January 12, 2026
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Serbia developing legal framework for CO2 storage

The draft law on hydrocarbon exploration and exploitation will include permanent disposal of carbon dioxide in geological formations of depleted deposits, the Ministry of Mining and Energy of Serbia said.

Serbia has begun work on a draft bill on hydrocarbon exploration and exploitation and the basic principles for the law. The Ministry of Mining and Energy invited interested individuals, expert institutions, representatives of companies and scientific and academic bodies as well as civil society organizations to submit proposals and suggestions via the email address [email protected].

The deadline is January 18. Under development is one of the key regulatory frameworks for mining, given that it entails exploration, exploitation, preparation and transport of hydrocarbons within the process of exploration and exploitation ‒ in particular, oil, natural gas, condensates and other hydrocarbon resources.

In Serbia, the sector is regulated by the Law on Mining and Geological Explorations. It treats hydrocarbons as mineral raw materials for energy. The aim of the forthcoming law is to establish a unique legal and institutional framework for hydrocarbon exploration and exploitation as well as for the exploration of geological structures suitable for underground storage of natural gas and permanent disposal of CO2 in geological formations of depleted deposits in exploitation zones, in line with the highest security and environmental standards.

The forthcoming law needs to facilitate incentives for exploration and the use of geological structures for storing gas and carbon dioxide

The ministry explained that the regulatory framework needs improvement as regards the process of approving exploration and exploitation rights, including alignment with European regulations. It especially concerns directive 94/22/EC on the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons, directive 2009/31/EC on the geological storage of carbon dioxide and directive 2013/30/EU on safety of offshore oil and gas operations.

Among the specific goals is the introduction of environmental standards and environmental protection measures in all phases of the process. In the law, the ministry also intends to define investors’ obligations when it comes to remediation, rehabilitation and monitoring. As for gas and CO2 storage, the new framework needs to facilitate incentives for exploration and the use of geological structures for the purpose, within the strategy to lower greenhouse gas emissions.

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January 4, 2026
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Israel, Greece, Cyprus reaffirm commitment to joint energy projects

Amid chronic delays in the projects for offshore gas and the Great Sea Interconnector and Turkey’s warnings, the leaders of Israel, Greece and Cyprus said after a trilateral summit that they would safeguard their sea lanes and critical infrastructure against emerging threats.

Prime Minister of Israel Benjamin Netanyahu, Prime Minister of Greece Kyriakos Mitsotakis and President of Cyprus Nikos Christodoulides agreed to reinforce trilateral cooperation on security, defense and military matters. In a declaration from their summit in Jerusalem, they reaffirmed the importance of the dialogue in a 3+1 format with the United States.

The joint statement came amid chronic delays in the projects for offshore gas and the Great Sea Interconnector. The latter, an undersea electricity link, is planned to run from the island of Crete in Greece to Cyprus and, from there, to Israel.

Turkey has been openly opposing such projects and even sending its navy to disturb research and exploration. Countering the Great Sea Interconnector, the government in Ankara is apparently planning to establish a power link with the northern Cypriot Turkish-dominated entity.

Netanyahu, Mitsotakis and Christodoulides particularly emphasized the importance of the Great Sea Interconnector project

“Today’s trilateral summit reaffirms our unwavering commitment to strengthen our cooperation, enhancing the security and resilience of our nations for generations to come… We reaffirm our determination to advance joint energy projects, including natural gas development, electricity interconnectors, and renewable energy initiatives, as a solid foundation for cooperation in the region, based on international law, including the law of the sea and the respect of all states to exercise their rights in their respective EEZ / continental shelf,” the document reads.

EEZ is exclusive economic zone, a maritime area in which a country claims exclusive rights. Netanyahu, Mitsotakis and Christodoulides particularly emphasized the importance of the Great Sea Interconnector project.

“We underscore the importance of maritime security and pledge to deepen collaboration in safeguarding sea lanes and critical infrastructure against emerging threats,” they said. The three leaders added they would collaborate regional interconnectivity projects within the so-called India – Middle East – Europe Economic Corridor (IMEC).

