Still no response to repeated request for postponement of sanctions against NIS

Although, since the new American administration came to power, Serbia’s eyes have been focused on US President Donald Trump, seeing him as almost the only one who could lift the sanctions on Naftna Industrija Srbije, Serbian President Aleksandar Vucic reduced those hopes to a minimum a few days ago. He said that the Trump administration would not change its position on the issue of NIS sanctions. He added that this position could change only if there was a major agreement on the conflict between Russia and Ukraine.

Since it was announced early in the morning on January 27 that the NIS sanctions had been postponed for 30 days, no other official has announced anything, and when asked if anything is happening, everyone shrugs their shoulders and waits. The only news is that in the meantime, a request was once again sent to the US Department of the Treasury for the postponement of sanctions, after the Belgrade Stock Exchange announced a new ownership structure in NIS before the US sanctions against NIS came into force. Since then, there has been no response.

The change occurred when the Russian Gazpromneft transferred its ownership share of about five percent to Gazprom, against which no sanctions were imposed. Thus, Gazpromneft reduced its ownership share in NIS from 50% to around 44.85%, while Gazprom’s share in NIS increased from 6.15% to 11.30%. The State of Serbia owns 29.87% of NIS, and the remaining shares are owned by citizens, current and former employees and other minority shareholders. A similar maneuver was already used once, when the European Union imposed sanctions on Russia due to the import of Russian oil, after which NIS stopped being supplied with this Russian raw material.

With this move, Belgrade and Moscow are trying to avoid or at least once again postpone the sanctions against NIS due to Gazpromneft’s stake in NIS.

Bearing in mind, therefore, that Gazpromneft, against which sanctions were introduced, no longer has a majority stake in NIS, there are hopes that this might ease the Serbian position a little. And not only that, but also the fact that negotiations on ending the war in Ukraine have begun at the global level. For days, meetings have been held at the highest level between Russia and America, which, if an agreement is reached, could save Serbia and its citizens from being collateral damage in this whole matter.

However, what happens after March 28 if the sanctions are introduced remains to be seen, but it is clear that everything depends on whether the owner of the controlling package of shares, in this case the Russian side, wants to sell that company. So far it has been clear that it doesn’t.

Although by Russian standards NIS is a drop in the ocean of total revenues, it is difficult to find an adequate replacement for this company. Because who, besides NIS, could hold and supply more than 60% of the market at this time and not call into question the regular supply of oil and derivatives. An additional matter is Petrohemija, which would also be covered by sanctions. Despite all the announcements that Serbia is ready even in the worst-case scenario, regular business would be seriously questioned, which would additionally affect the Serbian economy.

If the US stays with its decision on sanctions against NIS, it would mean that NIS would no longer be able to buy, process, import or obtain oil from Croatia via the Adriatic Pipeline (Janaf), and it is quite certain that it would also be denied access to financial systems.

There is nothing new on the Janaf website either, which also requested the lifting of sanctions due to the contract they have with NIS until the end of 2026. The only thing they point out is that Janaf, through an American lawyer and with the support of the Croatian Government, received from OFAC a license allowing it to execute the above-mentioned crude oil transport contract signed with NIS for 30 days, i.e. until March 28, 2025.

NIS a.d. Novi Sad

HIP-Petrohemija a.d. Pančevo

Beogradska berza a.d. Beograd

Naftna industrija Srbije

NIS

Janaf

Belgrade Stock Exchange

Gazpromneft

Gazprom

Petrohemija Pančevo

Donald Trump

Aleksandar Vučić

introduction of sanctions on NIS