Forbes Srbija: NIS Sourcing Oil from Norway, Guyana, Iraq, Kazakhstan, U.S.

Oil and gas company NIS (BETAPHOTO/EMIL VAS)

While the war in the Middle East rages on, Serbia’s multinational oil and gas company Naftna Industrija Srbija (NIS) has been procuring oil from Norway, Guyana, Iraq, Kazakhstan and the United States, Forbes Srbija reported on March 25.

Asked whether the Middle Eastern conflict and crisis have affected crude oil procurement and whether and to what extent this will influence the domestic prices of oil derivatives, NIS told Forbes that the company continues to adapt its business model.

“We are carefully monitoring the situation on the oil and oil derivatives market and are implementing the necessary measures, all to ensure operational stability, [a steady] crude oil supply and secure output to the market. All NIS gas stations are working regularly and have an uninterrupted supply of every kind of oil derivative,” NIS stated in its response.

According to the State Energy Agency, in 2021, Serbia covered 20.7 percent of its crude oil needs from domestic sources, while 79.3 percent was imported. The imported oil was mainly sourced from Iraq (64 percent), followed by Russia (23 percent), while about 10 percent was procured from Kazakhstan and 3 percent from Norway.

Although the Serbian public largely believed that, following the privatization and sale of NIS to Gazprom Neft, all of the company’s oil came from Russia, this was not true. In fact, Russian crude oil comprised between a fifth and a quarter of imported oil. Even then, the majority of NIS’s supply came from Iraq, Forbes writes.

Further citing the Energy Agency, Forbes explains that, in 2022, Serbia imported 3.234 million tons of oil, of which 52 percent came from Iraq and the remainder from Russia and Kazakhstan. Due to the war in Ukraine and the EU’s sanctions on Russia, NIS at one point increased Russian oil imports from an average of 23 percent to nearly 50, simultaneously reducing procurement from Iraq. This changed with the sixth package of sanctions, when the EU banned the purchase, import and transport of oil from Russia. Since Serbia was not granted an exception from these measures, the import of Russian crude oil was stopped.

Meanwhile, the U.S. Office for Foreign Asset Control (OFAC), renewed NIS special operating license on March 24, the day the deadline expired from Hungary’s MOL Group and Gazprom to reach an agreement regarding the sale of Russia’s majority stake in NIS. MOL announced that it received permission to complete the deal by May 22. In other words, the two sides have been granted another two months to finalize the sale.

Several days prior, the OFAC also extended NIS’s crude oil procurement license until April 17. It is expected that this permit will subsequently be extended once more, to May 22, when NIS is expected to finally change hands.