Serbia, Reluctance of wholesale oil traders to work with companies

, News Serbia Energy

The reluctance of wholesale oil traders to work with majority Russian-owned companies could create problems for the Serbian oil industry when it comes to the procurement of “black gold” from that country, according to domestic experts.

Skepticism on this occasion was first expressed by the President of Serbia, saying that foreign companies that trade oil from Kirkuk in Iraq “started to blackmail the Serbian Oil Industry” because its majority owner is the Russian state company Gazprom.

Namely, after the European Union introduced an embargo on the import of Russian oil that is transported by sea, NIS lost the opportunity to buy “black gold” from that country, which reached the Pancevo Oil Refinery through the Adriatic pipeline. Namely, that embargo foresees a ban on the transport of Russian oil through the territory of the European Union to countries where Russian state companies are the majority owners of oil facilities. In this way, Serbia was left without 15 percent of the “black gold” supplied from the Russian Federation. However, after the information presented by the President of Serbia, Aleksandar Vučić, that some Iraqi oil traders are blackmailing the NIS, the main fear is no longer how to compensate for that amount, but how not to run out of the “black gold” that comes from that country. As a reminder, Serbia imports the most oil from Iraq, 45 percent, 10 percent comes to our country from Kazakhstan, only about one percent comes from Norway, and in Serbia itself, NIS extracts about 23 percent of the “black gold” from domestic deposits.

Experts estimate that the possibility that our country may face insufficient amounts of crude oil is quite real, but also that the uncertainty of what will happen in this matter will last as long as the Russian military intervention in Ukraine lasts. Energy expert Goran Radosavljević points out that some traders are very cautious about buying Russian oil so as not to weaken the sanctions of Western countries against the Russian Federation.

– Some companies that trade in Iraqi oil simply want to secure themselves in the conditions of the embargo. In other words, in order to sell oil to companies like NIS, which are majority owned by Russian capital, they require various additional guarantees that the money obtained from the sale of oil to a company owned by Russian capital will not be used, for example, to buy weapons that Moscow used in the military intervention it is carrying out against Ukraine. Such things can disrupt the regular supply of oil to our country. Given that the quantities that were lost due to the fact that NIS cannot import Russian oil at a given moment are missing, they need to be replaced from another source. In the event of a problem with the supply of Iraqi oil, Serbia would face an additional problem and would not be able to compensate for those quantities, for example by importing from Kazakhstan – explains our interlocutor.

According to him, the danger of complications when it comes to the import of Iraqi oil may arise, but that, at least at this moment, is not a problem that NIS could not solve.

– There are plenty of oil wholesalers, and the fact that a few of them impose various conditions on Russian state-owned oil companies does not mean that the rest are not more flexible. This gives a realistic basis to conclude that NIS can buy the required amount of Iraqi oil through them. However, what should also be noted is that the NIS will face similar or similar problems in the future as well, and that such a situation will be current as long as the war in Ukraine continues.

Economist Milan R. Kovačević also believes that the supply of oil to Serbia may be threatened due to the sanctions imposed by the EU on Moscow.

– There is no doubt that it will also depend on how Serbia behaves in the following period to the request of Western countries to impose sanctions on Russia. What is certain is that the uncertainty of whether there will be enough oil will be constantly present, as well as the fact that traders will use this situation to increase the purchase price of oil to NIS – concludes our interlocutor, Danas writes.