A special license that has temporarily delayed the implementation of U.S. sanctions against the Oil Industry of Serbia (NIS) is set to expire in two weeks.

The exit of Russian ownership from the company, a key demand from Washington, remains uncertain.

The only way to prevent U.S. sanctions from applying to NIS is through a change in ownership that would eliminate Russian capital.

The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department imposed sanctions on NIS as a subsidiary of Russia's Gazprom Neft in an effort to undermine Russian military operations in Ukraine.

Sanctions against NIS were enacted on January 10 and were scheduled to take effect on February 27. However, a special license granted by the U.S. Department of the Treasury allowed for a postponement of sanctions until March 27.

Dubravka Đedović Handanović, Serbia's Minister of Mining and Energy, stated that the Serbian side received this information from the U.S. OFAC, which acknowledged the importance of NIS to the Serbian economy and citizens.

Serbian Prime Minister Miloš Vučević welcomed the decision, noting that the license provides an opportunity for the normal functioning of NIS and for seeking a long-term solution regarding U.S. sanctions.

However, a final resolution for NIS, as mentioned by Prime Minister Vučević, currently appears elusive.

There are indications that Washington is not inclined to lift the sanctions, while Moscow does not seem willing to withdraw its ownership of Gazprom Neft and Gazprom from the company.

This creates a stalemate, with uncertainty surrounding what will happen after the March 27 expiration of the license that has effectively suspended the sanctions for one month.

Reports suggest that the Serbian government is aiming to extend the license for at least another 30 days, which experts view as a potential short-term solution allowing NIS to continue operating.

Postponing the sanctions would also serve Russian interests, as it would enable continued profit from the company’s operations.

On February 4, NIS’s management, with support from the governments of Serbia and Hungary, requested a three-month extension on the sanctions’ implementation.

The U.S. Treasury Department's response later that month permitted only a 30-day delay.

There remains uncertainty about whether Washington will agree to renew the license, or if it will decide that sufficient goodwill has been shown and opt to enforce the sanctions.

This decision may be influenced by ongoing U.S.-Russia discussions regarding peace in Ukraine, including conversations about lifting sanctions imposed on Russia.

If the United States opts to activate the sanctions, Serbian officials claim that there are sufficient supplies of petroleum products to last until May. Beyond that, it is questionable whether there would be enough fuel for drivers, as the oil refinery in Pančevo would be compelled to cease operations due to the sanctions.

Experts suggest that an optimal and swift resolution would involve Moscow transferring its ownership stake in NIS to the Serbian government, allowing for later reparations through a deal that would prevent Gazprom Neft and Gazprom from incurring losses.

If OFAC extends the license, it would effectively grant Serbia additional time to address the ongoing issues surrounding NIS.

Nikola Rajaković, a professor at the Faculty of Electrical Engineering in Belgrade and president of the Association of Energy Professionals of Serbia, expressed belief that there is room for the United States to delay the imposition of sanctions against NIS once again.

He noted that ongoing negotiations between Serbia and the U.S. about NIS sanctions could lead to an additional timeframe for finding a sustainable solution, considering that other geopolitical issues might hold greater significance for Washington at this time.

Energy expert Miodrag Kapor remarked that the decision by OFAC to delay sanctions reflects an understanding of Serbia's situation and highlights the importance of NIS for the country’s economy and society.

He indicated that the Serbian government has delegated negotiations to a law firm engaged by Gazprom Neft to safeguard its corporate interests.

Kapor noted skepticism about the U.S. Department of the Treasury granting an additional extension if Moscow does not decide to withdraw from its ownership stake by March 27. He suggested that, should only technical experts be consulted within the Treasury Department, sanctions would likely take effect immediately after the expiration of the current license.

However, he allowed for the possibility of political considerations influencing a potential extension of the license.