Serbia calls for Hungarian help

In the picture released by the Press Office of the Prime Minister, PM Viktor Orbán (right) receives Serbian President Aleksandar Vucic (left) at the Hungarian-Austrian-Serbian summit at Várkert Bazaar on 3 October 2022. MTI/Miniszterelnöki Sajtóiroda/Fischer Zoltán

Even though it is not a member of the EU, Serbia is still seriously affected by the EU sanctions against Russia. That is because it could indirectly find itself in a situation where its oil imports are blocked. Thus, the country’s leadership is trying to ease Serbia’s 100 percent dependence on oil and gas from Russian sources. In this, the energy cooperation that has started between Hungary and Serbia could play a major role.

The country is in a tight spot because it is vulnerable to the indirect impact of EU sanctions against Russia. Serbian President Aleksandar Vucic, in an interview with the Financial Times, described a number of initiatives to end Serbia’s dependence on Russian energy. Among these, energy cooperation with Hungary could play a prominent role, napi.hu writes.

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“It’s crazy that we didn’t think about the regional interconnection of energy infrastructure before,” said the Serbian head of state, “we didn’t prepare for the war in Europe, which will change everything.” In recent years, Serbia has imported all its gas and half of its oil from Russia. Now, however, it is the case that, due to the entry into force of the EU oil import embargo, from December, oil from Russian sources cannot be shipped from Croatia to Serbia.

In addition, unless Brussels makes an exception to the restrictions on Russian ownership, NIS (the Serbian oil company) will not be allowed to do business with European companies. The end of the story may be that it will have to close shop after receiving its entire oil supply via Croatia through the Adriatic pipeline.

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MOL might be able to help Serbia with this. According to three sources familiar with the situation, several groups considered buying a majority stake in Gazpromneft’s majority owner, Financial Times writes. These include the Serbian government and Hungarian energy company MOL. However, negotiations on a sale have stalled. MOL did not wish to comment on the issue.

Vucic says they should consider all options, including alternative sources of oil, but if the restriction on ownership comes into force, it will cause serious problems. If NIS is isolated in the market, they will intervene, but they are not there yet. Vucic held separate talks with Hungarian Prime Minister Viktor Orbán on the possibility of Hungarian-Serbian energy cooperation.

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Source: napi.hu, Financial Times

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1 Comment

Norbert says:

08/11/2022 at 08:48

Wow. Another country without an Energy Plan B.

From the Financial Times:

“Moscow’s acquisition of Serbian gas storage and oil refinery operators and Belgrade’s more recent failure to secure long-term alternative supplies have left the landlocked country exposed as the EU targeted Russian energy after its invasion of Ukraine. In recent years Serbia has imported all of its gas and up to half of its oil from Russia”

I”NIS ((the Serbian oil company with Russia’s Gazpromneftpart as majority owner) can operate normally because its refineries have been retooled to handle oil from Iraq” this is interesting because MOL / our Politicians have insisted this retooling is pretty nigh impossible.