The United States is planning to impose financial sanctions on Serbia’s largest oil company, NIS, which is partially owned by Russian energy giants Gazprom Neft and Gazprom. This development was announced by Serbia’s President Aleksandar Vucic, who said that sanctions are expected to be introduced in the coming days. These sanctions could have major consequences for Serbia, particularly regarding its energy supply.
Why Is NIS Facing Sanctions?
The potential sanctions on NIS come in response to the company’s Russian ownership. Gazprom Neft owns 50% of NIS, while Gazprom holds an additional 6.15%. This means that Russia has a controlling stake in the Serbian oil company. Amid the ongoing war in Ukraine, Western countries, including the United States, have been applying pressure on Russian businesses and their global connections to cut off financial support for Russia’s government.
Serbia has repeatedly condemned Russia’s invasion of Ukraine in international forums, including at the United Nations. However, it has stopped short of directly imposing sanctions on Russia. This stance is likely because Serbia relies heavily on Russian gas for its energy needs. Now, with the U.S. moving forward with sanctions, Serbia could face significant energy challenges.
What Could the Sanctions Mean for Serbia?
If the sanctions are implemented, oil shipments to Serbia through a pipeline running from Croatia could be stopped. This pipeline is an essential route for supplying oil to the country. The potential loss of this supply route might force Serbia to find alternative ways to meet its energy needs, which could be costly and complicated.
Oil Prices Struggle Amid Weak Demand and Sanctions Uncertainty
The Serbian government owns a 29.87% stake in NIS, while the remaining shares are held by small shareholders. President Vucic has said that Serbia may need to explore options to reduce Russian ownership in the company to avoid further consequences. He also mentioned that discussions with Russian partners about lowering their stake in NIS might be necessary.
However, no official details about the sanctions have been shared yet. Vucic said that Serbia is waiting for a formal document from the U.S. government that outlines what the sanctions will entail. The U.S. Treasury Department has not commented on the matter so far.
How Other Countries Might React
President Vucic has also indicated that other Western nations, including the United Kingdom and the European Union, are likely to follow the United States in imposing sanctions on NIS. This would make it even harder for Serbia to continue its current arrangements with the company.
Serbia’s dependence on Russian gas has been a point of concern for Western nations. While Serbia has condemned Russia’s actions in Ukraine, it has resisted pressure to join the EU and U.S. in imposing sanctions on Moscow. This resistance has put Serbia in a difficult position, as it tries to balance its energy needs with its international obligations.
The looming sanctions reflect the broader tensions between Western countries and Russia, as well as the ripple effects of these tensions on smaller nations like Serbia.
