(MENAFN) Serbian President Aleksandar Vucic announced on Tuesday that the country’s largest oil refinery, operated by Russia’s Gazprom Neft through the Petroleum Industry of Serbia (NIS), will shut down after failing to obtain the US license required to continue operations under sanctions.

Speaking after a meeting with officials overseeing energy stability and security, Vucic confirmed that the refinery, which had received several temporary extensions since being sanctioned on January 10, will cease operations.

“I am disappointed. We have decided that the refinery will end its operations, but we also agreed that salaries and similar payments will be settled by the weekend. The refinery will determine the timing of the shutdown,” he said.

Vucic added that current reserves would sustain the refinery’s needs until the end of the year. He also noted that Serbia hopes to finalize a new gas agreement with Russia by the weekend; if that does not happen, alternative negotiations would commence on Monday.

The sanctions, announced by the US Treasury Department in January, targeted Gazprom Neft, Surgutneftegas, and their subsidiaries—including NIS—as part of measures aimed at reducing Russia’s energy revenues in line with G7 commitments. Serbia had requested multiple delays to comply with the changes required under US regulations, receiving nearly a year of postponements before the current deadline.

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