MIDDLE EAST CRISIS CHANGED EVERYTHING: Here are the countries the Oil Industry of Serbia procures oil from!

The Oil Industry of Serbia (NIS) is procuring oil from Norway, Guyana, Iraq, Kazakhstan, and the USA during the war in the Middle East, Forbes Serbia reports today.

When asked by Forbes whether they are facing problems with crude oil procurement due to the war and crisis in the Middle East, and to what extent this situation will affect the prices of petroleum derivatives, NIS replied that the company continues to adapt its business models.

“We are carefully monitoring the development of the situation in the market for oil and petroleum derivatives and are taking appropriate measures. This is with the aim of ensuring business stability, crude oil procurement, and security of supply to the market. All NIS gas stations are operating regularly and are properly supplied with all types of petroleum derivatives. Fuel sales are proceeding normally and without interruption,” they stated in the response.

Prices under state control

Regarding the price of derivatives, the company emphasized that it respects all decisions of the competent authorities, including the decree of the Serbian Government on limiting the price levels of petroleum derivatives.

A source for Forbes confirmed that the situation is not critical, thanks to the fact that NIS has a modernized refinery that allows it a greater range of choices.

“Oil is literally bought wherever possible and from whoever has available oil that can be processed at the Pančevo refinery,” explains a source well-versed in crude oil trading for Forbes Serbia.

Serbia’s dependence on oil imports

According to data from the Energy Agency from 2021, Serbia covered 20.7 percent of its crude oil needs from its own capacities, while 79.3 percent was imported. Looking at the import structure according to that data, 64 percent of the oil was procured from Iraq, about 23 percent from Russia, 10 percent from Kazakhstan, while about three percent was imported from Norway.

Although public belief after the privatization of NIS by Gazprom was that crude oil arrived at NIS exclusively from Russia, that was actually not true. Russian oil on average accounted for between a quarter and a fifth of the total imported oil. Oil imported from Iraq dominated, writes Forbes.

According to the same data, 3.234 million tons of oil were imported into Serbia in 2022. Most of the crude oil imports, about 52 percent, came from Iraq, while the rest arrived from Russia and Kazakhstan. Due to the war in Ukraine and EU sanctions against Russia, NIS at one point increased the import of Russian oil from an average of about 23 percent to nearly half. Simultaneously, the share of Iraqi oil imports was reduced.

EU sanctions cut off Russian oil imports

The situation changed with the sixth package of sanctions against Russia when the EU prohibited the purchase, import, and transport of oil arriving from Russia. Serbia did not receive an exemption from the application of that measure at the time, so the import of Russian oil was terminated.

Yesterday, on the day the deadline expired for the agreement between MOL and Gazprom regarding the sale of the majority stake in NIS, a new permit arrived from the American OFAC. The Hungarian company MOL announced it received a permit to complete this transaction by May 22. In other words, the negotiators have been given another two months to reach an agreement.

A few days earlier, OFAC extended the license for NIS to import crude oil until April 17. The assumption is that after this deadline expires, it will be extended further until the new May deadline for the exit of Russian ownership from NIS.