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December 27, 2025
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Greek company Aktor sets up BESS subsidiary after entering LNG trade

Power storage services are the core activity of Aktor’s new subsidiary Aktor BESS, but it could also build and operate renewable electricity and natural gas–fired plants and enter trade and distribution. The company earlier formed a business with DEPA Trade for liquefied natural gas (LNG).

Greek infrastructure and renewable energy developer and operator Aktor Group has formally positioned itself in the rapidly growing sector of electricity storage. Last week it established a 100% subsidiary called Aktor BESS, with an initial EUR 80,000 in capital.

The firm operates under Aktor Renewables and the main activity is providing electricity storage services. Aktor is apparently aiming to tap into the rapidly growing demand for batteries in Greece amid crippling wind and solar power curtailments.

In addition, battery energy storage systems or BESS are becoming a necessity because of the strengthening cannibalization effect. Operators of photovoltaics and wind parks require more predictable production profiles to for cost-effective pricing. They need to bridge the gaps between peak production and peak demand as well, as subsidies are gradually expiring.

Aktor BESS can benefit from the rapidly growing demand for battery storage in Greece

The statute of Aktor BESS points to a range of possible secondary activities. They include the construction and operation of renewable electricity and natural gas–fired plants as well as power trade and distribution and the development of technical studies.

The BESS facilities can be of the standalone type or colocated with the parent company’s production assets. Aktor Group’s Chairman and Chief Executive Officer Alexandros Exarchou is also the head of the new firm’s three-member board.

The company earlier established a joint venture for LNG and gas trade with DEPA Commercial, which controls 40%. It is also known as DEPA Emporias (in Greek), DEPA Commerce and DEPA Trading.

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December 19, 2025
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Fearful about oil sanctions, Serbia’s Vučić seeks support from EU leaders

Facing an imminent halt of the Gazprom-owned Serbian oil company NIS due to US sanctions, President Aleksandar Vučić met with EU leaders António Costa and Ursula von der Leyen in Brussels. “I don’t have such a strong fear regarding gas as I do about oil,” he revealed and said they spoke about the possibilities for importing derivatives from Romania, Bulgaria and other countries in the region. Costa and Von der Leyen urged Serbia to further align with the EU’s foreign and security policy.

Serbia hasn’t received a single drop of crude oil for two months, President Aleksandar Vučić noted as he addressed the press in Brussels after meeting European Council President António Costa and European Commission President Ursula von der Leyen. The country’s only refinery is run by NIS (Naftna industrija Srbije), which Russian state-owned Gazprom controls through its subsidiaries. Entirely stripped of oil supply since United States sanctions against the Serbian company kicked in, the facility recently ground to a halt.

There is apparently no progress in talks about the sale of Gazprom’s share. The authorities expect that Serbia will have to freeze NIS completely in the next few days, for its financial system to avoid secondary sanctions.

NIS and Lukoil together hold over one quarter of fuel stations in Serbia

The company, which is also present in some neighboring countries, supplied 80% of derivatives in the domestic market. Moreover, one in five fuel stations in Serbia is branded NIS or Gazprom. They account for more than a quarter together with Russia-based Lukoil. It is also under US sanctions, though able to operate almost until the end of April.

Vučić: It will only get harder each coming day

Vučić said he and Costa and Von der Leyen spoke about the key energy concerns that Serbia is facing. “It’s not easy for us already today, and it will only get harder each coming day… I don’t have such a strong fear regarding gas as I do about oil. Of course I am fearful, as a responsible man. I am always fearful, but we sought solutions and worked on it and I hope we will have EU’s support in these very important matters,” he stated.

Namely, Serbia is dependent on Russian gas and its transit through Bulgaria. The fuel comes via the Balkan Stream pipeline, an extension of TurkStream. If NIS is nationalized, the Kremlin could slash or even end the supply in case. Serbia is buying gas under short-term arrangements since May. The EU has launched measures to end most of the remaining supply from Russia next year.

According to the president, possibilities were discussed at the meeting of importing oil derivatives from Romania, Bulgaria and other countries in the region.

