On 15 May, a new set of EU-imposed sanctions against Russia will come into force, banning the transport of crude oil not only from Russia but also from Russian companies operating on the EU territory.
This jeopardizes the gas supply to Serbia, but also to the entire Western Balkans region. Although an agreement with the EU has been announced, which would exempt Serbia from this measure, several other solutions are on the table, including nationalisation or the sale of assets of the Petroleum Industry of Serbia (NIS), the biggest Serbian oil company, to third parties.
Although the sanctions apply to the whole of Europe, Serbia is in a much more difficult situation than other countries in the region. Serbia is the only country in Europe that is 100 per cent dependent on Russian gas and oil, while the majority ownership of NIS is in the hands of the Russian company, Gazprom Neft. Serbian President Aleksandar Vučić has confirmed that Serbia is under great pressure because of that issue.
The latest information is that Serbia will most likely reach an agreement with the EU, which would exclude it from the new set of sanctions. This could only be a temporary solution though.
Economist Mihailo Gajic predicts that Serbia may face several scenarios: nationalization of NIS, purchase of 2% of shares from Gazprom NEFT, purchase of entire Gazprom’s share in NIS or reaching an agreement with the EU.
“The first scenario is to buy a package of shares so that the Serbian state becomes the majority owner of NIS, i.e. the 2% we need to become owners. The second option is for Gazprom to sell all its shares to Serbia, which would allow the Serbian government to completely control the oil industry in Serbia,” Gajic underlined and added: “Another option would be to nationalise the ownership in the share package, which would be acceptable to everyone, but it could cause a serious conflict with Russia. If that happens, we will almost certainly have problems with Russia giving us their gas, and they are currently our only supplier. What is certain is that we will have to choose the least harmful solution.”
Gajic believes that Gazprom is not ready to sell its remaining share package to the Serbian government and sees a potential solution in the agreement with the EU.
Energy expert Miodrag Kapor agrees that one possibility is for Serbia to buy the majority share package from Gazprom. “Our refinery processes oil from the Urals, which is mainly imported from Iraq. There is still a risk that the Adriatic pipeline cannot be used if sanctions are imposed on Gazprom. One of the realistic options is for NIS to become fully owned by the Serbian state or a third party, thus ensuring uninterrupted distribution,” Kapor said.
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