Serbia’s oil and gas company NIS returned to profitability in the first half of 2026, but stronger financial performance has not removed the broader strategic uncertainty surrounding the company. The group recorded €83.5 million in net profit and approximately €300 million in EBITDA, supported by higher crude oil prices, positive inventory effects and continued cost-control measures.
An average Brent crude price of $92.60 per barrel created a favourable market environment, while NIS continued its investment programme with €101 million in capital expenditure during the first six months of the year. However, the company remained dependent on temporary US operating authorisations due to its ownership structure involving Russian shareholders.
The latest licence extension allows NIS to continue crude procurement, refinery operations and fuel distribution until 28 August. While the approval prevents an immediate disruption, the short validity period remains the company’s main strategic weakness.
Repeated temporary extensions provide short-term operational continuity but do not create the certainty required for long-term business planning. The lack of clarity affects crude supply contracts, financing conditions, insurance arrangements, shipping operations and major investment decisions.
NIS remains a critical component of Serbia’s energy security system. During the first half of 2026, the company processed 1.6 million tonnes of crude oil and intermediate products, while petroleum product sales reached 1.4 million tonnes.
The company operates 384 filling stations, including 327 in Serbia, making the Pančevo refinery a strategically important asset for domestic fuel supply, government revenues and industrial activity. Any prolonged disruption would therefore affect not only NIS but also the wider Serbian economy.
Summer hydrological conditions added another layer of risk. Extremely low Danube water levels reduced river transport capacity to only 30–40% of normal levels, limiting fuel import alternatives at the same time as supply flexibility became increasingly important.
In response, Serbia temporarily released mandatory operational diesel reserves held by oil companies, reduced excise duties by 20% and kept state strategic reserves unchanged. These measures provided additional supply security, but they also highlighted the connection between refinery operations, transport infrastructure and geopolitical risks.
A possible ownership solution could involve Hungary’s MOL Group, although the final outcome will depend on transaction conditions, sanctions approvals, governance arrangements and Serbia’s ability to maintain strategic influence over the company.
NIS has already started reducing its regional exposure by agreeing to sell its Romanian subsidiary and continuing preparations for the potential divestment of its Bulgarian operations. Both transactions remain subject to regulatory approvals and authorisation from the US Office of Foreign Assets Control (OFAC).
The divestments could strengthen NIS’s financial flexibility and simplify its regional structure, but they would also reduce geographic diversification at a time when energy security remains a key concern.
At the same time, Serbia is working to diversify crude supply routes through Hungary. State-owned Transnafta has submitted an environmental assessment for a planned pipeline connecting Horgoš and Novi Sad, which would link Serbia with the Druzhba pipeline system and reduce dependence on the existing JANAF route through Croatia.
The planned construction and supervision contracts have been estimated at approximately €131 million excluding VAT. The project would improve logistical flexibility and create an additional supply route, although it would not automatically remove exposure to Russian-origin crude if the connected infrastructure remains influenced by geopolitical and sanctions-related risks.
Despite the uncertainty surrounding its strategic position, NIS continues smaller operational investments. Two gas-fired power plants at Banatsko Miloševo and Srpska Crnja entered trial operation following a €17 million investment.
With combined capacity of 5 MW, the facilities are expected to generate approximately 40.5 GWh annually by using previously underutilised field gas resources. These projects improve operational efficiency and resource utilisation, but they cannot address the larger uncertainty surrounding refinery continuity and ownership.
The main challenge for NIS has therefore shifted from short-term profitability to long-term risk allocation. Serbia needs continued refinery operations, reliable crude supply routes and secure fuel reserves, while any future shareholder will require stable governance, sanctions protection and predictable access to international markets.
A sustainable solution will need to address multiple elements simultaneously, including ownership structure, corporate control, supply agreements, banking access, insurance coverage and emergency fuel-stock mechanisms.
The operating licence itself is not the root cause of the problem. It is only the mechanism through which a wider ownership and geopolitical issue is affecting one of Serbia’s most strategically important energy companies.
