Serbia’s oil refinery halts operations amid US sanctions and ownership uncertainty

Tuesday 25 November 2025 - 13:20

By: Dakir Madiha

Serbia’s oil refinery halts operations amid US sanctions and ownership uncertainty

Serbia’s only oil refinery, operated by the Russian-majority-owned Petroleum Industry of Serbia (NIS), has stopped processing crude oil due to halted supplies caused by US sanctions. The sanctions, which took full effect on October 8 following multiple postponements, have led to banks ceasing payment processing for NIS and the Croatian JANAF pipeline suspending crude deliveries. This cut in supply forced the refinery in Pančevo, responsible for about 80% of Serbia’s gasoline and diesel demand, to cease operations as of November 25.

The US sanctions aim to enforce the divestment of Russian interests from NIS, where Gazprom Neft and Gazprom control a combined 56.2%, while Serbia owns nearly 30%. Efforts are underway for the Russian owners to sell their controlling stake, with potential buyers including Hungary’s MOL and other unidentified investors. Serbia’s government has emphasized avoiding nationalization and is closely involved in negotiations to ensure the refinery’s continued operation.

The shutdown poses significant economic risks for Serbia, as NIS contributes about €2 billion annually to state revenue and employs roughly 14,000 people. The government has asserted its preparedness with substantial fuel reserves approximately 89,825 metric tons of diesel and 53,648 tons of gasoline, and has authorized imports to stabilize supplies. Officials maintain that citizens and businesses need not worry about fuel availability despite the refinery’s halt.

This situation highlights Serbia’s energy vulnerability amid geopolitical tensions, with the country balancing pressures from Western sanctions and its historical ties to Russia. The resolution depends heavily on the outcome of ownership negotiations and potential US licenses allowing continued refinery operation during the transition period.