The US plans to sanction Serbia’s NIS due to Russian ownership, straining Serbia’s diplomatic ties with both Russia and Western countries. Serbia explores reducing Russian ownership to avoid sanctions.
The United States is preparing to impose sanctions on Serbia’s largest oil and gas company, Naftna Industrija Srbije (NIS), due to its significant Russian ownership. The potential sanctions could severely strain Serbia’s diplomatic relations with both Russia and Western nations.
Russian Control Over NIS Sparks Sanctions Threat
Serbian President Aleksandar Vučić revealed that the U.S. plans to target NIS, primarily due to its ownership ties with Russian energy giants Gazprom and Gazprom Neft. Gazprom holds 6.15% of NIS shares, while Gazprom Neft controls a substantial 50%. The remaining shares are owned by the Serbian government and smaller shareholders.
In an interview with Informer TV, Vučić confirmed that the U.S. would impose sanctions on NIS because of its Russian ownership, adding that the UK and the European Union may follow with similar actions. This announcement raises significant concerns over Serbia’s diplomatic positioning, particularly in relation to both Russia and the West.
Potential Diplomatic Fallout for Serbia
Vučić expressed concern that the sanctions would damage Serbia’s relationship with Russia. “This will create problems with our Russian friends — politically and otherwise,” he said during an interview with Al Jazeera’s Serbian service. While Serbia has not yet received official confirmation from the U.S. Treasury Department, Vučić anticipates the sanctions will be implemented soon.
The sanctions could complicate Serbia’s longstanding neutral stance between Russia and the West, forcing the country to navigate delicate diplomatic challenges. While Serbia has condemned Russia’s invasion of Ukraine in international forums like the United Nations, it has refrained from imposing sanctions on Moscow, further complicating its balancing act.
Serbia’s Efforts to Mitigate Sanctions Impact
In a bid to prevent sanctions from destabilizing its diplomatic relations, Vučić hinted at a potential restructuring of NIS’s ownership. He revealed plans to explore options to reduce Russian ownership of the company to below 50%, signaling a move that could help Serbia avoid the economic and political consequences of sanctions while maintaining relations with both Russia and Western powers.
“Reducing Russian ownership in NIS is a potential solution, and we will discuss this with our Russian partners,” Vučić explained. This strategy, while still under consideration, aims to protect Serbia’s energy sector and its political ties with Moscow, which has been a key ally for Serbia in recent years.
The looming sanctions on NIS reflect the growing tensions between Serbia’s historical ties to Russia and its aspirations for greater integration with Western institutions. The Serbian government faces a delicate balancing act, working to safeguard its interests while navigating the complex geopolitics surrounding its energy sector. As the situation develops, Serbia’s ability to manage its relationships with both Moscow and Western nations will be crucial in determining the nation’s future diplomatic path.