There was also word about where Serbia would build gas and oil pipelines, Vučić added and hinted at projects for liquid fuel pipelines as well. He mentioned the possibility of transporting diesel that way from Constanța, Romania’s Black Sea port city. Near it is the Petromidia refinery, owned by Rompetrol, a 100% subsidiary of Kazakhstan’s state-owned KazMunayGas (KMG).

Vučić said he spoke with the two top officials about the plan for a gas interconnector with North Macedonia.

Europe has consistently shown solidarity with Serbia, according to both top officials

Costa and Von der Leyen issued short and essentially identical messages after the meeting with the Serbian president. They highlighted the importance of accelerating reforms in the country, particularly with regard to the rule of law and media freedom.

“We stressed that enlargement is a geostrategic imperative and the need for Serbia to further align with the EU’s foreign and security policy. We also welcomed Serbia’s steps to diversify its energy sources and routes and to reduce dependency on Russia, whose unreliability has been repeatedly demonstrated. Europe has consistently shown solidarity with Serbia through major investments in energy infrastructure and support to vulnerable households,” they wrote on social media.

Two months ago, Von der Leyen said the EU is a guarantee that Serbian families would be safe and warm in winter and that the country can enter its joint gas procurement mechanism.

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December 10, 2025
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Uncompetitiveness holding EU far behind green hydrogen targets

Several high-profile green hydrogen projects have been canceled in the past year, and major companies reduced their decarbonization ambitions, the European Union Agency for the Cooperation of Energy Regulators (ACER) said in its new report. The technology is four times more expensive than production from fossil gas through steam reforming.

Investments are far behind EU targets and trailing even the contracted demand. However, an acceleration of existing projects would change the picture substantially. On that note, the European Hydrogen Bank is receiving submissions for its third auction.

Electrolyser capacity in the EU jumped 51% last year to 308 MW, while 1.8 GW was under construction in October 2025, expected to be commissioned within two years. The numbers are from the European Hydrogen Markets – 2025 Monitoring Report, issued by the EU Agency for the Cooperation of Energy Regulators (ACER). It pointed out that the total falls well short of the trajectory toward the 2030 target of 40 GW, or the 48 GW to 54 GW range in member states’ plans.

Of note, while some other databases show similar figures, the Renewable Hydrogen Coalition has calculated that operational projects amount to 600 MW, though “across Europe,” and not just in the EU. Another 3 GW is under construction, its update reads.

The European Hydrogen Strategy aimed at 6 GW by 2024.

Sweden, Germany in strongest expansion

Sweden and Germany account for two thirds of the capacity under construction (742 MW and 414 MW, respectively), ACER said. In addition, EWE has just marked the start of construction of an electrolyzer facility of a whopping 320 MW, which would eclipse the fleet that is currently producing green or renewable hydrogen. The site is in Emden, in Germany.

Domestically produced renewable hydrogen contracted, 270,000 tons, would require 3.7 GW of electrolysers.

Several high-profile green hydrogen projects have been canceled in the past year, and major companies have reduced their decarbonization ambitions, the agency warned. Importantly, all existing projects, in any stage of development and with a 2030 target, are for 62 GW in total, indicating the potential for acceleration.

An electrolyzer under construction in Germany is set to surpass the combined capacity of the current EU fleet

As for Southeastern Europe, Romania targets 2.1 GW of electrolyzer capacity for 2030. Croatia is aiming for between 0.1 GW and 1.3 GW, while the remaining countries are at just 0.1 GW or 0.2 GW. Greece was the only country with any capacity in construction in October, 50 MW. Interconnections are planned between Greece, Bulgaria, Romania and Hungary.

Citing the European Hydrogen Observatory, ACER said Germany has added 46 MW last year. With Denmark (18 MW) and Hungary (11 MW), it was 72% of the annual growth.

Only six plants were bigger than 10 MW at the end of 2024, amounting to 90 MW altogether.

ACER Uncompetitiveness holds EU far behind green hydrogen targets

Gray hydrogen remains dominant

Steam methane reforming (SMR) remains the dominant production technology, accounting for 89% of the total capacity in the EU. It is colloquially called gray hydrogen.

