Without NIS Licence, Fuel Supply Falls to State Reserves

Eight days before the US operating licence expires on July 31, Serbia’s Minister of Mining and Energy, Dubravka Djedovic Handanovic, has for the first time publicly named state reserves as a supply scenario. The message is blunt: if the licence is not renewed, imports will no longer be able to sustain fuel flows, leaving stockpiles as the fallback.

Naftna Industrija Srbije (NIS) has operated under sanctions from the Office of Foreign Assets Control (OFAC) since October 9, 2025, owing to its Russian majority ownership. OFAC extended the operating licence, along with a separate licence covering ownership talks between MOL and Gazprom Neft, until July 31. Eight days remain before that deadline, and its outcome will determine how the Pancevo refinery runs through the summer.

Why the state is counting on reserves

The minister stated plainly that without a renewed licence, supply would depend on state reserves, because imports have been considerably hampered. Several factors are squeezing logistics and price at once. The Danube water level is very low, limiting river transport of crude and products; consumption is at its seasonal peak; and import prices and costs are high. Each element raises the cost of supply on its own, and together they shrink the room to maneuver.

A new licence, in the minister’s words, would allow maximum processing at the Pancevo refinery so that domestic output can offset the decline in imports. That is the essential difference between the two scenarios. In the first, the refinery runs at full capacity and the market is supplied from domestic processing. In the second, refining is constrained and imports are difficult, so reserves are drawn down, reserves that are by definition finite and meant for emergencies, not routine supply.

Tomislav Micovic, secretary general of the Association of Oil Companies of Serbia, also took part in the discussion, shifting the topic from state administration to the sector that depends operationally on the outcome. For derivative traders and fuel distributors, extending the licence is not a diplomatic question but one of supply continuity over the coming weeks.

What does a renewed licence change for the market?

Until now, public discussion around NIS has centered on ownership and the MOL-Gazprom Neft talks. This is the first time state reserves have been explicitly cited as a working scenario, shifting the focus from the long-term ownership question to a short-term one: whether there will be enough fuel on the market in August.

If the licence is renewed, the Pancevo refinery keeps running and domestic processing takes on the load that imports can no longer fully carry. If there is no extension, reliance on reserves remains, with all that implies for price stability and supply security during the peak-consumption season. Eight days leaves little room to delay the decision.

For now, what is on the table is clear: maximum processing at Pancevo versus drawing down state stockpiles. What remains unknown is when, and on what terms, OFAC will decide. Do you expect the licence to be renewed before the deadline, or will the market really have to reach for its reserves?