Serbia braces for energy crisis as US sanctions its only oil refinery
Serbian President Aleksandar Vucic warned that US sanctions on the country’s Russian-majority owned oil company NIS will impact all citizens, as he pledged to continue discussions with Washington while awaiting Moscow’s response to the restrictions that took effect on 8 October.
‘As a country that cherishes rule of law, a country that has never boasted of robbery and has always acted responsibly, we cannot gladly agree to models of snatching someone’s capital or property,’ Vujic said at an extraordinary press conference, according to the official Tanjug news agency.
The sanctions took effect after NIS announced it had not received a Special Licence from the US Treasury Department that would have enabled continued operations, marking the end of seven temporary waivers granted since restrictions were initially imposed in January.
‘The consequences for our entire country are extremely difficult, politically, economically, socially and in every other sense,’ Vucic said. ‘The most important thing is that the Serbian citizens understand that this is not aimed against an individual, against someone in the state administration, but that it is something that will impact every citizen of our country.’
According to realistic estimates, the NIS oil refinery in Pancevo could continue operations until 1 November without additional crude oil supplies, while fuel availability would remain stable until year-end, Vucic said. The company currently has sufficient crude oil reserves for refining and continues supplying all product types to its petrol stations, NIS said in a statement.
However, foreign payment cards including MasterCard and Visa are no longer supported at NIS petrol stations. Customers can instead use Serbian Dina cards, cash, or instant payment methods, while commercial transactions will continue in dinars, the company said.
Croatia’s oil pipeline operator JANAF, which supplies 80% of NIS’s crude oil needs, said Thursday it had stopped supplies after the sanctions deadline.
‘We have had discussions, and will continue discussions, with US partners. We had discussions with the Russian ambassador, too, this morning. We expect further reactions by Moscow,’ Vucic told the press conference.
NIS, in which Gazprom Neft owns a 44.9% stake, Gazprom holds 11.3% and the Serbian government 29.9%, operates Serbia’s sole oil refinery with an annual capacity of 4.8 million tonnes that covers most of the Balkan country’s needs.
The US Treasury’s Office of Foreign Assets Control (‘OFAC’) initially placed sanctions on Russia’s oil sector, 10 January, and gave Gazprom Neft 45 days to exit ownership of NIS. The company received six temporary waivers before the latest extension expired.
https://www.nis.rs/en/news/nis-operations-under-sanctions-of-u-s-treasury-department
