NIS and Russian Gas Deadlines Both Fall on September 30

The US Office of Foreign Assets Control (OFAC), the Treasury Department body responsible for enforcing sanctions, has extended NIS’s operating license until September 30. The same date marks the deadline for the arrangement covering Russian gas deliveries to Serbia, so Belgrade is waiting this month for two answers on the same day, one from Washington and one from Moscow.

Oil is trading on world markets at around 90 dollars a barrel. Gas prices on the Dutch TTF exchange, the benchmark for the European market, have risen 130 percent since the start of the year. European gas storage is filled to just over 50 percent of capacity, while Serbia’s own storage facilities are full, with additional volumes held in leased storage in Hungary.

Two deadlines, same day

The overlap in deadlines is less of a coincidence than it looks. Serbian President Aleksandar Vucic said recently that he hopes negotiations between Russia and Hungary, with Serbia taking part, could wrap up this September over Hungarian company MOL’s takeover of NIS, a deal that would also need American approval. NIS has been under US sanctions over its majority Russian ownership, and the refinery in Pancevo has kept the market supplied on oil and fuel reserves, the same reserves Serbia has relied on ever since OFAC started issuing the company a monthly license a year and a half ago.

What was Serbia paying for gas in March?

The gas arrangement with Russia has been extended in three or six month cycles ever since the three year contract signed in May 2022 expired in May 2025. The previous extension was announced on March 30, 2026, and ran for three months, until June 30, on the same terms as before: six million cubic meters a day, with the option to draw more when it turns cold. At the time, President Vucic said Serbia had secured “another three month extension of the gas contract, on very favorable terms.”

The price Serbia was paying at the time was between 320 and 330 dollars per 1,000 cubic meters, while gas on the exchange was selling for around 645 dollars at that point. Here is how Vucic described the terms at the time:

The extension of the contract is under the same terms, six million cubic meters of gas a day, and flexible so that we can draw more if it’s cold.

FEFA Faculty professor Goran Radosavljevic, quoted by Nova ekonomija after that extension, believes the pattern of short term deals is not a good sign. In his assessment, Hungary has a gas arrangement with Russia signed for 15 years, so there is no economic reason why Serbia, as a regular buyer, should not get something similar, and to him that is a sign something is wrong in the relationship between the two sides.

Reserves instead of a long term contract

Energija Balkana editor Jelica Putnikovic believes the short cycles do not actually threaten supply: “Our arrangement has already been extended for three or six months at a time over a longer period, so there will be gas.” The lesson of this whole year, she adds, both globally and locally, is that having your own reserves matters most: “The most important thing is to secure the largest possible reserves of energy sources on your own territory.” She points to China as an example, whose oil reserves, estimated at the size of a full year’s consumption, kept the conflict in the Middle East, which halted transport of a fifth of the world’s oil and an equal share of gas from the Persian Gulf, from triggering an uncontrolled price spike.

Bajina Basta and Bistrica 2

On electricity, Serbia got through its summer peaks in consumption by relying on the Bajina Basta reversible hydropower plant. As Putnikovic puts it, “in a situation like this, it’s fortunate that we have the Bajina Basta reversible hydropower plant, which was vital for supply.” Elektroprivreda Srbije (EPS), the state power utility, imported a smaller share of electricity, but only when market prices were lower, then used energy stored in that hydropower plant during peak consumption hours to cut back on imports.

A second reversible hydropower plant, Bistrica 2, is under construction. Its first electricity is expected in 2032: “Bistrica is something that is already being built, I think it should start producing electricity in 2032,” Putnikovic says. There are also plans for a gas fired power plant near Nis, which would be built with Azerbaijan, so that its fuel supply would not depend on the open market.

Why does Brussels pay more?

Putnikovic also points to a paradox that, in her view, the European Union has yet to answer:

On one hand we have politicians in Brussels claiming Europe can do without Russian energy, and on the other we have their own businesspeople who are bitter because energy costs them more.

She notes that this year, even with a full ban on Russian oil and gas imports in force, Europe has imported more Russian natural gas than before, at the expense of liquefied gas that mostly came from the United States, and that Russian LNG has started arriving even in Spain, which had not bought it until now. Part of the answer, she says, also depends on citizens themselves: “People need to replace their windows and doors, insulate their walls and cut consumption, and gradually become producers of electricity themselves.”

America, elections and the price of gasoline

The Energija Balkana editor expects the energy market, oil in particular, to calm down ahead of the US midterm elections for Congress, scheduled for November 3. She explains why:

Trump’s popularity in America is falling and he has to watch out for the Congressional elections, and one way to come out of them better is for energy to get cheaper.

Until then, according to Bloomberg Adria, a new and longer gas agreement with Russia could be signed as early as September 20, ten days before both the NIS license and the current arrangement expire, with the annual volume increased from two to 2.5 billion cubic meters of gas. Until then, both questions, the one from Washington and the one from Moscow, remain open.