Serbia faces deadline for oil deal

Serbia’s government has until December 11 to resolve a critical issue involving its oil sector. The US sanctions waiver for NIS Group, the operator of the country's only refinery, expires on that date. NIS is majority-owned by Gazprom, the Russian energy giant. If the waiver is not extended, production could halt immediately. Vuk Vuksanovic, a foreign policy lecturer at King’s College London, described a potential lapse as a complete economic shock for the incoming administration.

The new parliamentary majority, led by the Student List, inherited these obligations after winning a landslide election last month. The party has not yet named a prime minister candidate. Under the previous leadership of Aleksandar Vucic, Russia supplied roughly 90 percent of Serbia's gas at low rates. The current three-month supply contract ends at the close of this year. Vucic claimed on social media that the latest price was 318 euros per 1,000 cubic liters, well below the market rate of approximately 900 euros.

Hungarian Foreign Minister Anita Orban told local media on November 5 that a deal to transfer Gazprom's stake to the Hungarian firm MOL could be finalized by the December deadline. However, analysts suggest Washington will pressure for a swift resolution. Nikola Xaviereff of the German Council on Foreign Relations noted that the recent US midterm elections signal a stronger push to conclude the transaction. He warned that further extensions are unlikely.

China presents a separate set of challenges for the new leadership. Chinese firms built the Novi Sad railway station, where a roof collapse sparked the protests that elected the Student List. Ilija Srdanovic, the Student List's lead candidate, said officials still lack clarity on what was signed and whose interests were served. Chinese companies also handle the Belgrade subway and the Expo 2027 complex, which is scheduled to open in May. Vuksanovic questioned whether the Expo can be finished on time and to satisfaction.

Despite the scrutiny, experts expect Chinese involvement to continue. Bartosz Kowalski, an associate professor at Lodz University, stated that the change will not be dramatic due to China's deep integration into Serbia's economy. China has invested nearly 8 billion dollars in Serbia since 2010, making it the second-largest investor behind the European Union. The Student List aims to keep these ties but demands transparency and open tendering processes.

Serbia also relies on the EU, its largest trading partner. Access to the EU's Growth Plan, which offers 6 billion euros to Balkan candidates between 2023 and 2027, is currently constrained. A European Commission report released on November 4 showed that only 167.6 million euros had been released to Serbia so far. Payments were frozen earlier this year after Brussels cited judicial reforms as a sign of democratic backsliding. The new government must navigate these financial hurdles while maintaining its stance against recognizing Kosovo as an independent state.