US sanctions Serbia's main oil supplier, which is controlled by Russia

BELGRADE, Serbia — The United States has introduced sanctions against Serbia’s main oil supplier, which is controlled by Russia, the company said Thursday. Serbia's president said this could have “unforeseeable” consequences for the Balkan country.

Serbia depends almost entirely on Russian gas and oil supplies, which it receives mainly through pipelines in Croatia and other neighboring states. The gas is then distributed by Petroleum Industry of Serbia, or NIS, which is majority-owned by Russia’s state oil monopoly Gazprom Neft.

The sanctions could deprive Serbia of gasoline and heating oil ahead of the winter months.

Populist President Aleksandar Vucic is already under pressure at home from 11 months of anti-government protests. He said the sanctions will have “extremely dire consequences” in many aspects: “This is something that will affect every citizen.”

Vucic said Serbia will continue talks with both American and Russian officials. He said the government is prepared for the situation and urged people not to panic.

“Trust your state. We will go through this together,” he said.

NIS said Thursday it had failed to secure another postponement of the U.S. sanctions, which could jeopardize its efforts to secure oil and gas deliveries in a longer term.

“The special license from the U.S. Department of the Treasury, which enables unhindered operational business, has not yet been extended,” NIS said in a statement. It added that it has stored enough supplies to keep the operation moving for customers for a longer while.

It also said problems could occur at NIS gasoline stations with payments made by foreign bank cards but added that cash payments would be accepted.

The U.S. Treasury’s Office of Foreign Assets Control originally placed sanctions on Russia’s oil sector on Jan. 10 and gave Gazprom Neft a deadline to exit ownership of NIS, which it didn’t do. There was no immediate comment from U.S. officials.

Gazprom Neft also owns Serbia’s only oil refinery.

Analysts say that Serbia is collateral damage in a power game between Russia and the U.S.

“Had the Russians agreed to sell their share, none of these things with sanctions would have happened,” said Aleksandar Milosevic, a Serbian economic analyst.

“But Russians do not want to sell. They are more ready to accept all the financial consequences coming from the sanctions than to actually show weakness and sell NIS,” he said. “So this is a political game between Russia and the United States and Serbia is kind of, basically, an irrelevant player in all that.”

Although formally seeking European Union membership, Serbia has refused to join Western sanctions against Russia over its invasion in Ukraine, in part because of the crucial Russian gas deliveries.

The country's pro-Russian leader is facing one of the biggest threats to more than a decade of his increasingly autocratic rule. Protests have been held by university students and others since the collapse almost a year ago of a concrete canopy at a railway station in the country’s north that killed 16 people.

Many in Serbia believe rampant corruption and nepotism among state officials led to sloppy work on the building reconstruction, which was part of a wider railroad project with Chinese state companies.