In a sweeping turn of events across the Balkans, U.S. sanctions have delivered a powerful blow to Russia’s longstanding economic grip on the region, forcing dramatic changes in Bulgaria and Serbia’s energy sectors. The rapid developments—described by Bloomberg on November 20, 2025, as the most serious setback to Russian influence in the Balkans in a decade—have sent ripples through European politics and energy markets, marking a significant shift in the balance of power between East and West.
The catalyst for this transformation came in October 2025, when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed new sanctions on Russia’s largest oil companies, Rosneft and Lukoil, as well as 36 of their subsidiaries. The move was justified by what the U.S. described as Russia’s lack of “serious commitment to a peaceful process to end the war in Ukraine.” The sanctions targeted the heart of Russia’s economic engine—its energy sector—aiming to reduce the Kremlin’s ability to finance its war effort and prop up its economy.
The immediate fallout was felt in Bulgaria, where Lukoil owned the country’s largest oil refinery, Neftochim, near the Black Sea. Suddenly facing the threat of operational paralysis, the Bulgarian government took decisive action. In a parliamentary session that lasted just 26 seconds, lawmakers voted to seize the Neftochim refinery and other Lukoil assets, stripping shareholders of their rights and appointing a manager to negotiate a possible sale. This move overturned 26 years of Russian ownership, beating the deadline set by U.S. authorities and signaling a new era in Bulgaria’s energy landscape.
“Russia’s influence is built on dominance in the energy sector thanks to oil and gas—leftovers from the Soviet era that had remained untouched for decades. Much of that is now gone. These are the last gasps, which is why it’s causing so much anxiety,” Ruslan Stefanov, chief economist at the Center for the Study of Democracy in Sofia, told Bloomberg. The sense of urgency was palpable, as the government rushed to secure energy supplies and prevent disruptions that could ripple throughout the economy.
The ramifications extended beyond Bulgaria’s borders. In Serbia, authorities faced a similar dilemma. The country’s only oil refinery, operated by Naftna Industrija Srbije AD (NIS), was majority-owned by Russia’s Gazprom Neft and Gazprom, which together held a controlling 56.15% stake. U.S. sanctions, which took effect in October after months of postponements, cut off crude deliveries to NIS, raising the specter of a winter energy crisis. To avert disaster, Serbia’s Energy Minister Dubravka Đedović Handanović announced on November 19, 2025, that the Russian stakeholders had agreed in principle to sell their share to an unnamed buyer. “The name of the third party is not being disclosed because these are business negotiations between serious companies,” Handanović told national broadcaster RTS.
Meanwhile, NIS filed a request with U.S. authorities to secure a special license allowing continued operations during the ownership transition. The company, which employs about 13,500 people and runs more than 400 fuel stations in Serbia, as well as around 80 in Bosnia, Bulgaria, and Romania, faced the risk of exhausting its refinery reserves by late November unless new supplies could be arranged.
Serbian President Aleksandar Vučić has walked a diplomatic tightrope, emphasizing that Belgrade wants to avoid “confiscation or nationalization at all costs.” Instead, he insists that any changes in ownership must be the result of negotiation rather than imposition. Serbia itself owns nearly 30% of NIS, with the remainder held by minority shareholders. The company reported revenues of 3.3 billion euros ($3.8 billion) in 2024 but posted a loss of 153 million euros, underscoring the financial pressures at play.
According to Mario Bikarski, a senior analyst for Europe at Verisk Maplecroft, the ousting of Russian oil giants from Bulgaria and Serbia will help neutralize the influence of Vladimir Putin in the region. “Once attempts to oust Russian oil giants from Bulgaria and Serbia are complete, this will help neutralize the influence of Vladimir Putin,” Bikarski noted, as cited by Bloomberg.
The U.S. sanctions have not only impacted Bulgaria and Serbia. Several other EU countries with Lukoil refineries, such as Romania and Moldova, have scrambled to prevent plant shutdowns. In Romania, officials have asked the U.S. for a postponement of sanctions, while in Moldova, authorities are in talks to purchase Lukoil’s facilities at Chisinau Airport, including an aviation fuel depot. Lukoil also recently declared force majeure at its West Qurna-2 oil field in Iraq, suspending operations there as well.
The financial consequences for Russia have been severe. On October 30, 2025, Ukraine’s military intelligence reported that oil refining in Russia had declined by 18–20%. By November 6, 2025, The Moscow Times reported that Russia’s federal oil and gas revenues had plummeted by 21.4% over the first ten months of the year—a staggering drop of 2 trillion rubles, from 9.54 trillion to 7.5 trillion rubles ($92.4 billion).
For years, Bulgaria and other Eastern European countries had expressed concern about Russia’s deep economic footprint, particularly in the energy sector. Despite political pressure and public outcry, no serious action had been taken—until the latest round of U.S. sanctions forced the issue. Analysts believe that even if the war in Ukraine ends and sanctions are eventually lifted, Russia is unlikely to regain its former influence in the region’s energy sector. The landscape is already shifting toward new, more reliable suppliers and partners, as governments seek to insulate themselves from the risks of overdependence on Russian resources.
Hungary, meanwhile, has managed to secure a one-year exemption allowing continued imports of Russian oil, highlighting the varied approaches within the EU to the unfolding crisis. Each country in the region is weighing its own energy security needs against the broader geopolitical imperative to reduce Russian leverage.
As the dust settles, the Balkans stand at a crossroads. The speed and decisiveness with which Bulgaria and Serbia have acted reflect not only the pressure of U.S. sanctions but also a growing recognition that the era of Russian energy dominance is drawing to a close. The coming months will test the resilience of these countries’ energy sectors and their ability to forge new alliances in a rapidly changing world.
What’s clear is that the U.S. sanctions have done more than just disrupt oil flows—they have upended decades-old power structures and set the stage for a new chapter in the Balkans’ relationship with Russia and the West.
