Serbia’s NIS Future – Russian Delay or Real Opportunity for Other Players

Is Russia really leaving Serbia, or just strategically delaying?

Russia’s willingness to sell NIS from a geostrategic perspective and is Russia losing interest in its influence on Serbia?

Serbia’s geostrategic relations with Russia have been historically entrenched and founded on the anti-Western national sentiment in Serbia and presently supersede and preside over several socio-economic dimensions. Russia’s energy embeddedness in Serbia is currently proving to be a major challenge for the Balkan country as it finds its crucial energy asset under US sanctions, which effectively threatens the collapse of the country’s national financial system. Naftna Industrija Srbije (NIS) represents one of if not the most crucial strategic energy asset of Serbia as it supplies the country with more than 80% of its fuel and owns the single and largest oil refinery in the country.^[1] The situation with NIS has been prolonged for over a year and the Serbian government has been given ample opportunities to initiate and intensify the exit of Russian capital from crucial proprietorships such as NIS. Russia has catalyzed the delay regarding the decision surrounding its divestment from NIS since the company is considered a crucial Russian instrument of influence that solidifies the intergovernmental partnership between Serbia and Russia.^[2] The Kremlin has consistently shifted its narrative regarding NIS over the past year attempting to stall and potentially indefinitely delay the sale of Gazprom Neft’s stake within the shareholding structure of NIS. Russia’s position has shifted from strenuous defiance to sell its stake towards efforts to engage in a hybrid economic agreement while maintaining control over the company, finalizing with overt acceptance to sell Gazprom Neft’s stake in NIS.^[3] The US has unilaterally pressured both Serbia and Russia to reconsider their level of strategic allegiance with Russia being forced to choose between selling Gazprom Neft’s stake to a third independent buyer, risk Serbia’s forceful acquisition of the stake or endanger its strategic partnership with Serbia by refusing any of the proposed resolutions. Russia’s unwillingness to surrender its business interests in NIS is more than evident, however, not crucial enough in order for the Kremlin to risk the already fragile relations which have substantially deteriorated since the start of the war in Ukraine.^[4] Russia is presently being presented with an impossible choice and forced out of its pivotal Balkan strategic hub due to the war in Ukraine. Central to this strategy by the US is NIS as a crucial industrial bloodstream in Serbia. Russia is slowly being outmaneuvered by the US and by extension the EU out of Serbia’s critical energy infrastructure, which is central to the geopolitical strategy for the Balkans.

The Kremlin would most likely continue to have vested interests in Serbia, however, under the present constellation of power dynamics, Russia’s influence in Serbia is slowly being degraded. NIS has been instrumental in forwarding the Kremlin’s influence operations in the Balkans and primarily in Serbia. Gazprom Neft acquired its stake in NIS for $400 million in a 2008 transaction, promising Serbia to block Kosovo’s independence in the UN Security Council as a permanent member. In return, Russia gained significant ownership in a highly potent and clinical company for Serbia’s national interests. The crisis caused with the sanctioning of NIS by the US Treasury Department and the Office of Foreign Assets Control (OFAC) is already negatively impacting the bilateral relations between Serbia and Russia, with Russia being forced out of one of their flashpoints for geopolitical and geostrategic influence, however, long-term influence interests are not expected to be significantly impacted.^[5] Russia would remain heavily engaged in forwarding its own national agenda for the Balkans through Serbia.

How willing is the Serbian government to sell NIS to other, non-Russian market players?

OFAC’s sanctions on NIS have left the Serbian government without many alternatives, while Vucic ever since the beginning of the crisis a year ago, adopted a neutral position excluding himself and Serbia from the negotiations for the sale of Gazprom Neft’s stake in NIS. Outside of continuing to enforce its position of strategic ambiguousness, Serbia has repeatedly stalled in resolving the NIS question, which in turn left the country’s government without any immediate solutions once the sanctions took effect. Vucic has reiterated on a daily basis that Serbia would agree towards any deal that Russia and the US agree with a potential third-party investor for the sale of Gazprom Neft’s stakes in NIS, indicating that the NIS crisis is out of Serbia’s hands despite the country being the primary impacted stakeholder. Russia and Serbia’s relations have significantly deteriorated since the beginning of the war in Ukraine. Russia is distancing itself from the political crisis in the country while Serbia, despite not imposing sanctions on Russia, maintained its EU ambitions as a strategic goal. The key question in the NIS crisis is energy dependence, something that Serbia has been nurturing with its Russian ally for many years. Vucic’s administration has been put in a position where the country’s critical energy infrastructure is dependent on Western payment systems and Russian resource supply. Serbia’s national strategy under President Vucic has been one of continuous political repositioning and reassertion between the great rivaling powers, a balancing act without concrete results and a plethora of negative repercussions for the country. In the NIS situation, the option for immediate resource diversification has been made impossible, since Serbia and by extension Russia, have repeatedly attempted to stall the resolution with Gazprom Neft’s stake in the company. The present situation is exclusively in the hands of OFAC, the US and Russia, since NIS is a crucial strategic asset and Serbia’s position has been made irrelevant due to its heavy reliance on Russia as its single source of energy supply. Vucic’s public statements within the last couple of months resonate more with some form of an auction or a fire sale of Gazprom Neft’s stake in NIS rather than an important geoeconomic issue that could possibly threaten the collapse of Serbia’s national financial system.

