Serbian Oil Industry’s refinery in Pancevo. Photo: nis.rs
Serbia’s mainly Russian-owned oil company NIS (Serbian Oil Industry) announced on Tuesday that its Pancevo refinery is suspending production due to a lack of crude oil as a result of US sanctions imposed over Russia’s full-scale invasion of Ukraine.
“Pancevo Oil Refinery has started suspending the operation of its production units today,” said NIS in a statement.
NIS promised that the company will continue to supply the domestic market with petroleum products without interruptions because of stocks it has already amassed.
“NIS sincerely hopes that regular operations will be re-established in the shortest time possible at the Pancevo Oil Refinery,” the firm said.
Serbia admitted it had failed to secure a US operating licence for the Russian-owned oil refinery. Earlier on Tuesday, Serbian President Aleksandar Vucic said that he hadn’t “received a positive decision from the United States” regarding NIS’s operations and oil imports.
“Today the Minister of Mining, Dubravka Djedovic Handanovic, will inform Serbian Oil Industry that we have no indication that the Americans will issue a licence for the operation of the refinery, which will cause, in accordance with NIS’s decision, the cessation of operation of the refinery – whether they will do it today, tomorrow, the day after tomorrow, that is their business,” Vucic told a press conference.
Vucic promised the “whole process will come to an end”, meaning that a solution for will be found, by January 15.
Vucic last week gave NIS’s partial owners, Russian companies Gazprom and Gazprom Neft, until January 15 to find a buyer for their holdings in the oil company. Nationalisation remains an option if a buyer is not found, but Vucic vowed that “even then we will not nationalise immediately”.
Serbia sold 51 per cent of NIS, its only oil company, to Gazprom in 2008 for what critics said was a bargain price of 400 million euros, plus a promised investment of 550 million.
NIS says that since 2009, more than 900 million euros have been invested in its modernisation.
The US sanctioned NIS in January 2025, and, after a few waivers, the sanctions took effect on the company in October. Serbia is hoping that a quick sell-off by the Russians will ensure continued fuel supplies as winter sets in.
The Pancevo refinery produces motor fuels meeting the Euro-5 standard, aviation fuel, liquified petroleum gas, petroleum coke, fuel oil, bitumen, propylene, aromatics, straight-run gasoline for pyrolysis and other petroleum products (sulphur and other hydrocarbons). Its maximum capacity of the Pancevo refinery is 4.8 million tonnes per year.
In January, when the US first ordered sanctions on NIS, Russia’s Gazprom owned 6.15 per cent of the company. Gazprom Neft, a subsidiary, owned another 50 per cent. Serbia owned just under 30 per cent, and other minority shareholders held just under 14 per cent.
In February, Gazprom increased its ownership to 11.3 per cent, and Gazprom Neft decreased its share to 44.9 per cent. In September, the Russian-owned company JSC Intelligence took control of 11.3 per cent of the ownership of Gazprom.
