Belgrade (Parliament Politics Magazine) – Russian-controlled oil company NIS in Serbia secures a three-month U.S. sanctions reprieve, easing potential disruption to the country’s fuel supply.
As reported by Reuters, a government official confirmed Serbia has won a three-month reprieve for Russian-owned NIS, under US sanctions, ensuring stable fuel supplies ahead of winter.
What did Serbia say about Gazprom’s plans for controlling NIS?
Serbia reported that Russia’s Gazprom and Gazprom Neft, which hold a 56% stake in NIS, have asked the US Treasury’s OFAC for permission to transfer management of the oil firm to an outside party.
The US Treasury’s OFAC imposed sanctions on Russia’s oil sector, including Gazprom, though enforcement on NIS was delayed multiple times before taking effect on October 8.
Why are NIS’s Russian owners seeking a new US license extension?
Serbia’s energy minister, Dubravka Dedovic Handanovic, said the Russian shareholders of the country’s only refinery, NIS, have applied for a renewed US operating license as they negotiate a deal to transfer control of the facility to a third party.
A majority share of NIS is owned by Gazprom Neft and affiliated Gazprom firms, while the Serbian government holds the remaining 29.9% stake.
Mr Handanovic said,
“The petition states that the Russian side is ready to cede control and influence over the NIS company to a third party.”
He stated,
“The state of Serbia supported this request. OFAC has already responded with certain comments and we hope it will announce its position within the week.”
The energy minister added,
“Time is running out and a solution must be found, but citizens must not suffer and run out of fuel. That will not and must not happen.”
Why did the US sanction two new Russian oil companies?
Last month, US President Donald Trump unveiled new sanctions on Russian oil giants Rosneft and Lukoil, calling them “tremendous” measures aimed at pressuring Moscow to end its war in Ukraine.
The sanctions are President Trump’s administration’s first direct response to Russia’s actions since the war in Ukraine began.
Rosneft, a state-controlled company led by President Vladimir Putin’s ally, and privately owned Lukoil account for over half of Russia’s total crude oil exports.
The move follows the UK’s recent sanctions on Rosneft and Lukoil, coming a day after the White House announced a planned meeting with Russia in Budapest would be canceled.
President Trump said,
“Every time I speak to Vladimir, I have good conversations and then they don’t go anywhere. I just felt it was time. We waited a long time.”
Former ambassador John Herbst stated that the sanctions “will certainly hurt the Russian economy, which is already stumbling. But I think it’s naive to expect this step alone [will] push Putin to actually make peace and good faith.”
He added,
“If we want Putin to actually negotiate in good faith, we have to maintain major pressure, economic and military, for many months. But this is a good start.”
Another ex-ambassador said,
“These sanctions are an indication to President Putin that he has to come to the table.”
What did experts say about the impact of sanctions on Russia?
Dr Stuart Rollo, a research fellow at the University of Sydney’s Centre for International Security Studies, said the sanctions aim
“to materially impact Russia’s industrial capacity to wage war, and to coerce Russia into accepting peace terms out of fear of the escalating impacts of sanctions on their economy and society.”
Dr Rollo continued,
“They will not impact the former. They may impact the latter if a deft diplomatic balance is struck between the perceived consequences of continuing the war, and the benefits and concessions that will be furnished through a negotiated peace.”
Michael Raska, Assistant Professor in the Military Transformations Programme at Singapore’s Nanyang Technological University, stated that the sanctions were
“unlikely to alter the military balance in Ukraine.”
He added,
“as profit margins shrink, Russia will face difficult trade-offs between maintaining socio-economic stability, while financing a protracted war.”
When did the Ukraine-Russia war start, and how many have died in Ukraine?
The Russia-Ukraine war started with a full-scale Russian invasion of Ukraine on February 24, 2022. This expanded on the conflict that started in 2014, when Russia annexed Crimea and supported separatists in eastern Ukraine.
Since 2014 and especially after the 2022 invasion, over 300,000 people are estimated to have died in the conflict in Ukraine.