Serbia's Crucial Week: Negotiating Fuel Security Amidst Russian Divestment

Serbia faces a critical decision to secure fuel supplies from the Russian-owned NIS refinery without resorting to nationalisation. Amid U.S. pressure for Russian divestment, Serbia aims to make a competitive purchase offer to maintain operations. Gazprom Neft and Gazprom hold controlling stakes, with potential economic impacts if sanctions persist.

Serbia has a week to determine steps to protect fuel supplies from its Russian-owned NIS refinery, President Aleksandar Vucic announced on Sunday. The announcement comes as the United States urges a complete Russian withdrawal from NIS, Serbia's unique refinery, and grants the facility's owners a three-month timeline to secure an alternative buyer.

Banks have already immobilized NIS transactions, and projections suggest the refinery can sustain operations only until November 25, emphasizing the urgency of the situation. 'The decision must be made over the next seven days; the refinery must operate,' Vucic stressed during a government session broadcast live.

Serbia prefers to steer clear of nationalising Russian assets and stands ready to make a more favorable market offer should Russian negotiations with potential Asian and European investors stall. Gazprom Neft and Gazprom, holding a dominant 56% stake in NIS, have informed the U.S. Treasury's OFAC about their intent to transfer control. Prolonged NIS sanctions could negatively influence Serbia's economy and investment prospects, Finance Minister Sinisa Mali cautioned.

(With inputs from agencies.)