Serbia has suspended operations at its NIS refinery due to a lack of crude oil supplies and faces a race against time to secure fuel for the winter. The Balkan country has been scrambling to source alternative energy supplies, since the US Treasury slapped sanctions on Russia‘s oil sector back in January.
The sanctions hit NIS, which is majority owned by Russia’s Gazprom Neft and Gazprom. Belgrade had been granted repeated waivers before the sanctions finally came into effect in October. At which point, banks stopped processing the refinery’s payments and Croatia’s JANAF pipeline halted crude deliveries to the refinery.
Serbia’s president Aleksandar Vučić claimed on Monday that the refinery was still operating but at a reduced level, and that it had enough reserves to supply the domestic market.
However, the refinery had to shut down operations on Tuesday due to a lack of cruse oil, the Belgrade media channel NOVA.RS TV reported.
A source told the channel that country to government claims, the refinery does not have any fuel reserves.
The NIS refinery is critically important for Serbia as it is the country’s sole oil processing plant. It plays a vital role in powering Serbia’s transport, industry, and households.
The oil depot supplies over four-fifths of the country’s gasoline and diesel and almost all its aviation and heavy fuel.
Serbia’s president said on Monday his government was trying to get the US to grant Belgrade a license to continue operating.
“We hoped and expected that we would receive that license yesterday,” he said in a TV address to the nation.
“However, we understood from numerous conversations that we had last night and after midnight Serbian time with various American partners, that there are still things that they want to hear, see, receive, so that they could consider and possibly make a positive decision on granting an operating license for the next period of 45 or 60 days.”
Gazprom Neft holds 44.9% of NIS and Gazprom GAZP.MM 11.3%. Serbia owns 29.9%, with the rest held by small shareholders.
The White House is seeking complete Russian divestment from NIS and has given the company’s owners three months to find a buyer of the Kremlin’s stake.
