Hungary increases oil supplies to Serbia after US sanctions cut off supplies to NIS refinery
Gazprom will have to give up its shares in NIS Photo: OLIVER BUNIC / AFP / Profimedia
The Hungarian company MOL will increase the supply of crude oil and fuel to Serbia, after the supply of the NIS refinery, controlled by Russia, was blocked as a result of the American sanctions, Foreign Minister Peter Szijjarto announced on Wednesday, News.ro reports citing the Reuters agency.
The US Treasury, through the Office of Foreign Assets Control (OFAC), imposed sanctions on NIS in October as part of a new wave of measures against the Russian energy sector, following several waivers granted in January. As a result, deliveries through the Croatian JANAF pipeline have been suspended, which – according to the Serbian government – could lead to the shutdown of the refinery this week if the sanctions are not postponed.
Szijjarto said MOL doubled deliveries to Serbia in November and will supply two and a half times the usual volume of crude oil and fuel in December.
“Hungary will use all available means to ensure the continuity of oil supplies to Serbia,” the Hungarian minister said after a meeting in Belgrade with Serbian Energy Minister Dubravka Djedovic Handanovic.
Hungary, led by Prime Minister Viktor Orban, close to US President Donald Trump, imports most of its crude oil from Russia and some through the JANAF pipeline from Croatia.
Serbia could take control of NIS
Serbian President Aleksandar Vucic said on Tuesday that Belgrade would give the Russian shareholders of NIS, Gazprom Neft and Gazprom 50 days to sell their stakes. Otherwise, the Serbian state will take over the operations and make a purchase offer.
Both the president and the energy minister warned that Serbia must obtain an operating license from OFAC by the end of Wednesday to keep the refinery operating.
“We will see, I hope today or tonight, what answer we will receive. It is essential that operations are not interrupted and the market remains supplied”, declared Djedovic Handanovic.
The speaker of the parliament, Ana Brnabic, stated that the government majority is preparing an amendment to the budget law to allow Serbia to take control of NIS from the Russian shareholders.
Gazprom Neft owns 44.9% of NIS, Gazprom 11.3%, the Serbian state 29.9%, and the rest belong to small shareholders.
Hungary and Serbia accelerate plans for joint pipeline
Peter Szijjarto also said that Hungary and Serbia are ready to accelerate the construction of the planned pipeline that will connect the two countries.
In April, he had stated that this pipeline could fully cover Serbia's crude oil needs until 2028.
