Serbia pressured as US demands Russian exit from oil giant
The Serbian Oil Industry Corporation (NIS) has come under pressure from the USA, which demands the withdrawal of Russian capital from the company. The President of Serbia, Aleksandar Vučić, speaks of "the toughest sanctions" from the United States. He announced plans to discuss this issue with Vladimir Putin.
NIS is the largest oil company in Serbia. It is also the only company involved in the exploration, production, and processing of crude oil and natural gas. Since 2008, the majority shareholders of the company have been the Russian enterprises Gazprom and its oil division, Gazprom Neft. As a result, the corporation has been impacted by a new package of sanctions targeting Russia's lucrative industry.
- They demand that we completely withdraw Russian capital from NIS AD NOVI SAD. We will wait for further clarifications. They do not allow the retention of a 49% share or any smaller percentage of Russian capital. They demand a complete withdrawal of Russian capital from NIS - said President Aleksandar Vučić, regarding American restrictions imposed on the Russian oil industry.
The Serbian leader emphasised that "Serbia is not an enemy country to Russia and does not want a hostile takeover of enterprises." He added that he plans to have a phone conversation with Russian President Vladimir Putin on this matter.
Furthermore, President Vučić assessed the sanctions imposed on NIS on Friday as "the toughest sanctions against a Serbian company." He assured that "citizens have no reason to worry, there will be no deficit, and there will be no economic catastrophe."
A blow to Russia's oil industry
American restrictions aim to prevent the purchase of Russian oil and gas from the largest Russian companies using dollars. Entities affected by the sanctions include Gazprom Neft and Surgutneftegaz. Additionally, 183 ships that are part of the "shadow fleet" involved in exporting Russian oil were added to the list, along with financial and insurance institutions involved in handling oil and gas transactions.
According to data from the Central Securities Depository, Russian Gazprom Neft holds 50% of the shares in NIS, the Republic of Serbia - 29.87%, and Gazprom - 6.15%. The remainder belongs to citizens, employees, former employees, and other minority shareholders.
- The United States is taking sweeping action against Russia's key source of revenue for funding its brutal and illegal war against Ukraine - said Janet Yellen, the US Treasury Secretary. - With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports - she added.
Effects of the sanctions
Washington explained that similar sanctions had not been introduced earlier due to concerns that oil prices would significantly rise, which would benefit Russia. However, the situation is now different. The supply of oil is greater, and Russia's competitors are able to fill potential market gaps.
The restrictions are intended to further weaken the Russian economy. A weak rouble, which is at its lowest exchange rate since the collapse right after the start of the invasion of Ukraine, is expected to aid this.
Americans claim that sanctions, combined with the condition of the Russian currency, will cause inflation in Russia to rise, which is already officially approaching 10%. This, in turn, may force the central bank to further raise interest rates, which are already at a record high of 21% and could threaten the financial stability of Russian corporations, many of which are already struggling.
The restrictions will be felt not only by Russians, as outgoing US President Joe Biden does not conceal. - It is probable that gas prices [in the United States] could increase as much as three or four cents a gallon. The sanctions are imposed today because they will have a profound effect on the growth of the Russian economy and make it more difficult for Putin to conduct his wars - admitted the Democrat.
