Sanctions imposed by the United States on Serbia’s sole oil refiner, Oil Industry of Serbia (NIS), took effect on October 9, ending months of postponements and raising fears of fuel shortages and wider economic disruption in the Balkan country.

The US Treasury’s Office of Foreign Assets Control (OFAC) said its measures against the Russian-owned NIS are now fully enforced after eight temporary licences expired. Washington placed the company on its sanctions list in January over its Russian ownership, part of a broader effort to limit Moscow’s energy revenues funding the war in Ukraine.

President Aleksandar Vucic said on October 9 the move would have “extremely heavy consequences in economic, political and every other sense,” adding that it was “bad news for our country in many ways”. He said he spoke with the Russian ambassador and would continue discussions with “American partners” but stressed Belgrade would not nationalise NIS and seize Russian-owned assets.

Gazprom Neft holds 44.9% of NIS, while another Gazprom subsidiary Intelligence owns another 11.3%. The Serbian government retains a 29.9% stake.

NIS supplies around 80% of Serbia’s diesel and gasoline, and nearly all of its jet fuel and heavy fuel oil. Vucic warned the refinery in Pančevo, near Belgrade, could operate only until November 1 without new crude inflows. He said the country had sufficient reserves for now and urged citizens not to panic.

Croatia’s Adriatic pipeline operator JANAF confirmed it had stopped delivering crude to Serbia on October 8, citing the expiration of NIS’s US licence. The suspension complicates Serbia’s fuel imports and has already disrupted payments: NIS said customers could no longer use Visa, Mastercard or American Express cards at its 350 gas stations.

Economists said the sanctions could ripple across Serbia’s banking, transport and agriculture sectors. “No bank in the world would risk violating US sanctions,” Vucic said earlier this week.

Air Serbia and other airlines sourcing jet fuel from NIS now face higher costs, while ordinary Serbs reported problems with payments at petrol stations on October 9.

Belgrade-based economist Goran Radosavljevic said Russia was unlikely to divest from NIS despite speculation about ownership changes, calling the company “politically far more important than economically.”

Croatia’s Economy Minister Ante Susnjar said Zagreb was ready to consider buying a stake in NIS to ease regional energy concerns, though Vucic responded mockingly with a counter-proposal that Serbia could acquire Croatian utilities.

Despite condemning Moscow’s invasion of Ukraine at the United Nations, Serbia has refused to join EU sanctions on Russia while seeking to advance its EU membership bid. The country remains heavily reliant on Russian natural gas, with talks underway on a new supply contract.