Serbia resists US pressure to oust Russian stakes in oil giant
The Serbian Oil Industry Corporation (NIS) is currently facing pressure from the United States, which is demanding the withdrawal of Russian capital from the company. Serbian President Aleksandar Vučić mentioned "the toughest sanctions" from the U.S. and announced plans to discuss the matter with Vladimir Putin.
NIS is the largest oil company in Serbia and the only one involved in exploring, producing, and processing crude oil and natural gas. Since 2008, the majority shareholders have been the Russian enterprises Gazprom and its oil arm, Gazprom Neft. As a result, the corporation is affected by a new package of sanctions targeting Russia's lucrative industries.
They demand that we completely withdraw Russian capital from NIS AD NOVI SAD. We will wait for further clarifications. They do not allow the retention of a 49% share or any smaller percentage of Russian capital. They demand a complete withdrawal of Russian capital from NIS, stated Serbian President Aleksandar Vučić, referring to the American restrictions on the Russian oil industry.
The Serbian leader emphasized that "Serbia is not an enemy country to Russia and does not want a hostile takeover of enterprises." He also mentioned plans for a phone conversation with Russian President Vladimir Putin regarding this issue.
President Vučić assessed the sanctions imposed on NIS as "the toughest sanctions against a Serbian company." However, he reassured that "citizens have no reason to worry, there will be no deficit, and there will be no economic catastrophe."
A blow to Russia's oil industry
American restrictions aim to prevent Russian oil and gas purchases from the largest Russian companies using dollars. Gazprom Neft and Surgutneftegaz are among the entities affected. Additionally, 183 ships, part of the "shadow fleet" involved in exporting Russian oil, have been added to the list, along with financial and insurance institutions involved in handling oil and gas transactions.
According to data from the Central Securities Depository, Russian Gazprom Neft holds 50% of the shares in NIS, the Republic of Serbia holds 29.87%, and Gazprom holds 6.15%. The remainder belongs to citizens, employees, former employees, and other minority shareholders.
The United States is taking sweeping action against Russia's key source of revenue for funding its brutal and illegal war against Ukraine, stated Janet Yellen, the U.S. Treasury Secretary. With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports, she added.
Effects of the sanctions
Washington explained that similar sanctions had not been imposed earlier due to fears that oil prices might significantly rise, which would benefit Russia. However, the situation has changed. The supply of oil is greater, and Russia's competitors are able to fill potential market gaps.
The restrictions are intended to further weaken the Russian economy. A weak ruble, at its lowest exchange rate since the collapse right after the start of the invasion of Ukraine, is expected to contribute to this goal.
Americans claim that the sanctions, combined with the state of the Russian currency, will cause inflation in Russia to rise, which is already officially approaching 10%. This may force the central bank to further raise interest rates, already at a record high of 21%, potentially threatening the financial situation of Russian corporations, many of which are already facing challenges.
It is probable that gas prices [in the United States] could increase as much as three or four cents a gallon. The sanctions are imposed today because they will have a profound effect on the growth of the Russian economy and make it more difficult for Putin to conduct his wars, admitted the Democrat.
