In a move sending shockwaves through the Balkans, the United States has enforced sweeping sanctions against Serbia’s main oil supplier, the Petroleum Industry of Serbia (NIS), a company majority-owned by Russia. The sanctions, which took effect at 6 am on October 9, 2025, come after months of delays and repeated pleas from Belgrade for reprieve. The decision threatens to disrupt Serbia’s energy security, upend its economy, and fuel political unrest in a country already grappling with deep domestic tensions.
NIS, which operates Serbia’s sole oil refinery and manages over 330 petrol stations across the country, is a linchpin of the national economy. The company employs around 5,000 people and is responsible for nearly 12% of Serbia’s state budget, according to University of Belgrade economist Ljubodrag Savić, who described NIS as a “lifeline” for the nation’s infrastructure. Yet, the company’s fate is now uncertain, as its majority stakeholder—Russia’s state oil giant Gazprom Neft—finds itself at the heart of a geopolitical standoff between Washington and Moscow.
The sanctions were initially imposed in January 2025 as part of the U.S. response to Russia’s full-scale invasion of Ukraine in 2022. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) demanded that Gazprom Neft divest from NIS, a condition that was never met. After six postponements, the U.S. finally enforced the measures, leaving NIS without the special license that had previously allowed it to keep operating unhindered.
Serbia’s reliance on Russian energy is almost total. The country receives most of its gas and oil via pipelines running through Croatia and other neighboring states, with NIS distributing the fuels domestically. The Croatian pipeline operator JANAF, which had supplied crude oil to NIS’s Pančevo refinery from the port of Rijeka, immediately ceased deliveries on October 8, 2025, after NIS lost its import license—a direct consequence of the sanctions.
The impact of this sudden cutoff is already being felt. Payment terminals at NIS petrol stations have stopped accepting foreign cards such as MasterCard and Visa, both of which operate on U.S. payment systems. Only Serbia’s domestic Dina card, cash, or the IPS instant payment method are now accepted. In Bosnia and Herzegovina, where NIS and Gazprom also operate petrol stations, only cash payments are permitted, and some products have reportedly disappeared from shelves.
Despite these disruptions, NIS has tried to reassure the public. In a statement, the company said it has “sufficient crude oil reserves for processing at this time, while petrol stations are fully supplied with all types of petroleum products.” Bojana Radojevic, NIS’s retail director, told state broadcaster RTS, “Our sales are operating as normal. There are no restrictions when it comes to the quantities customers can purchase.” The company also emphasized its commitment to maintaining supply and ensuring the social stability of its workforce.
But experts are divided on how long these reserves will last. Dušan Bajatović, director of Srbijagas, asserted on state television that fuel stocks would be sufficient for six to eight months and that “no threat of a price shock or fuel shortage” loomed in the near term. Others, like energy analyst Miloš Zdravković, warned that Serbia’s reserves are “insignificant” and “will not last long” after the sanctions, predicting that the oil industry could grind to a halt if alternative supply routes aren’t established.
President Aleksandar Vučić, already under pressure from 11 months of anti-government protests, has called the sanctions “extremely dire” and warned they will affect every citizen. He said, “This is something that will affect every citizen,” and urged Serbians not to panic: “Trust your state. We will go through this together.” Vučić also made clear that nationalization of NIS, while legally possible, would be a last resort: “Nationalisation could be the only way out of the sanctions, but it is the last thing I would do.” He added, “We will talk to the Russians because there is nothing left to discuss with the Americans.”
The situation is further complicated by NIS’s ownership structure. As of September 2025, Gazprom Neft holds 45% of the company, the Serbian state nearly 30%, and JSC Intelligence, a Saint Petersburg-based firm linked to Gazprom, controls about 11%. The rest is held by minority shareholders. Serbia sold 51% of NIS to Gazprom in 2008 for €400 million, a deal widely criticized as a bargain for Russia given the strategic importance of the asset.
Sanctions are also impacting the financial sector. Vučić warned that “no bank in the world would risk violating US sanctions,” raising fears that NIS’s accounts with foreign banks could be frozen. This could jeopardize the payment of salaries and the company’s ability to service its debts—over half a billion euros in loans, with €180 million due this year. Some banks have already preemptively severed ties, while others, like the state-owned Postal Savings Bank, may be NIS’s last financial lifeline.
The broader economic fallout could be severe. NIS’s production and operations account for 6.9% of Serbia’s GDP. The company’s struggles have already been reflected in its financial performance: turnover fell by more than a quarter in the first half of 2025 compared to the same period in 2024. Layoffs are a growing concern. Vučić said, “I hope the company will not lay off a large number of employees.”
Meanwhile, the Croatian pipeline operator JANAF is bracing for an €18 million hit this year due to lost business with NIS, highlighting the ripple effects of the sanctions beyond Serbia’s borders. Hungarian-owned MOL, which operates 65 petrol stations in Serbia and is not affected by the sanctions, has announced its readiness to step in and cover any supply gaps left by NIS.
Serbia’s predicament is emblematic of the collateral damage caused by the escalating power struggle between Russia and the United States. As economic analyst Aleksandar Milosevic told the Associated Press, “This is a political game between Russia and the United States and Serbia is kind of, basically, an irrelevant player in all that.” Despite formally seeking European Union membership, Serbia has refused to join Western sanctions against Russia, citing its dependence on Russian energy.
With winter approaching and reserves finite, the coming months will test the resilience of Serbia’s energy infrastructure and the government’s ability to navigate a crisis not entirely of its own making. The outcome will not only shape the country’s economic future, but also its geopolitical orientation in an increasingly divided Europe.
