State Department On NIS Sanctions: “We Don’t Preview Actions” But Pledges To Disrupt Russia’s Financial Networks

The U.S. State Department has declined to confirm whether sanctions are being considered against Naftna Industrija Srbije (NIS), Serbia’s largest oil company, which is majority-owned by Russia’s Gazprom.

In a response to The Pavlovic Today on Monday, a State Department spokesperson said, “The U.S. does not publicly preview sanctions actions,” sidestepping growing speculation about Washington’s next move.

However, the spokesperson reiterated the Biden administration’s unwavering commitment to undermining Russia’s war economy, emphasizing that the U.S. remains “committed to disrupting Russia’s revenue generation and the procurement and financial networks used to support its war against Ukraine.”

The administration also pledged to “continue to take all appropriate actions to promote accountability for those who enable or profit from Russia’s illegal war.” Highlighting the broader strategy to safeguard global stability, the spokesperson added, “We will continue to work with countries and companies around the world to ensure the security of energy supplies and to mitigate against price shocks affecting the global economy.”

The lack of clarity regarding potential sanctions raises critical questions about how Washington intends to further isolate Moscow without destabilizing regional energy markets or Serbia’s delicate geopolitical position.

The Pipes of Influence

Once hailed as a game-changer for Serbia’s energy future, the 2008 NIS deal with Gazprom now finds itself at the center of intensifying geopolitical tensions. 

In 2008, under the administration of then-Serbian President Boris Tadić, a historic agreement with Russia was brokered in Moscow. The deal, which transferred majority ownership of Serbia’s Oil Industry (NIS) to Russian state-controlled energy giants Gazprom and Gazprom Neft for €400 million, was promoted as a cornerstone of Serbia’s energy independence. Alongside the sale, ambitious plans for a gas pipeline and underground storage facility were announced, promising economic prosperity and regional influence.

“This is more than a business deal,” Tadić proclaimed at the time, describing the agreement as a “strategic alliance” with Russia that would tie the economies of both nations together. The crowning jewel of the arrangement was Serbia’s inclusion in the “South Stream” pipeline project, which aimed to make Serbia a vital hub for Russian gas transit into Southeast Europe.

However, the optimism surrounding South Stream unraveled in 2014, when the project was abandoned. The European Union’s energy regulations, which barred companies from owning both gas and the pipelines transporting it, forced Russia to shelve its plans.

South Stream was replaced by TurkStream, which redirected Russian gas through Turkey, Bulgaria, Serbia, and Hungary.

Serbia joined TurkStream in January 2021.

The Sanctions Blowback

The geopolitical stakes intensified as early as in 2014, when the EU and the U.S. imposed sweeping sanctions on Russia following its annexation of Crimea. These sanctions targeted key sectors, including energy, and placed restrictions on companies such as Gazprom Neft, Rosneft, and Transneft. The measures barred these firms from financial transactions and accessing EU markets, sending ripple effects across their subsidiaries, including Serbia’s NIS.

For NIS, the sanctions meant limited access to external financing. Unable to rely on traditional Western banks, the company turned to Serbian, Russian, and Arab financial institutions. According to NIS’s 2020 business report, over €700 million in new credit lines were negotiated between 2019 and 2020 to stabilize operations and fund future projects.

The Biden Era and What’s Next

In the closing weeks of the Biden administration, speculation over potential U.S. sanctions on Serbia’s oil company (NIS) has grown. While the State Department has not confirmed any plans, it has also stopped short of ruling them out.

Attention now shifts to the incoming administration. With Donald Trump set to return to the White House, uncertainty looms over how his approach to Russia—and by extension, NIS—will shape U.S. policy in the months ahead.