(MENAFN) The U.S. has activated sanctions against Serbia’s Russian-majority-owned oil giant, NIS, sparking immediate disruptions as neighboring Croatia halted crude oil deliveries, endangering the operation of Serbia’s sole refinery.

Earlier exemptions granted by Washington to Serbia’s Petroleum Industry of Serbia (NIS)—largely controlled by Russia’s Gazprom and Gazprom Neft—have expired. The latest temporary waiver, issued on October 1, lasted only one week and was not renewed.

On Thursday, NIS confirmed that the U.S. Treasury Department declined to extend the sanction relief, leaving the company fully subject to the restrictions. NIS stated it is “working to overcome the situation” and will seek discussions with U.S. officials to pursue delisting.

The fallout was swift. Croatia’s pipeline operator JANAF, the exclusive supplier of crude to the Pancevo refinery, announced an immediate suspension of all deliveries to NIS. Serbian President Aleksandar Vucic warned that without resumed crude supplies, the refinery—vital for gasoline and jet fuel production—could shut down by November 1.

“These are extremely severe consequences for our entire country. It's not just about the functioning of one company,” Vucic declared in a televised address.

Under the sanctions, NIS is barred from both buying crude oil and exporting refined products. Analysts suggest the company’s only options are a U.S. sanctions reversal or the divestment of its Russian shareholders.

The disruption has already affected consumers, with NIS informing customers that its roughly 350 fuel stations would no longer accept American Express, Mastercard, or Visa payments.

NIS stands as a key energy player in the Balkans, operating an oil refinery in Pancevo near Belgrade and a retail network exceeding 400 filling stations. Gazprom Neft holds the largest share at 44.85%, Gazprom owns 11.3%, while the Serbian government retains 29.87%.

Despite Serbia’s formal EU accession ambitions, it has resisted joining Western sanctions targeting Russia over the Ukraine conflict. Both Brussels and Washington have persistently urged Belgrade to cut its energy ties with Moscow, a historically critical ally.

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