The share of electrolytic hydrogen, made using electricity from all sources, not necessarily renewables, is marginal. So is the overall capacity for blue hydrogen. It is also from fossil gas, but the process involves carbon capture and storage, CCS.

Green hydrogen, one of so-called renewable fuels of non-biological origin (RFNBO), costs some EUR 8 per kilogram, against just over EUR 2 per kilogram of conventional, gray hydrogen.

Expectations for liquefied natural gas (LNG) and carbon dioxide emission allowance price levels favor fossil fuel hydrogen in the short term, the report’s authors stressed. Meanwhile, slower deployment of electrolyzers limits economies of scale, delaying the anticipated reductions in related capital costs.

Projected prices of LNG and CO2 allowances are favoring fossil fuel hydrogen

With current production cost estimates at just below EUR 3 per kilo, low-carbon hydrogen with carbon capture is more competitive than renewable hydrogen. Nevertheless, the additional costs for CO2 transport and storage are highly uncertain.

“The buildout of CO2 infrastructure may pose additional challenges. Moreover, the long-term gas offtake contracts required for such projects could lock in fossil fuel dependence and exposure to price volatility in the global natural gas market,” the authors said.

By definition, low-carbon hydrogen results in at least 70% lower emissions than the conventional one from fossil fuels. The segment includes electrolysis running on nuclear power.

The EU also counts hydrogen from biogas and biomass processing as renewable, if the technology complies with sustainability requirements.

Electricity supply costs, excluding grid tariffs, may account for up to 50% of the levelized cost of renewable hydrogen, with substantial regional variations across the EU. Regions with abundant renewable resources and strong renewables integration, such as Spain, already provide advantageous conditions for renewable hydrogen production, the document adds.

Electricity accounts for 60% to 70% of renewable hydrogen cost

The Renewable Hydrogen Coalition said electrolyzer manufacturing capacity has surged from 1 GW within a few years. It expects it to hit 15 GW in 2026.

Electricity accounts for 60% to 70% of renewable hydrogen costs, with taxes and levies reaching 30% to 40% of the electricity cost itself, according to the group. It is also urging for incentives and an improvement in the legal framework.

“With the right enabling policies put in place, altogether, our coalition members could put online close to 18 GW of renewable hydrogen production projects between 2026 and 2032,” the declaration reads.

On that note, the European Hydrogen Bank has launched the call to its third auction for hydrogen production, worth EUR 1.3 billion. Spain is adding EUR 415 million, while Germany will match the EU with another EUR 1.3 billion within the auctions-as-a-service segment.

The IF25 Hydrogen Auction is designed to provide cost-efficient support for the production of RFNBO hydrogen or electrolytic low-carbon hydrogen. Producers of hydrogen with maritime or aviation offtakers can apply as well.

The call is part of a package under the Innovation Fund, using revenues from the EU Emissions Trading System (EU ETS). A EUR 2.9 billion segment for net-zero technologies, IF25 NZT, includes hydrogen production.

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December 2, 2025
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Energy Community calls for nominations of PECI energy infrastructure projects

Developers of cross-border energy infrastructure investments within the Energy Community or internal ones with significant cross-border dimensions can nominate them by January 19 within the selection process for projects of Energy Community Interest (PECI). In line with the Trans-European Networks for Energy (TEN-E) regulation, the mechanism is for electricity transmission and energy storage including protection, monitoring and control systems, together with smart power and gas grids, hydrogen and carbon dioxide.

The Energy Community Secretariat opened a call for promotors to submit their projects for evaluation within the 2026 PECI selection. EU regulation 2022/869 – revised TEN-E, which the Energy Community Ministerial Council adopted as 2023/02/MC-EnC, stipulates the approval of the second list of projects of Energy Community Interest (PECI) by December 31, 2026.

Nominations are received until January 19. The proposals concern the electricity and gas sectors.

In the first group are high- and extra-high-voltage overhead transmission lines and underground and submarine transmission cables. It includes equipment and installations for offshore renewable electricity.

