The standoff over the Petroleum Industry of Serbia (NIS) has brought long-simmering tensions between Russia, the West, and Serbia to a boiling point. Here's what you need to know about the unfolding crisis:
1. The Immediate Crisis: Refinery Shutdown Looms
Serbian President Aleksandar Vučić confirmed that the United States has not yet issued a decision on extending the operating license for NIS, which has been under US sanctions since 9 October due to its majority Russian ownership.
Without a license extension, the Pančevo oil refinery—which supplies most of the Serbian market—faces complete shutdown due to lack of crude oil for processing. Authorization has already been given for the refinery to halt operations.
"NIS will decide whether the refinery stops today or in the coming days," Vučić stated at a press conference following a meeting with teams responsible for energy stability and security.
2. Russia's Stance: Politics Over Money
According to President Vučić, Moscow is refusing to sell its stake in NIS despite mounting pressure.
"Russia does not want to sell its stake in NIS. It's not about money, it's about politics," Vučić declared.
On 25 November, the Serbian Government adopted a decision giving Russia 50 days to find a buyer for its stake. If no deal is reached, Serbia will impose its own management at NIS and offer Russia "the highest possible price" for the company.
Neither the US nor Russia has publicly released information on the state of negotiations, leaving Serbian citizens dependent on updates from their own officials.
3. Russia's Remaining Leverage in Serbia
According to Vuk Vuksanović, Senior Researcher at the Belgrade Centre for Security Policy (BCSP), Russia maintains three key instruments of influence in Serbia: energy, the unresolved Kosovo dispute, and its popularity among the local population.
"Once the ownership of NIS changes, Russia will lose one of these three instruments, but the remaining two will stay in place and will most likely endure even after a possible change of government in Serbia," Vuksanović told European Western Balkans.
He added that even without NIS, "Russia, if the ownership structure in NIS changes, can play the card of punishing Serbia's leadership through gas supplies and pricing."
4. A Pivot to China, Not the West?
Experts suggest that Belgrade may not be looking westward for alternatives. Political scientist Aleksandar Đokić argues that Serbia's government does not share ideological ground with Brussels, and Washington under the Trump administration shows little interest in the region's democratic development.
"I think the domestic regime would like to replace Russia with China in its game of balancing between Brussels and Washington," Đokić told European Western Balkans.
Vuksanović echoes this sentiment, noting that Serbia's leadership—internally weakened following the Novi Sad tragedy—cannot afford to alienate voters favorable to Russia and China, who form a core electoral base.
"At this stage, the regime is so wounded that it cannot turn its back on any external actor, making its international positioning chaotic and dysfunctional," he said.
5. Why Wasn't This Resolved Earlier?
Warning signs that NIS could face sanctions emerged soon after Russia's invasion of Ukraine, when the EU introduced its first sanctions packages. Despite messages urging Belgrade to align with these measures, no lasting solution was found.
Vuksanović believes the government postponed decisions hoping for a normalization of US-Russia relations while avoiding "angering" Moscow.
"Although a few years ago, Hungary's MOL was mentioned as a potential new owner of NIS, I don't think that is an option anymore. Washington is calculating that Hungary's energy sector will come under scrutiny within a year," he explained.
A potential buyer from the United Arab Emirates is now being discussed, given the country's strong relations with both Russia and the US, and Serbia's close ties with the Gulf state.
Đokić emphasized that the US is serious about enforcement: "Let's recall that Lukoil attempted to sell its foreign assets to Gunvor... The Americans rejected that deal, demonstrating the seriousness of their intentions. The same will apply in Serbia: there will be no pouring from empty to empty."
Source: European Western Balkans, including reporting by Sofija Popović originally published on Savremena politika portal, 27 November 2025, contributed to this analysis. The article is available at: https://europeanwesternbalkans.com/2025/11/27/could-the-serbian-government-break-with-moscow-over-nis/
Photo: Gemini AI