BELGRADE: US sanctions on Serbia’s Russian-owned NIS oil company came into force on Thursday after months of delays.
The US sanctioned the Petroleum Industry of Serbia in January as part of its crackdown on Russian energy following Moscow’s invasion of Ukraine.
NIS confirmed it had not been granted an extension of the special licence from the United States Department of the Treasury.
The company stated it is working to overcome this situation and will cooperate with the US Treasury to seek removal from the sanctions list.
NIS assured it currently has sufficient crude oil reserves for processing and petrol stations remain fully supplied.
President Aleksandar Vucic warned on Monday the sanctions would have a serious impact and hit the banking sector first.
He emphasised that no bank worldwide would risk violating US sanctions.
NIS confirmed it expects foreign payment cards to cease functioning at its petrol stations.
Petrol stations will now accept only Serbia’s domestic payment card or cash.
Vucic revealed talks are underway regarding the company’s future including possible divestment of Russian shareholders.
NIS supplies over 80% of Serbia’s diesel and petrol according to Belgrade-based economist Goran Radosavljevic.
He warned the sanctions could affect sectors from finance to agriculture and impact Air Serbia’s jet fuel supply.
Radosavljevic stated the financial sector must immediately halt all transactions with NIS to avoid penalties.
He considered a complete exit of the Russian holding from the company as unlikely.
The economist noted Russia does not want to sell its shares in NIS despite its small contribution to Gazprom’s revenue.
He highlighted the company’s significant political importance to Moscow.
Serbia has maintained close ties with Russia despite Western pressure and its EU membership aspirations.
The country remains heavily dependent on Russian gas supplies.
A Russian gas supply contract signed in spring 2022 is currently expiring.
Negotiations are underway for a new gas supply agreement between Serbia and Russia.
Gazprom Neft owns 45% of NIS while the Serbian state holds nearly 30%.
The remaining shares are held by minority shareholders. – AFP
