Russian-Owned, US-Sanctioned NIS Restarts Serbia Refinery

Hungarian energy company MOL is nearing a deal to acquire a majority stake in Serbia's Russian-owned NIS, according to Hungarian Foreign Minister Peter Szijjarto. This deal is expected to be finalized in the coming days, marking a key step in the restructuring of NIS following U.S. sanctions. The transaction is part of broader efforts to transfer ownership from Russian stakeholders to foreign investors by a March deadline.

The U.S. imposed sanctions on NIS in October 2025, forcing its Russian shareholders to divest. MOL, a regional energy player, is in negotiations to buy the majority stake, which currently amounts to 56.15% of the company. The deal is expected to be submitted to the U.S. for approval, a critical step in lifting sanctions and resuming normal operations.

Serbian Energy Minister Dubravka Djedovic Handanovic confirmed that talks are expected to conclude this week, with a binding agreement on the ownership transfer likely to be signed soon. Once finalized, the deal will be submitted for U.S. approval, which is essential for removing sanctions and allowing NIS to continue functioning.

Why Did This Happen?

The U.S. sanctions were imposed as part of broader measures targeting Russian energy assets due to Moscow's involvement in the war in Ukraine. NIS, a key energy firm in the region, became a target as it is majority-owned by Russian entities. The sanctions forced the company to halt operations in October, causing fuel shortages in Serbia. A temporary reprieve allowed NIS to resume crude oil imports in late December, but a permanent solution required a change in ownership.

MOL has positioned itself as the likely acquirer of the Russian stake, with Hungarian authorities supporting the move. Foreign Minister Szijjarto emphasized the strategic importance of the Pancevo refinery to MOL's regional ambitions and the broader energy security of Central Europe. The deal is seen as a way to stabilize the Serbian fuel market while aligning with U.S. and EU policies on Russian energy investments.

How Did Markets React?

MOL's shares have shown positive movement in recent months, rising nearly 9% year-to-date on speculation about the NIS acquisition. The company has demonstrated the ability to raise capital quickly, with analysts estimating MOL could secure EUR 3–4 billion to fund the deal. The anticipated acquisition is expected to expand MOL's footprint in the Balkans and enhance its position in the Central European energy market.

Serbian authorities have also emphasized the importance of keeping the Pancevo refinery operational. The facility is critical to the country's fuel supply, with 47% of petroleum derivatives sold through NIS stations. A prolonged shutdown could cause significant economic disruption, including fuel shortages and increased prices for consumers.

What Are Analysts Watching Next?

Analysts are closely monitoring whether the U.S. will approve the deal and whether MOL will secure the full 56.15% stake. The transaction must also pass Serbian regulatory review, as the government holds a 29.9% stake in NIS and has expressed interest in increasing its ownership.

The Serbian government has requested a 45–60 day extension for NIS to continue operations under temporary sanctions relief. If the deal is not finalized by this time, the government may step in to manage the company or offer it for sale at a predetermined price. This contingency underscores the urgency of the negotiations and the potential political implications.

MOL's ability to execute the acquisition at a reasonable price is also under scrutiny. Erste Bank analysts estimate the 56.15% stake is worth approximately EUR 1.4 billion. However, it is unclear whether the Russian stakeholders will accept this valuation or demand a higher price. Any delay or complication in the transaction could prolong NIS's operating difficulties.

The fuel market in Serbia is currently stable, with state reserves sufficient to meet needs until the end of January. However, prolonged uncertainty could lead to volatility in fuel prices and supply disruptions. Analysts are watching for any signs of market stress as the deadline for sanctions compliance approaches.

The outcome of the MOL-NIS deal will have broader implications for regional energy dynamics. If successful, the acquisition could serve as a model for other European countries seeking to reduce reliance on Russian energy assets while maintaining energy security. The transaction will also test MOL's ability to integrate new assets and manage complex regulatory environments in the Balkans.

The U.S. approval process remains the key unknown. U.S. authorities have not indicated whether they will allow the funds to be transferred to Gazprom Neft's account, raising concerns about potential delays. If the transaction is blocked or delayed, NIS may face another operational disruption, which could have significant economic consequences for Serbia.