Croatia Aids Serbia Bid to Avert US Sanctions on Gazprom Unit

Croatia’s premier said European Union leaders will seek a solution to help Serbia steer clear of sanctions targeting a key oil refiner controlled by Russia’s Gazprom. 

Prime Minister Andrej Plenkovic addressed potential US and UK measures to target Serbia’s sole refiner, Naftna Industrija Srbije. Croatia’s state-controlled oil pipeline operator, Janaf, generates about third of its revenue from NIS, its biggest client. 

Serbian President Aleksandar Vucic last week said NIS is under sanctions threat, warning that such a measure could cripple Serbia’s fuel market and have serious consequences for the Serbian economy. On Thursday, he got a nod from the Balkan neighbor with whom Serbia once waged war. 

“There is an intention to solve the problem on the EU level,” Plenkovic told reporters in Brussels as European Union leaders met at a summit. He said adjustments to NIS’s ownership structure could address the issue and preserve the existing contract between Janaf and NIS. 

Janaf is contracted by NIS to transport 10 million tons of crude over three years until 2026. Gazprom Neft reduced its majority stake in NIS to 50 percent in 2022 in response to sanctions prompted by Russia’s invasion of Ukraine. An additional 6.15 percent stake is held by Gazprom, while Serbia owns just under 30 percent. 

Vladislav Veselica, a management board member at Janaf, said he expects a “global solution” to resolve the sanctions threat. 

“I believe that the Croatian government will find a way to avoid the damage,” Veselica said in a phone interview Thursday. 

Under Vucic, Serbia — a candidate for EU membership — has sought to balance its ties with Western powers, Russia and China. The government in Belgrade has condemned the Kremlin’s war on Ukraine, but stopped short of adopting Western sanctions.

Serbia also relies heavily on Gazprom gas supplies, even after efforts to diversify away from Russian supplies. It’s in talks with Moscow to extend a supply contract that expires in March.

Vucic, who attended an EU summit with leaders from the western Balkans, on Thursday discussed the matter with James O’Brien, US assistant state secretary for European and Eurasian affairs.