Eligible electricity segment investments are also for energy storage, as well as protection, monitoring and control systems for all of the above and at all voltage levels.

Projects for smart power and gas grids are both in the scope of the PECI selection process. Hydrogen-based technologies, electrolyzers and CO2 projects are within the gas infrastructure list as well, the call reads.

PECIs are for cross-border energy infrastructure within the Energy Community or internal endeavors with significant cross-border dimensions.

Proposal forms are available at the call’s webpage.

Ministries, regulatory authorities and transmission system operators will be among the institutions evaluating nominated projects. The group also consists of the European Commission, Energy Community Secretariat, Energy Community Regulatory Board, the ECDSO-E entity of Energy Community distribution system operators, the European Network of Transmission System Operators for Electricity (ENTSO-E) and European Network of Transmission System Operators for Gas (ENTSOG).

The Energy Community comprises the Western Balkans, Moldova, Georgia and Ukraine.

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November 8, 2025
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Russia’s Lukoil to sell refineries, fuel chains in Southeast Europe amid US sanctions

Russian oil producer Lukoil said it intends to sell its international assets due to US sanctions and that it has already begun reviewing bids. The company’s foreign subsidiaries include oil refineries in Bulgaria and Romania, as well as fuel retail chains across Southeast Europe.

The sale of Lukoil’s international assets is being carried out under a wind-down license from the United States Office of Foreign Assets Control (OFAC). In a press release, the company said it might apply for an extension of the license, if necessary to ensure uninterrupted operations of its subsidiaries.​

The facilities up for sale include the largest oil refinery in the Balkans – Lukoil Neftohim Burgas in Bulgaria, as well as the Petrotel-Lukoil refinery in Romania. Lukoil also has fuel retail networks in Romania, Bulgaria, Turkey, North Macedonia, Croatia, Serbia, and Montenegro.

Lukoil operates the largest oil refinery in the Balkans and fuel retail chains across the region

Lukoil Neftohim Burgas is a major player in Bulgaria, supplying almost the entire market, according to reports. Its capacity is 190,000 barrels per day. On the other hand, the capacity of Petrotel-Lukoil in Romania is much smaller, at about 2.4 million tons per year.

The Bulgarian parliament has adopted legislative amendments requiring any sale of Lukoil’s assets in Bulgaria to be cleared by the country’s government and intelligence service.

Serbia-based oil company NIS is also under US sanctions, while the EU is imposing a ban on Russian gas

The US sanctions against Russian energy companies, which took effect earlier this month, are also affecting NIS, a Serbia-based oil refiner and fuel retailer owned by Russia’s Gazprom.

At the same time, the European Union plans to ban imports of Russian natural gas starting on January 1, 2026. However, a European Commission spokesperson said that it would not apply to the transit of Russian gas and would not affect deliveries to Serbia and Bosnia and Herzegovina.

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October 30, 2025
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Several EU member states face uncertainty amid looming Russian gas ban

The European Union’s proposed measures to phase out imports of Russian oil and gas would destroy Hungary’s security of supply, according to Minister of Foreign Affairs and Trade Péter Szijjártó, who spoke at the meeting of energy ministers in Luxembourg. Slovakia is in a similar situation, while Romania pointed to the difficulty of proving the origin of foreign gas.

The draft regulation that the Council of the EU adopted doesn’t explicitly call for a ban on the transit of gas to third countries, while it foresees a temporary suspension for member states in case of supply disruption. The proposal also allows the possibility of importing non-Russian gas through the TurkStream pipeline.

The meeting of the so-called Energy Council highlighted several issues and concerns among EU member states about the proposed ban on Russian natural gas, including liquefied natural gas (LNG). Energy ministers in the Council of the EU adopted their position ahead of negotiations with the European Parliament on measures that they plan to introduce on January 1.

There would be a transition period for existing contracts for Russian fossil gas. Short-term ones concluded before June 17 this year would remain in force until June 17, 2026. Long-term contracts may run until January 1, 2028. It is also the targeted date for ending imports of Russian oil.

