Jorgić: If the license of NIS is not extended, possible sanctions as early as July 2

The situation surrounding the potential expiration of the U.S. license for Serbia's Naftna Industrija Srbije (NIS) has raised concerns about possible sanctions and their impact on the country’s energy sector. According to Branislav Jorgić, a brokerage expert, the extension of NIS’s license remains uncertain, and without such an extension, Serbia could face sanctions as early as July 2nd. This comes amid ongoing negotiations involving NIS, Hungary’s MOL, and Russia’s Gazpromneft regarding the transfer of ownership of a significant share of Gazpromneft.

Less than 24 hours remain until the expiration of the American license allowing NIS to operate, as well as the permit that enables the Hungarian company MOL to finalize its purchase of a majority stake in the Russian firm Gazpromneft. These developments have been highlighted by Radio-televizija Srbije (RTS). On June 26th, NIS submitted a new request to the Office of Foreign Assets Control (OFAC) for an extension beyond July 1st. The application emphasized that extending the license is crucial for the proper supply of the Serbian market with crude oil.

According to Jorgić, the decision will depend on how the U.S. administration evaluates the arguments presented by NIS, MOL, and Gazpromneft. He explained that OFAC would assess these arguments and make a decision—either to extend the license for a certain period or to abandon the extension altogether and begin implementing sanctions. Jorgić noted that while the negotiations over changing the ownership structure are complex, they cannot continue indefinitely. “The sooner an agreement is reached, the better for Serbia,” he stated.

He warned that without a new extension, the expiration of the license could lead to the implementation of sanctions, which would primarily affect the supply of crude oil. This would result in a halt in the flow of fresh crude oil through the Janaf pipeline. While NIS currently holds some reserves of crude oil and derivatives, there would still be issues with distribution. Additionally, companies continuing to cooperate with NIS could expose themselves to secondary sanctions.

Jorgić believes the current situation highlights the need for Serbia to think long-term and reduce its dependence on fossil fuels. He emphasized that academic institutions and experts should work on developing a long-term strategy for the energy sector to increase domestic energy production and decrease reliance on imported energy sources. Such a project must be part of a national strategy that does not depend on changes in government. He stressed the importance of starting today to achieve greater energy independence within a decade.

The issue of the license extension has brought attention to the broader implications for Serbia’s energy security and economic stability. As the deadline approaches, all parties involved are under pressure to reach a resolution that avoids sanctions and ensures continued access to essential resources. The outcome of this situation will likely influence not only the immediate operations of NIS but also the strategic direction of Serbia’s energy policies moving forward.