The outlined trilateral options for NIS also include underlying strategic complexities which would reflect on the final solution for the crisis. Serbia would most likely force the sale of Gazprom Neft’s majority stake in order not to jeopardize the already fragile strategic relations with Russia, while remaining responsible in front of its citizens and Western partners. The US wouldn’t abandon the sanctions unless an impartial investor appears or Serbia is forced to nationalize the company. Russia would insist on maintaining covert control over its assets while trying at any cost to avoid the nationalization of NIS, even with the reimbursement option.

Who are the key interested parties and how far are the negotiations considering the deadline is 15 Jan 2026?

Gazprom Neft, the subsidiary of Russia’s state-owned Gazprom Group, attempted to restructure its shareholding interests in NIS in Sep this year. The threat of sanctions forced Russia to make a last-ditch effort to reduce its majority shareholding in the company. Gazprom Neft transferred 11,30% of its shares to a Saint Petersburg-based company called Public Joint Stock Company Intelligence, which is part of another subsidiary of the Gazprom Group called Gazprom Capital LLC, a company that manages Gazprom Group’s financial investments. Gazprom Neft now directly holds 44,85% of shares in NIS, however, with the additional 11,30%, the ultimate parent, Gazprom Group still holds the majority ownership with 56,15% of controlled shares in the Serbian company.^[14] The apparent and uncharacteristic attempt by Russia to overtly try to conceal the real ownership of the majority shareholding at NIS was quickly dismantled by the US OFAC and NIS came under sanctions on 09 Oct 2025. Since the imposition of sanctions, Russia was effectively forced to publicly agree to sell Gazprom Neft’s majority stake in NIS, which in turn forced Serbia to publicly denounce any interference in the negotiations regarding the sale, playing the neutrality card once again, even in times when direct national interests are at stake. At the forefront of the race to buy Gazprom out of NIS are several large oil and gas companies such as the Hungarian MOL Group (MOL)^[15] and the UAE state-owned Abu Dhabi National Oil Company (ADNOC).^[16] Previously, there was substantial interest from the Croatian JANAF (Jadranski Naftovod)^[17], the Azerbaijani SOCAR oil company^[18], the Greek Hellenic Energy and Hellenic Petroleum^[19] companies and a company called Flystar Flight Support^[20], a subsidiary of the British-based Menzies Group. Other potential interested parties in buying out Gazprom Neft out of NIS were the Saudi Aramco oil company^[21], British Petroleum^[22], several unidentified private investors from Slovakia^[23], the British Shell^[24] and the American ExxonMobil^[25], which has been mentioned particularly by the CEO of Srbijagas, the state-owned gas company in Serbia, Dusan Bajatovic. Global financial advisory companies such as Xtellus Partners^[26] have also been mentioned, however, their interest in acquiring Gazprom’s majority stake in NIS has been gradually diluted. Presently, MOL and ADNOC remain as the likeliest candidates to replace Gazprom Neft in NIS’ shareholding structure with parallel negotiations between Gazprom officials, the Russian government and representatives from the respective companies.

MOL’s acquisition is also considered attractive since the company has substantially expanded its business and industrial footprint in central Europe and it’s looking to become the major energy player in those parts of Europe. MOL’s ambitions to acquire Gazprom Neft’s stake in NIS were even publicly supported by Hungary’s Foreign Minister Peter Sijjarto and the country’s Prime Minister, Viktor Orban. Serbia and Hungary have traditionally maintained close bilateral relations, both being heavily reliant on Russian energy while recent diplomatic overtures, such as Orban’s trips to Miami and Moscow, have made MOL one of the primary candidates to buy the 56,15% shares from Gazprom. ADNOC is also interesting from a geopolitical stance since Serbia also maintains close strategic relations with the UAE in aspects of economy, bilateral strategic cooperation, infrastructure development and defense. The UAE is also a multidimensional country in terms of relations with both Russia and the US. After the war in Ukraine broke out, most of Russia’s oligarchs found their financial shelters in the UAE, circumventing the sanctions and maintaining control over their assets.

US President Donald Trump earlier this year, during the tour in the Gulf, strengthened the bilateral partnership with the UAE, announcing attractive joint cooperation agreements in the AI industry. ADNOC is currently the favorite in acquiring Gazprom Neft’s stake in NIS, considering that the company is owned by the UAE’s government, which by itself seems like the most sensitive strategic option for all the involved stakeholders. In terms of the negotiations, public information has remained obscure with officials not offering concrete information. Russia’s Foreign Minister, Sergey Lavrov^[27], has recently directly addressed the NIS problem, stating that talks were progressing constructively and the resolution of the problem was nearing its end. Lavrov used the opportunity to accuse the US of unilaterally forcing Russia out of Serbia and also reiterated Russia’s support for the Serbian people. Serbian President Vucic has been briefing the public on a daily basis with statements that mostly emphasized Serbia’s options going forward, as well as claims that the crisis with NIS could be resolved in the upcoming days. The US hasn’t directly addressed the issue, signaling confidence in their sanctions measures and all the potential outcomes emerging from the situation. The latest statements were from President Vladimir Putin who commented on the NIS situation at a press conference where he stated that Russia hoped for a quick and comprehensive resolution of the crisis without it having any significant negative consequences on the bilateral strategic relations between the two countries. Putin also said that Russia remained committed towards devising their bilateral partnership with Serbia even further.

