US sanctions cripple Serbia over Russian oil, Hungary also affected

Today, 9 October, United States sanctions came into effect against NIS, the Serbian oil company that is majority Russian-owned. Immediate consequences include the shutdown of the Adriatic pipeline (JANAF) and the suspension of bank card payments at NIS petrol stations. Although the Serbian government tried to avoid the restrictions, Washington has now refused Belgrade’s request for a delay for the sixth time.

This decision has serious implications not only for Serbia but for the entire region, particularly Hungary, whose energy systems and oil industry are closely tied to regional infrastructure.

Why did the US act?

NIS – officially Naftna Industrija Srbije – is the country’s largest oil company, operating a refinery and around 330 petrol stations. Its main shareholder is Russian Gazprom Neft (45%), along with another Russian-backed company, Intelligence (11%). The Serbian state owns only 30%, with the rest held by small investors.

The American government opted for sanctions because the company is under Russian influence, and the US aims to limit Russia’s economic presence in the Balkans. Serbian President Aleksandar Vučić has ruled out nationalisation – the only legal loophole – leaving Belgrade in a difficult position.

Consequences: Threat of fuel shortages and price hikes

JANAF, the Adriatic oil pipeline, halted supplies in the early hours of 9 October, meaning Serbia’s only oil refinery in Pančevo will receive no more crude. While the country has significant reserves, experts believe they will last only a few months.

According to a NIS statement, the stations are “prepared to meet consumer demand”, but payments can currently only be made in cash because Visa and MasterCard transactions linked to American payment systems have been suspended.

The Serbian government is trying to reassure the public, but independent energy experts warn that fuel shortages and price surges will be inevitable if the situation persists.

• Hungary is heavily dependent on Russian energy, but public ignorance about the issue is immense

Hungarian interests and MOL’s role

In the crisis, Hungary and its oil company MOL could assume a key role. MOL currently operates 65 filling stations in Serbia and stands ready to take over NIS’s market position should the Serbian company become inoperable.

MOL is one of the region’s most stable players and is unaffected by US sanctions. This could strengthen Hungary’s position in the Balkans’ energy supply, while NIS’s operational problems create new market opportunities for MOL.

Hungarian Foreign Minister Péter Szijjártó criticised the outgoing US administration back in January, calling the decision “politically motivated retaliation”. He emphasised that Hungary and Serbia pursue sovereign energy policies that cannot be influenced by outside pressure. As today’s news shows, the Trump administration has not backed away from sanctions, and although the Hungarian government is unlikely to oppose them given its strong alliance with US leadership, the Orbán–Vučić partnership may weaken as a result.

A blow to Serbia’s economy that could reach the Hungarian market

Crippling NIS is an economic shock for Serbia: the oil company accounts for nearly 12% of the state budget and contributes around 7% to GDP. The fate of more than five thousand employees is uncertain, and the decline in oil production could affect the entire transport and industrial sectors.

Since NIS has until now partly supplied Hungary via the Pančevo refinery, the situation could indirectly impact the Hungarian market – for example, through the underuse of the JANAF pipeline or disruptions in regional supply chains.

The Croatian, Serbian, and Hungarian energy systems are closely intertwined, and the current situation is yet another example of how geopolitical decisions directly affect energy prices in Central Europe.

• Tremendous money and Türkiye behind the Orbán cabinet’s thirst for Russian oil?

Political and economic consequences

In Serbia, the sanctions threaten not only fuel supplies but also the banking system and employment. Foreign banks are expected to freeze NIS’s accounts, complicating wage payments and ongoing operations.

Belgrade’s economic analysts say that without NIS, the country will lose one of its most important revenue sources, and energy independence will be undermined.

For Hungary, however, the crisis also presents an opportunity to expand its influence in the regional energy market. If MOL assumes part of NIS’s role, Budapest could gain strength not only economically but also politically in the Western Balkans, according to Euronews.

Summary

The US sanctions not only cripple the Russian-linked NIS but also paralyse Serbia’s entire oil industry, potentially triggering a chain reaction in the wider region.

Hungary – thanks to MOL’s continued stability in the Serbian market – could find itself in a strategic position, while Serbia’s economy suffers serious losses.