Serbia’s request for an operating license from the United States for its Russian-owned oil refinery has been denied. This decision has forced the Pančevo refinery to halt operations, causing a significant impact on the nation’s fuel supply, as confirmed by President Aleksandar Vučić.
US Refusal of Operating License
On February 12, 2025, President Vučić expressed disappointment over the US government’s refusal to grant the license. He indicated that Serbia expected a more favorable outcome. Vučić articulated his confusion regarding the motivations behind the US decision, stating, “I don’t see what they gained from it.”
Currently, the United States has imposed sanctions on the Petroleum Industry of Serbia (NIS), which is largely owned by Russian stakeholders. The US Office of Foreign Assets Control (OFAC) has not shown any willingness to amend its decision. As a result, Serbia must cease operations at the refinery. Energy Minister Dubravka Đedović Handanović will notify NIS of this action.
Economic Impact
- The refinery is losing approximately €370,000 daily due to ongoing restrictions.
- Serbia has granted NIS 54 days to shut down the facility since US sanctions took effect on October 9, 2025.
- Vučić warned that the National Bank of Serbia and other commercial banks could face secondary sanctions for transactions with NIS.
President Vučić remarked that such sanctions could damage Serbia’s investment ratings. He emphasized the broader implications of the sanctions, stating that the crisis could jeopardize the entire Serbian economy.
Fuel Supply Situation
Despite the operational halt at the refinery, Serbia possesses sufficient fuel stocks for the time being. Current reserves include:
- 53,900 tonnes of operational diesel.
- 150,000 tonnes of mandatory diesel reserves.
- 29,000 tonnes of additional diesel ordered by the government.
- 5,000 tonnes of kerosene and 38,000 tonnes of gasoline.
President Vučić reassured that these supplies will last until the end of January 2026, regardless of consumption levels. However, logistical challenges are anticipated due to increased transport costs, as tankers will now need to travel to alternative locations for supplies.
Broader Implications of Sanctions
Starting December 13, 2025, NIS and Lukoil will be prohibited from receiving strategic fuel reserves from the government. This means that sanctions will apply broadly across Serbia, impacting the national fuel supply chain.
Moreover, Croatia’s JANAF pipeline has blocked oil imports intended for Serbian reserves, further complicating the situation. Vučić noted that this move signals that sanctions are targeting not only NIS but also the wider Serbian economy.
Future Developments
In addition to the oil crisis, Serbia faces challenges regarding natural gas supplies. Vučić has indicated that the country might seek alternative gas suppliers if a contract is not secured by the upcoming Friday deadline.
Moreover, the government has set a January 15, 2026 deadline for Russia to sell its stake in NIS. Failure to do so could compel Serbia to take unspecified actions. Vučić concluded with a somber note: “For now, only Serbia suffers; how things will develop further, we will see.”
