasoline, and enough fuel oil to power the country’s energy company EPS for a year. But he admitted that discussions were under way about NIS’s future, including the possible withdrawal of Russian shareholders — a proposal that Moscow has so far rejected.
Economists in Belgrade warn that the impact could be vast. Goran Radosavljević said the sanctions could disrupt everything from finance to agriculture and even fuel supplies for Air Serbia. Banks, he added, would be forced to cut all transactions with NIS immediately to avoid being seen as cooperating with a sanctioned entity.
“We no longer have anything to talk about with the Americans,” Vučić said in a televised address. “The U.S. has done its job, and Europe will support the sanctions.” Shortly after, he met with Gazprom Neft chairman Alexander Dyukov in Belgrade.
Energy Minister Dubravka Đedović Handanović voiced concern that NIS had not presented a plan to deal with the crisis, though she insisted that gas deliveries from Russia would continue until year’s end.
The Ball in Moscow’s Court
Former Energy Minister Zorana Mihajlović said bluntly that “the ball is in Moscow’s court.” Russia, she argued, must decide what to do with its ownership stake in NIS — and its current position amounts to blackmail.
Russian ambassador Alexander Bocan-Harchenko called the sanctions “a purely political decision” unrelated to economics or energy. “Washington decided this long ago,” he told TASS, “and there’s nothing economic about it.”
Bocan-Harchenko added that Russia would not abandon Serbia. But Moscow has shown no sign of selling its stake in NIS. Observers note that Russia views the company as a strategic foothold in the Balkans, not a business to divest.
In 2008, Serbia’s government — then led by nationalist Prime Minister Vojislav Koštunica and moderate President Boris Tadić — sold NIS to Gazprom Neft for just €400 million, far below Deloitte’s valuation of €2 billion. The deal, steeped in gratitude for Moscow’s support over Kosovo and promises that the South Stream pipeline would pass through Serbia, cost Belgrade its most valuable energy asset.
NIS: The Link Between Belgrade and Moscow
Over the years, NIS became the key energy link between Serbia and Russia. The company now lies at the heart of the geopolitical clash between Washington and Moscow over Ukraine.
Earlier this year, Vučić unsuccessfully sought a meeting with U.S. President Donald Trump in Mar-a-Lago, later citing illness — only to fly to Moscow days later to attend the Victory Day parade. He later admitted that the new U.S. administration was unyielding and that the sanctions would be enforced after seven postponements.
Serbia, notably, remains the only European country that has not joined Western sanctions against Russia. Some analysts now argue that Moscow should “return the favor” by sparing Serbia from Washington’s measures. But as the saying goes, Moscow doesn’t believe in tears — least of all Serbian ones.
Searching for a “Creative Solution”
Belgrade is reportedly exploring unconventional ways to circumvent the sanctions. Analyst Miša Brkić wrote in the weekly Vreme that the government is considering creating a “ghost fleet” to transport crude oil via the Danube from Hungary to the NIS refinery in Pančevo — a Serbian version of the “shadow fleet” Russia uses to skirt Western restrictions.
Two influential businessmen close to Vučić have already registered tankers for river transport, he reported, possibly forming a large fleet to carry crude supplied by Hungary’s MOL.
Earlier this year, the same businessmen tried to discreetly buy Gazprom’s share in NIS, but the plan was reportedly exposed by Russian intelligence, prompting an angry rebuke from President Vladimir Putin: the stake, he reminded Vučić, “is not for sale at any price.”
The Crisis Spills Beyond Serbia
The sanctions have also hit Croatia’s JANAF, the Adriatic pipeline operator contracted to supply Serbia with 10 million tons of crude oil between 2024 and 2026. Zagreb has proposed buying NIS outright to preserve both the company and pipeline operations. Croatian Economy Minister Ante Šušnjar said his government’s “hand is extended” and that the move would secure regional energy stability, not market dominance.
Vučić retorted with irony that Serbia, for its part, was ready to buy Croatia’s state power utility HEP — “at a price higher than anyone else would offer.”
The NIS crisis now risks spilling into neighboring Bosnia and Herzegovina, which depends on the Pančevo refinery for a quarter of its fuel. Meanwhile, NIS’s oil fields in Romania face an uncertain future. Some in Belgrade suggest nationalizing NIS, following Germany’s example when it took over three Rosneft refineries after Russia’s invasion of Ukraine.
A Political Reckoning
Energy expert Željko Marković told N1 TV that Serbia had offered Moscow several solutions over the past ten months, all rejected until the sanctions came into force. If Belgrade fails to act, he warned, the country could face a cold winter and power shortages.
Vučić, who once believed he could balance between Washington and Moscow as an equal, is now confronting reality: Serbia is not Tito’s Yugoslavia but a small European state overestimating its leverage.
Belgrade’s refusal to sanction Russia has backfired, leaving Serbia trapped by its own foreign policy. “It’s better to have Russians as enemies than as friends,” analyst Biljana Obradović quipped, “because Russian friends always end up like Serbia — abandoned.”
The sanctions also jeopardize the Balkan Stream pipeline, affecting energy flows to Bulgaria, Hungary, Bosnia, and even Austria. Serbia’s only fallback is the new gas interconnector with Bulgaria, which can supply 1.8 billion cubic meters of gas from Azerbaijan — roughly 60% of its annual demand. The rest will be harder to replace.
Local analysts say Serbia missed its chance in 2022 to align its energy and foreign policy with the EU. Back then, Vučić echoed Kremlin talking points that “Europe will freeze without Russian gas.” It didn’t — and now it may be Serbia’s turn to face the cold.
With ongoing protests, last year’s Novi Sad station tragedy, and looming elections, the crisis could become a breaking point for Vučić’s rule.
Whether the energy storm will finally convince Serbians that Vučić’s policy of closeness to Moscow has failed remains to be seen. But one thing is certain: the Balkans are again drifting into uncertainty — a region caught between past illusions and future instability.