Szijjártó: The remaining infrastructure, physically and capacity-wise, is not able to supply Hungary

“The real impact of this regulation is that our safe supply of energy in Hungary is gonna be killed,” the country’s Minister of Foreign Affairs and Trade Péter Szijjártó stressed at the meeting.

He clarified that he wasn’t speaking about prices, and warned of damage from the proposed regulation – in the name of diversification.

“As now we are phasing out supply routes towards Hungary, the remaining infrastructure, physically and capacity-wise, is not able to supply the country. This has nothing to do with politics. This has nothing to do with Russia. This has nothing to do with the war in Ukraine. This is mathematics and physics,” Szijjártó stressed.

He also reiterated that his country would be left dependent on one oil supply route, via Croatia. It would leave Hungary “totally defenseless to a monopoly” as the transit fee doubled since the start of the war and it is five times higher than the current European benchmark, the minister underscored.

Bulgaria asks for protection from arbitration for gas TSOs

Slovak Deputy Prime Minister and Minister of Economy Denisa Saková said the supply of gas to her country is limited. There are interconnections with all neighbors, but external capacity bottlenecks remain, she argued. Bulgaria asked for provisions protecting gas transmission system operators (TSOs) from arbitration and financial penalties.

Romania voted for the draft regulation, but warned that identifying the origin of imported gas would be difficult

Secretary of State in Romania’s Ministry of Energy Cristian Bușoi urged for a workable and harmonized verification system and for the development of clear guidelines.

“This is not a matter of energy policy, but of strategic autonomy and European solidarity. At the same time, as we move from political vision to implementation, we believe it is important that the new authorization and verification system remains practical, transparent and proportionate. The additional requirements to demonstrate the exact country of production represent a new level of responsibility that, while understandable, and we support this in principle, may be difficult to fulfill in practice, particularly for pipeline [and] natural gas traded on hubs, and shipments transport, including LNG cargos that involve multiple sources and blending,” Bușoi told the ministers.

Council of EU proposes suspension clause

Notably, the Energy Council’s position, part of the REPowerEU plan and sanctions against Russia, is that the regulation should contain a suspension clause. The European Commission could temporarily lift the ban on Russian gas and LNG in case of significant disruptions of supply.

Another important element is the possibility of importing non-Russian gas through the TurkStream pipeline if the fuel’s origin is proven.

Gas transit through EU not subject to prohibition

Energy ministers said the EU should ensure that natural gas which crosses the 27-member bloc under a transit procedure is not ultimately entering into free circulation in the union.

It would imply that Serbia, Bosnia and Herzegovina and North Macedonia, non-EU countries, could continue to buy Russian gas that is delivered through Balkan Stream. It is the extension of TurkStream running through Bulgaria and Serbia to Hungary.

“Any gas which, before its import into the EU, was exported from the Russian Federation, either via direct export from Russia to the EU or via indirect export through a third country, should, except in case of transit, be subject to the prohibition”, the document reads.

Serbia still hasn’t signed a long-term gas supply contract with the Russian side, and the previous one expired in May. Moreover, the United States have imposed sanctions on Gazprom-controlled NIS, Serbia’s national oil importer, refiner and operator of a chain of service stations.

On top of it all, hydropower output is at a record low due to chronic drought, while coal is being imported as domestic mines don’t produce enough lignite.

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October 30, 2025
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Von der Leyen: EU is guarantee that Serbian families will be warm in winter

The European Union is connecting Serbia to its energy market, and it is the true guarantee that Serbian families will be safe and warm in winter, European Commission President Ursula von der Leyen said in Belgrade. She expressed preparedness to invest further in the country’s gas interconnector with Bulgaria.

In her speech during the visit to Serbia, European Commission President Ursula von der Leyen didn’t address the looming energy crisis caused by the sanctions that the United States imposed on Russian-owned oil company NIS. Moreover, she demanded greater alignment with the EU foreign policy from President of Serbia Aleksandar Vučić, including on sanctions against Russia.

“The EU membership offer is an opportunity. It is the promise of peace. Of prosperity. And of solidarity. Especially in times of crisis. You have seen this in practice,” she stated and pointed to the energy crisis of 2022.

