Serbia’s sole oil refinery in Pančevo suspended production on December 2 after US sanctions blocked its supply of crude oil, the state-linked company Oil Industry of Serbia (NIS) said.

NIS, majority-owned by Russia’s Gazprom group, has been unable to secure new crude shipments since the sanctions took effect on October 9, which blocked deliveries via Croatia’s JANAF pipeline.

Pančevo is Serbia’s only refinery and a key supplier of domestic fuel, producing about 1.5mn tonnes of diesel annually — roughly two-thirds of national consumption — along with 74% of gasoline and over 95% of kerosene.

“The suspension of production is due to the lack of crude oil caused by US sanctions,” NIS said. It added that the plant remains in a “ready state” and employees are performing routine maintenance. NIS said it continues to supply the domestic market from existing reserves.

The National Bank of Serbia has signalled it would suspend financial transactions with NIS if the US does not grant a special licence to operate, a step mirrored by commercial banks, potentially leaving the company unable to pay employees or suppliers.

NIS has been under US sanctions since January 2025 due to its Russian ownership, though enforcement was delayed for several months. Belgrade’s options are limited: the country’s reliance on Russian gas constrains aggressive measures, such as nationalisation, which could trigger retaliation and further energy disruptions.

On November 25, Serbia gave Russia 50 days to sell its 56.15% stake in NIS or face a state takeover. Media reports have speculated that Abu Dhabi’s ADNOC and Hungary’s MOL are potential buyers. A government takeover is seen as a last resort, given the high cost of compensating Russia and the risk to gas supplies.

NIS said it hopes to resume full operations once crude oil becomes available and remains committed to maintaining stability for its 13,500 employees.