U.S. sanctions on Serbia's Russian-owned Petroleum Industry of Serbia (NIS), which runs the country's sole refinery, came into force Thursday after months of delays.
The U.S. sanctioned NIS in January as part of its crackdown on Russian energy, aiming to curb the sector following Moscow's invasion of Ukraine in 2022.
After the deadline for the sanctions to take effect - 6 am on Oct. 9 - the company said it "had not yet been granted an extension of the special license from the United States Department of the Treasury".
"NIS is working to overcome this situation," it said, adding it would work with the U.S. Treasury to try for its removal from the sanctions list.
The company said it has "sufficient crude oil reserves for processing at this time, while petrol stations are fully supplied with all types of petroleum products."
President Aleksandar Vucic warned on Monday the sanctions would have a serious impact and hit the banking sector first.
"There is no bank in the world that would risk violating U.S. sanctions," Vucic said.
NIS confirmed it expects foreign payment cards to "cease functioning," with petrol stations accepting only Serbia's domestic card or cash.
Vucic said talks were under way on the company's future - including possible divestment of Russian shareholders.
With NIS supplying over 80% of Serbia's diesel and petrol, the effects could be widespread, Belgrade-based economist Goran Radosavljevic told AFP.
He warned the sanctions could hit sectors from finance to agriculture and affect Air Serbia's jet fuel supply.
"The financial sector will have to stop working with NIS - halt all transactions and cooperation immediately - to avoid being considered a bank dealing with a sanctioned entity," he said.
A potential solution - a complete exit of the Russian holding from the company - he said was unlikely.
"Russia does not want to sell its shares", Radosavljevic said, adding that although NIS represents "only a small portion of Gazprom's revenue, its political importance is huge."
Despite Western pressure, Serbia has maintained close ties with Moscow and refused to impose sanctions, even as it pursues European Union membership.
It is heavily dependent on Russian gas. A supply contract signed in spring 2022 is expiring, and talks are underway for a new deal.
NIS is 45-percent owned by Gazprom Neft - the oil division of the Russian giant. The Serbian state owns nearly 30% of NIS and the remainder is in the hands of minority shareholders.
