Serbia’s only oil refinery, located in Pancevo and owned by the Serbian Oil Industry company NIS, has suspended operations due to a lack of crude oil supplies, underscoring the growing impact of US sanctions on the country’s energy sector. The company announced that processing units at the refinery were being shut down in an orderly fashion, stressing that the procedure follows the same safety and technical rules applied during planned maintenance and is designed to allow a swift restart once new deliveries of crude become available.
NIS, which is majority-owned by Russian entities, was placed under US sanctions earlier this year as part of Washington’s broader effort to cut off revenue streams to Russian state-controlled energy firms and limit financing for the war in Ukraine. The restrictions, which took effect in early October, have already led banks to stop processing NIS payments and pushed the Croatian pipeline operator JANAF to halt crude deliveries to the Pancevo plant. Without new supply routes or a change in ownership structure, the refinery’s ability to operate has now been directly compromised.
In its statement, NIS sought to reassure the public that the suspension of refining does not immediately threaten fuel availability on the domestic market. The company said it would continue to supply petroleum products across Serbia using existing stocks built up in advance. It also emphasised its commitment to maintaining social stability for more than 13,500 employees, signalling that it does not currently plan mass layoffs or drastic cost-cutting measures.
Political leaders, however, are openly acknowledging the gravity of the situation. President Aleksandar Vučić confirmed that Serbia had not received a positive response from the United States to its request for an exemption that would allow further crude deliveries to Pancevo despite the sanctions. According to Vučić, the government has secured sufficient fuel reserves to last until the end of January, but the lack of a long-term solution is becoming increasingly difficult to disguise.
The president also sharply criticised Croatia’s JANAF, which operates the pipeline system used to deliver crude to Serbia. Vučić said the company refused a shipment of oil destined for Serbian strategic reserves rather than for NIS itself, despite Belgrade’s assurances that the sanctioned firm would not receive the crude. Serbia even proposed that Croatian observers be sent to monitor the process, he claimed, but the offer was rejected. Zagreb’s position reflects a strict interpretation of the sanctions regime and a reluctance to take on political or legal risk by facilitating any flows that could be perceived as indirectly benefiting a blacklisted entity.
For Washington, the pressure on NIS is not just about interrupting daily operations but about forcing a deeper change in ownership. The US has made it clear that it wants Russian capital completely removed from the company. On 15 November, American authorities set a deadline of 13 February for NIS to find a buyer for the Russian stake. Yet Vučić openly admits that Russian shareholders have shown no appetite for selling. That refusal leaves Serbia squeezed between its longstanding energy ties to Moscow and the growing consequences of aligning too closely with Russian state enterprises.
NIS has been dominated by Russian interests since 2008, when a major privatisation deal made Gazprom and its oil subsidiary Gazprom Neft majority shareholders. At that time, Gazprom Neft acquired 50 per cent of the company, the Serbian state held just under 30 per cent, and Gazprom a little over 6 per cent, with the remainder dispersed among current and former employees and other small investors. Although the ownership structure has been reshuffled several times, the core reality has not changed: control remains in Russian hands. Gazprom itself formally withdrew from NIS in September, but its stake was simply transferred to another affiliated entity, a St Petersburg-based firm called Intelligence, preserving Russian influence under a different legal wrapper.
The halt at Pancevo therefore highlights a strategic vulnerability that analysts have been warning about for years: Serbia’s dependence on a refinery whose fate is tied to geopolitical decisions taken in Moscow, Washington and Brussels rather than in Belgrade. As long as NIS remains effectively Russian-controlled, any tightening or prolongation of sanctions will continue to threaten the continuity of operations and the country’s energy security.
In the short term, the Serbian government can lean on stored fuel and possibly increase imports of refined products through alternative channels, but these are stop-gap solutions that come with higher costs and logistical complications. Over the medium term, the choices become starker. Serbia can push harder for a change of ownership at NIS, diversifying away from Russian control, or it can continue to resist, accepting recurring disruptions, constrained supply routes and mounting political friction with key Western partners.
For now, NIS is presenting the shutdown as a controlled, reversible measure and insisting that consumer supplies are safe. The deeper question is how long Serbia can navigate between sanctions, domestic political considerations and inherited energy structures before it is forced into a more fundamental reconfiguration of its oil sector. The silent, cooling towers at Pancevo are an early sign that the room for manoeuvre is shrinking fast.