NIS strengths and weaknesses, what makes it attractive for international, non-Russian buyers?

NIS is a company with a history of resilience and defiance in terms of crisis periods throughout Serbia’s history. The company started operating in 1949 when the foundations of the oil exploration and production company were established. Discovering small but historically relevant gas and oil fields across Serbia, the company started gaining significant traction with support from the Serbian government and the banking system in the country, gaining public investment trust and a strong brand reputation. Today, NIS is the energy bloodstream of Serbia, almost every industrial branch, from public to private services, is heavily reliant on NIS’ stable operational abilities which have delivered consistently across the company’s more than seven decades of existence. Under the current market conditions, NIS is positioned as one of the most significant oil and gas assets in the region with its modern refinery located in Pancevo, Serbia. NIS is considered a key strategic asset for both Serbia and Russia from diametrically opposing reasons. The company takes central stage in a small oil market such as Serbia, and thus, considerations regarding the potential weaknesses and strengths of the company are reflecting on the entire oil market in the country.

The Serbian oil market is one of high risk and high reward markets, considering Serbia’s transiting commercial corridors and its geographical positioning while also taking into account the constant geopolitical turmoil, political crises, sanctions and pressure towards the country to abandon its strategic allegiance towards Russia or China. NIS is the primary industrial component on the Serbian oil market, as it has been shown through the existing crisis. The company is exposed to various risks which differ, ranging from political to economic, social and operational aspects. From a political standpoint, NIS is at a critical juncture in its history, when it could potentially either become majority owned by Serbia’s government or represent a realistic opportunity for a renowned foreign investor. The current situation, besides highlighting the scenarios where the company is severely exposed to political risk, also improves the investment outlook and long-term potential for substantial development. Economically, NIS relies heavily on the benevolence of the Serbian government, coupled with the investment priorities of its majority shareholder until now. NIS’s business operations are primarily expanded in Bosnia and Herzegovina, Romania and Bulgaria. NIS also has existing oil operations in Angola^[28], where the company owns an oil field since 1980, and a branch office in Balkanabat, Tajikistan. The company’s market presence is primarily focused on countries that are still in a regulatory and compliance limbo, which could hamper the company’s growth in the mid to long-term, reflecting negatively on the potential investor’s expansion ambitions. Social and operational risks for potential investors in the company come hand in hand. NIS is not a large oil company with immediate positive returns of investment. The company represents a long-term prospective for industrial investment with immense potential to become a major player on the oil market in southeastern and central Europe. Emphasizing the social risks, the company has been functioning under majority Russian management since 2008, with significant progress made in terms of concluding partnerships, updating and improving operational capabilities and expanding its market presence, especially in the petrol and consumer goods industries. NIS controls 80% of Serbia’s fuel supply and represents one of the rare companies that are at the crossroads of Europe’s energy infrastructure in the southeastern parts of the continent. NIS has established a near monopoly situation on the Serbian crude oil market with a network of more than 600 petrol stations in Serbia and more than 400 across Romania and Bulgaria with its refinery on a strategically important location connected with the Danube river, which practically gives the company a long-term relevance considering supply chain and logistical capabilities.

Operationally, NIS also faces several risks in the long-term. The company’s refinery has limited capabilities in terms of processing different types of crude oil, which is mostly imported. Here, considerations need to be made in terms of Serbia’ ambitions to diversify its supply chain of crude oil besides the current import markets such as Iraq, Kazakhstan, Russia, Romania and Croatia.^[29] Another operational risk is closely connected with the limited market outreach the company currently has which stretches to local countries that are constantly adapting their regulations to align with EU energy compliance requirements. In terms of strengths of the company, NIS is crucially positioned to become one of the leading energy players in the region, having access to ground supply routes such as the developing central corridors across the Balkans and river transportation routes through access to the Danube river. Despite its long history, NIS is still a developing company, and any potential investors should calibrate their projections more towards long-term returns instead of immediate investment gains. The potential of the company is reflected in their existing operations abroad such as the ones in Angola and Tajikistan, as well as close partnerships with renowned companies in the oil and gas sectors such as the Italian ENI, the Hungarian MOL, Dragon Oil Holdings, subsidiary of the Emirates National Oil Company (ENOC), based in Turkmenistan, the British Mitro Limited, the Turkish Calik Enerji and Türkmenabat, the state-owned oil and gas enterprise from Turkmenistan.^[30]