Time Is Running Out: Serbia Faces Looming Winter Energy Crisis as NIS Sanctions Bite

Serbia's diplomatic balancing act between East and West has pushed the country to the brink of a possible winter energy crisis, analysts warn. A combination of US sanctions targeting the Petroleum Industry of Serbia (NIS), the EU's move away from Russian energy, and pressure from Moscow over gas supplies has tightened the squeeze on Belgrade's energy security.

Refinery under threat

Since October, Serbian authorities have been urgently seeking ways to shield majority Russian-owned NIS from US sanctions that were imposed after delays. Energy Minister Dubravka Djedovic Handanovic warned that "time is running out" for the nation's only refinery as talks continue over its future.

NIS supplies roughly 80% of Serbia’s fuel and, officials say, could exhaust its reserves by November 25 if no solution is found. Energy expert Zeljko Markovic told AFP:

"The refinery must stay operational — it's essential for a stable winter supply."

He added that relying on imports would be difficult because Serbia lacks the capacity to import enough oil products to cover the whole market.

Sanctions, ownership and limited options

Earlier this week, the energy minister confirmed a request for a temporary licence had been submitted to Washington amid talks involving NIS’s Russian owners and a reported "third party." NIS is 45% owned by Gazprom Neft, which has been targeted by US sanctions designed to curb Russia's energy revenues linked to the invasion of Ukraine. In September, Gazprom transferred an 11.3% stake to another Russian firm named Intelligence. The Serbian state holds nearly 30% of NIS, with the remainder owned by minority shareholders.

Markovic said he is skeptical Moscow will genuinely divest, noting that so far "they have only shifted shares internally," and it is unclear whether the US would accept the proposed structure. "The most realistic option that would truly ease the pressure is for the Serbian state to take over NIS," he said — an option Serbian officials have repeatedly dismissed. If the refinery shuts down, Markovic warned, "fuel supplies will quickly tighten and shortages will follow."

Gas dependence and Moscow's leverage

Cheap Russian gas also forms the bulk of Serbia's gas mix. After months of short-term agreements, Belgrade is seeking a long-term deal with Moscow; the current short-term contract expires on December 31. According to state gas company Srbijagas, Russia delivers about 6 million cubic metres per day via the TurkStream pipeline through Bulgaria at prices well below market levels.

Although coal dominates Serbia’s overall energy production, many major industries and urban heating systems — including parts of Belgrade — rely on natural gas. Markovic called the short-term contracts "a tool of control over Serbia," warning that if no long-term deal is reached, Belgrade may be forced to accept less favourable terms from Moscow or seek costlier alternative supplies. Serbia imports gas from Azerbaijan and produces some domestically, but these sources are insufficient to replace a major loss of Russian supply.

Officials also caution that even a new Russian deal may not solve longer-term vulnerabilities, because the EU's planned phaseout of Russian gas next year could affect the Bulgarian transit route that supplies Serbia.

Politics and the price of balancing

Despite being an EU candidate, Serbia has not joined Western sanctions on Russia since 2022 and remains a close Kremlin partner. President Aleksandar Vucic has accused Russia of using short-term gas contracts to pressure him against nationalising NIS — a remedy used in other regional cases, including Romania and Bulgaria. Vucic described that pressure as "a very, very bad message in every sense." Moscow has publicly criticised perceived mixed signals from the Serbian leadership: "We hear one set of statements when he is in Moscow, and very different ones when he's elsewhere," said Russian Foreign Ministry spokeswoman Maria Zakharova.

Former diplomat Branka Latinovic said Vucic's long-standing strategy of "zig-zagging" between Moscow and Brussels has left Serbia exposed to the fallout from Russia's aggression in Ukraine. "A policy of balancing on several pillars, together with military neutrality, no longer fits the global context," she said, adding that the situation with NIS makes that clear.

Reporting credits: oz/al/rh/jh (original)