OMV Halts Operations with Serbian NIS Due to US Sanctions

The Austrian oil, gas, and chemical company OMV has ceased its fuel procurement from the Serbian energy firm Naftna Industrija Srbije (NIS), which is primarily owned by Russia's Gazprom Neft, following impending US sanctions. In a statement to Reuters, OMV clarified that it will now independently manage the supply for its network of service stations in Serbia.

OMV operates 64 service stations in Serbia, and the company is sourcing fuels from various European refineries. The fuels will be transported via inland shipping along the Danube River to Serbia. OMV has access to its own products from refineries located in Austria and Romania and is considering smaller quantities from other available sources.

Meanwhile, Eko, another fuel provider in Serbia, has also confirmed that it is now independently managing its supplies to the market. NIS is a critical player in Serbia's energy landscape, operating the only refinery in the country located in Pancevo. The company meets approximately 80% of Serbia's demand for gasoline and diesel and over 90% of the requirements for jet and heavy fuel oil.

The anticipated US sanctions have created significant uncertainty in Serbia's fuel market. Serbian President Aleksandar Vucic recently warned that the country could face a loss of access to oil imports if the sanctions take effect.

The US Treasury had designated NIS as a sanctioned entity back in January, granting Gazprom a 45-day period to withdraw its operations. This timeline has since been extended through two consecutive 30-day exceptions.

In response to these developments, NIS has adjusted its procurement strategy, discontinuing its previous reliance on long-term crude oil contracts. The tender for 2025 was reportedly canceled on the company's procurement platform. NIS is now acquiring crude oil on a short-term basis from the spot market with international traders willing to maintain business relations--a strategic shift that has not been publicly disclosed until now.

NIS has stated that it recently managed to purchase crude oil under the current exemption rules and is utilizing multiple suppliers, although no further details were provided. The company emphasized that it is adapting its operations to the newly established circumstances.

However, fully replacing NIS's production through imports is considered challenging due to Serbia's limited transportation capacities by ship, rail, or truck. Market participants indicate that the country's daily diesel requirement ranges between 44,000 and 49,000 barrels, while the gasoline demand is approximately 14,000 barrels. NIS has assured that it can fulfill all contractual obligations, including those to major consumers such as other oil companies. According to company claims, the refinery in Pancevo continues to operate normally.