Serbia is at risk of losing vital oil imports as negotiations for a new sanctions extension on the Oil Industry of Serbia (NIS) have failed, according to Aleksandar Vučić in an interview with the Financial Times.

The sanctions waiver expires tonight at midnight, and failure to extend it could hinder crude oil supplies to NIS, which is primarily owned by Russian firms Gazpromneft and Gazprom. NIS runs Serbia’s sole refinery, possessing an annual capacity of 4.8 million tons, fulfilling the majority of national demand.

Vučić expressed skepticism about any last-minute agreements that could mitigate the crisis.

On January 10, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) enacted sanctions against the Russian oil sector, granting Gazpromneft 45 days to divest from NIS.

After NIS initially requested a waiver, OFAC extended the sanctions deadline by an additional 30 days on February 27, allowing the company to negotiate with its Russian partners. On February 26, Gazpromneft transferred approximately 5.15% of its stake in NIS to Gazprom to circumvent the sanctions.

Most crude oil entering Serbia is via a pipeline operated by Croatia’s Janaf, which may have to halt transactions with NIS to comply with U.S. sanctions.

Vučić stated, “We engaged with the Americans, the Russians, and others” to seek a resolution, noting, “We have not observed any shift in the Americans’ stance.”

The Russian stakeholders have declined to sell their entire 56 percent interest in NIS, even after restructuring ownership to ensure that neither Gazprom nor Gazpromneft retains a majority interest in the refinery, as reported by the British publication.

Vučić remarked, “Russia insists on maintaining control at all costs.” Previously, he ruled out nationalizing either NIS or the Russian stake to avert sanctions and refrained from discussing potential resolutions with the FT.

An industry source suggested that Hungarian oil firm MOL might acquire Russia’s stake in NIS. MOL chose not to comment, while Vučić indicated that this was not part of his recent conversation with Hungarian Prime Minister Viktor Orbán.

At the time, the Hungarian Foreign Minister and MOL CEO Zsolt Hernady were in Moscow to discuss energy matters with the Russian government, although Vučić was uncertain whether NIS was on their agenda.

When asked by the FT about the NIS situation’s relevance in the broader U.S.-Russia dialogue regarding the Ukraine conflict, Vučić responded, “I believe it is a minor issue for them.” He added, “If the sanctions are enforced, we will need to assess the Russian response promptly and determine our next steps.”

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