Between the hammer and the anvil: What awaits us if the Americans do not extend NIS’s license after August 28?

The energy crisis due to the war in the Middle East and the blockade of the Strait of Hormuz, combined with the drop in water levels on the Danube and other European navigable rivers and our specific problem, sanctions on NIS, could create serious problems in the supply of fuel, primarily diesel.

Due to the low water level of the Danube, the transport of fuel by barges is not possible, so oil companies rely exclusively on deliveries from NIS.

Srdjan Knezevic, the owner of Knez Petrol, points out that his company accounts for about 30% of NIS’s turnover and that there are no problems with fuel quantities.

– We are delivering fuel without any disruptions, there are no problems with supply. The only thing we need is more money. Now one tank of diesel costs 6.5 million dinars, and it used to cost three to four million. We are also regularly supplying the economy, we are giving 45 days of deferred payment, but more money is needed for that now – explains Knezevic.

He points out that imports are currently not possible due to low water levels, and trains cannot transport enough fuel for our needs.

NIS announced today that starting today, the crude oil processing capacity at the Pancevo Oil Refinery will be increased to around 13,000 tons per day.

The market’s dependence on NIS all the more emphasizes the problems we could find ourselves in after August 28. Namely, that is the date when the operating license that the American OFAC gave to NIS, as well as the JANAF oil pipeline, for the delivery of oil to the Pancevo Refinery expires.

Knezevic points out that if NIS stops, or if the license is not extended, major problems will arise.

– If NIS could not import oil, there would be a collapse. The state should get involved with commodity reserves – Knezevic assesses.

Tomislav Micovic, Secretary General of the Association of Oil Companies of Serbia, stated on RTS yesterday that the cost of imported diesel is at the level of the retail price and that it is absolutely not worth importing it.

– The operating license for the continuation of NIS's work expires on August 28, and we have directed all supplies to NIS. In these circumstances, we need to create the possibility of making imports worthwhile as soon as possible – he warned.

NIS a.d. Novi Sad

Knez Petrol d.o.o. Zemun

Udruženje naftnih kompanija Srbije Beograd

Naftna industrija Srbije

NIS

Knez petrol

Janaf

Ofac

Association of Oil Companies of Serbia

Vorteks

Srđan Knežević

Tomislav Mićović

blockade of the Strait of Hormuz

import of fuel

ARA hub

Amsterdam Rotterdam Antwerp hub