EU showed equal solidarity with Western Balkans

After Russia invaded Ukraine, the EU introduced the same measures of solidarity to its Western Balkan partners as to its own member states, Von der Leyen stressed. “This is what it means to be a reliable partner. You can continue to count on us. We are connecting Serbia to the EU’s energy market. This is the true guarantee that Serbian families will be safe and warm in winter,” she stated.

The head of the 27-member bloc’s executive body pointed to ongoing investments like the Trans-Balkan Electricity Corridor. The mostly completed route stretches from Romania to Bosnia and Herzegovina and Montenegro and its MONITA undersea link with Italy.

Von der Leyen: Collective market power to secure better energy prices

Von der Leyen highlighted the Serbia-Bulgaria gas interconnector as well. The pipeline was completed almost two years ago. “We are prepared to invest further in it. We also invited Serbia to join the EU’s joint gas procurement mechanism. Together we are using our collective market power to secure better energy prices,” she said.

The administration in Brussels introduced the AggregateEU platform for joint procurement of gas in 2023. It expired earlier this year, but the EU is preparing another mechanism.

Serbia is planning an oil interconnector with Hungary and gas links with Romania and North Macedonia. Vučić said the upcoming winter would not be an easy one for Serbia.

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October 14, 2025
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Serbia’s economy in uncharted territory amid imminent US sanctions against oil company NIS

For NIS in Serbia, doing business will become exceptionally difficult from tomorrow, when the United States imposes sanctions, starting with payment systems. The same goes for any enterprise cooperating with the oil refiner and distributor, majority owned by Russia’s Gazprom Neft and another firm controlled by Gazprom.

Nine months after the US announced sanctions against NIS, which were postponed several times, they are coming into force tomorrow morning. Apparently, the American Office of Foreign Assets Control (OFAC) is imposing restrictive measures for Serbia’s national oil importer, refiner and operator of a chain of service stations. Croatian company Jadranski naftovod (JANAF), which depends to a great extent on supplying NIS, said the deliveries can last until October 15.

The US and the United Kingdom announced sanctions early this year against Russian state-owned Gazprom Neft, which at the time held 50% of ownership, while its parent Gazprom controlled another 6.2%. After a reshuffle, Gazprom Neft now has 44.9% of NIS, and Intelligence, a firm within Gazprom’s system, owns 11.3%. Serbia’s stake is 29.9%.

Plan B has numerous unknowns

The oil refinery in Pančevo is the only diesel and gasoline producer in Serbia and it dominates the market by far. According to media reports, NIS has considered switching to cash payments, with the exception of the domestic currency system DinaCard, and transferring all its accounts to the state-owned Postal Savings Bank.

It is unlikely that the company would be able to cover all the logistics and finances that way. At the same time, the entire Serbian economy is at risk, together with basic services for citizens. Organizing fuel imports will take time, which may lead to shortages and price hikes. Officials and the representatives of the oil sector claim that the current stockpiles can last several months.

Forced nationalization may switch energy crisis to gas supply from Russia

Back in January, President of Serbia Aleksandar Vučić immediately estimated that Russia would have to completely and urgently exit ownership. There was no success in the meantime in talks with the Kremlin and Gazprom.

“There is one possibility. If I said: I may seek nationalization of the property tomorrow. That is the last thing i would say, if I had to. I don’t want that,” Vučić stated late last week.

In case of a forced purchase of the Russian stake, the focus would turn to the supply of Russian gas through the Balkan Stream pipeline, an extension of TurkStream. Serbia still hasn’t signed a long-term contract with the Russian side, and the previous one expired in May.

To make matters worse, Bulgaria said it would end the transit of Russian gas, through Balkan Stream, for short-term arrangements. The move is part of the European Union’s measures to end the purchases of Russian fossil fuels. A total halt is scheduled for 2028. If the supply chain isn’t drastically changed, it would heavily impact Hungary, Slovakia and Serbia, together with Bosnia and Herzegovina and North Macedonia.

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