Serbia’s oil and gas company NIS returned to profitability in the first half of 2026, with €83.5 million in net profit and approximately €300 million in EBITDA. Results were supported by higher crude oil prices, positive inventory effects and continued cost-control measures. An average Brent crude price of $92.60 per barrel contributed to a favourable market environment.
NIS reported €101 million in capital expenditure during the first six months of 2026 as it continued its investment programme. Despite the improved financial performance, the company remained exposed to strategic uncertainty linked to its ownership structure. NIS also continued to rely on temporary US operating authorisations due to Russian shareholders.
Licence extension through 28 August and implications for planning
The latest licence extension allows NIS to continue crude procurement, refinery operations and fuel distribution until 28 August. The approval prevents an immediate disruption to operations, but the short validity period remains a key strategic weakness. Repeated temporary extensions have provided continuity without delivering certainty for long-term business planning.
The lack of clarity affects crude supply contracts, financing conditions, insurance arrangements, shipping operations and major investment decisions. While operational continuity is maintained under the extension, the time-limited authorisation framework constrains planning horizons for commercial and capital commitments.
Refining throughput and fuel sales amid supply constraints
NIS processed 1.6 million tonnes of crude oil and intermediate products in the first half of 2026. Petroleum product sales reached 1.4 million tonnes over the same period. The company operates 384 filling stations, including 327 in Serbia, with the Pančevo refinery supporting domestic fuel supply, government revenues and industrial activity.
A prolonged disruption at Pančevo would therefore affect not only NIS but also broader economic activity in Serbia. Summer hydrological conditions added additional risk through extremely low Danube water levels, which reduced river transport capacity to 30–40% of normal levels.
Diesel reserve release and tax changes during low-water period
With river transport constrained, fuel import alternatives were limited at a time when supply flexibility became increasingly important. Serbia temporarily released mandatory operational diesel reserves held by oil companies in response to the situation. The government also reduced excise duties by 20%, while keeping state strategic reserves unchanged.
These measures provided additional supply security while underscoring links between refinery operations, transport infrastructure and geopolitical risks. The operational context also highlighted how logistics constraints can coincide with authorisation-related uncertainty for refinery continuity.
Ownership options and regional restructuring plans
A potential ownership solution could involve Hungary’s MOL Group, although any outcome depends on transaction conditions, sanctions approvals, governance arrangements and Serbia’s ability to maintain strategic influence over NIS. NIS has already begun reducing regional exposure by agreeing to sell its Romanian subsidiary. It is also continuing preparations for potential divestment of its Bulgarian operations.
The Romanian sale and Bulgarian divestment plans remain subject to regulatory approvals and authorisation from the US Office of Foreign Assets Control (OFAC). Divestments could strengthen financial flexibility and simplify the regional structure, while also reducing geographic diversification amid ongoing energy security concerns.
Crude route diversification via Hungary pipeline proposal
Serbia is working to diversify crude supply routes through Hungary as part of its broader logistics approach. State-owned Transnafta submitted an environmental assessment for a planned pipeline connecting Horgoš and Novi Sad. The project would link Serbia with the Druzhba pipeline system and reduce dependence on the existing JANAF route through Croatia.
The planned construction and supervision contracts are estimated at approximately €131 million, excluding VAT. The pipeline would improve logistical flexibility and create an additional supply route, though it would not automatically remove exposure to Russian-origin crude if connected infrastructure remains influenced by geopolitical and sanctions-related risks.
Gas power trial operations at Banatsko Miloševo and Srpska Crnja
NIS continues smaller operational investments despite uncertainty around its strategic position. Two gas-fired power plants at Banatsko Miloševo and Srpska Crnja entered trial operation following a €17 million investment . Combined capacity is 5 MW, with expected annual generation of approximately 40.5 GWh.
The plants are expected to use previously underutilised field gas resources . While these projects support operational efficiency and resource utilisation, they do not address larger uncertainty related to refinery continuity and ownership structure.
Risk allocation shift from near-term results to long-term conditions
NIS’s main challenge has shifted from short-term profitability toward long-term risk allocation. Serbia requires continued refinery operations, reliable crude supply routes and secure fuel reserves as licence validity periods remain time-limited. Any future shareholder would require stable governance, sanctions protection and predictable access to international markets.
A sustainable solution would 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 described as not being the root cause; it functions as a mechanism through which wider ownership and geopolitical issues affect one of Serbia’s strategically important energy companies.
