Naftna Industrija Srbije (NIS) recorded a significant financial recovery in the first half of 2026, reporting RSD 9.8 billion in net profit after a RSD 3.6 billion loss in the same period a year earlier. However, the company’s operating outlook remains closely linked to the renewal of sanctions-related approvals that determine its ability to continue normal energy operations.
NIS reported earnings before interest, tax, depreciation and amortisation (EBITDA) of RSD 35.1 billion during the first six months of the year. The improvement was supported by financial discipline, cost-control measures, higher crude oil prices and the use of lower-cost inventories accumulated earlier.
Higher Oil Prices Support Financial Recovery
Average Brent crude prices reached $92.60 per barrel in the first half of 2026, compared with $71.70 per barrel during the same period in 2025. The increase supported the valuation of inventories and upstream production, although it also increased the replacement cost of crude processed at the Pančevo refinery.
NIS generated RSD 16.6 billion in operating cash flow during the period, while capital expenditure amounted to RSD 11.8 billion. The company calculated public-revenue liabilities of RSD 101.4 billion, highlighting its role as both an energy supplier and a significant contributor to state revenues. Operationally, the group produced 554,400 tonnes of oil equivalent, processed approximately 1.6 million tonnes of crude oil and semi-finished products, and sold around 1.4 million tonnes of petroleum products.
OFAC Licence Deadline Creates Operational Uncertainty
Despite the improved financial results, NIS operations remain affected by the sanctions framework linked to the company’s ownership structure. The licence issued by the US Office of Foreign Assets Control (OFAC) allowing NIS to import, refine and trade petroleum products was valid until 31 July 2026.
NIS submitted a new application on 27 July 2026, requesting permission to continue operations without interruption after the existing licence deadline. The company’s repeated reliance on short-term extensions has allowed supply activities to continue, but has required suppliers, banks, insurers, transport companies and state institutions to manage operations under temporary regulatory approvals rather than a permanent ownership arrangement.
Fuel Supply Faces Additional Logistics Constraints
The sanctions issue comes as Serbia’s alternative fuel supply routes are facing capacity limitations. Fuel imports reached only 25% of planned July volumes after exceptionally low Danube water levels reduced barge transport capacity. Vessels were operating at only 30–40% of normal cargo capacity, forcing companies to rely more heavily on higher-cost road and rail transportation.
The Pančevo refinery, with annual processing capacity of approximately 4.8 million tonnes, normally supplies around 80% of Serbia’s fuel demand. Serbia maintained approximately 269,000 tonnes of diesel in strategic reserves, although extended reliance on these reserves would quickly reduce available protection during the peak summer consumption period if refinery operations or crude deliveries were disrupted.
Ownership Changes Await Regulatory Approval
The sanctions situation is connected to NIS’s ownership structure. Gazprom Neft holds approximately 44.9% of the company, Gazprom owns around 11.3%, and the Serbian state holds 29.9%. The remaining shares are held by minority shareholders and employees.
Hungary’s MOL reached a provisional agreement to acquire the combined Russian stake, while Serbia has stated that it intends to increase its ownership position by an additional five percentage points. Completion of the transaction remains dependent on OFAC approval and the finalisation of ownership and governance arrangements. The company’s financial results show that NIS remains capable of generating positive cash flow and maintaining refinery activity. However, sanctions-related restrictions can still affect international payments, insurance coverage, shipping arrangements, crude procurement and relationships with commercial counterparties.
Energy Security Impact Extends Across Economy
The risks associated with NIS extend beyond the company itself because refinery continuity affects transport, agriculture, construction, mining, manufacturing and household energy costs. Higher replacement costs for imported diesel could quickly affect broader economic activity, while prolonged use of strategic reserves would reduce Serbia’s ability to respond to future regional supply disruptions. NIS’s RSD 9.8 billion first-half profit provides additional financial capacity, but continued operational stability depends on securing a long-term ownership and regulatory framework that enables the refinery, financial institutions and crude suppliers to operate under permanent conditions.
