Serbia’s only operational oil refinery, located in Pančevo, has ceased production and shifted to so-called “warm circulation,” N1 TV reported. This mode allows a limited amount of crude to circulate through the system to maintain the facility’s operational integrity, according to sources familiar with the matter.

The stoppage comes as a direct consequence of U.S. sanctions imposed on the refinery’s majority owner, the Russian-controlled “Petrol Industry of Serbia” (NIS). These sanctions, part of Washington’s broader measures targeting Russia’s energy sector following the 2022 invasion of Ukraine, were announced in January but only began taking effect in October. The implementation triggered concern in Belgrade over the potential for a domestic energy shortfall.

Serbia had previously received several deferrals, with the latest issued on November 15, granting a three-month extension aimed at facilitating the sale of the Russian stake in the Pančevo refinery. Russian authorities had indicated willingness to cede control to a third party, paving the way for Serbia to find a buyer.

President Aleksandar Vučić stated on November 20 that three potential candidates were negotiating for the majority Russian stake in NIS, though the finalization of any deal remains uncertain. “I know of three partners with whom they are negotiating. Whether they will complete the deal with someone or not - we will see. I hope they will, because the sooner the better,” Vučić said. Due to the refinery’s shutdown, he is expected to address the nation later today.

Compounding energy sector pressures abroad, Lukoil gas stations in the U.S. are experiencing significant disruptions in processing card payments, Bloomberg reported. Franchisees, especially in New Jersey, have been forced to encourage cash payments due to limitations on accessing funds from credit, debit, and prepaid card transactions within the Lukoil system, a consequence of U.S. sanctions against the Russian parent company.

Operators are also facing sporadic declines of approved transactions, including those made via American Express. Although Lukoil North America warned against using unauthorized payment systems, franchisees are considering temporary or permanent cash-only operations. The timing is particularly problematic as it coincides with the Thanksgiving travel period, a peak season for fuel sales.

Currently, about 85% of sales at Lukoil’s U.S. stations rely on card payments. New Jersey hosts over 110 Lukoil stations, accounting for roughly 60% of the company’s U.S. presence. The ongoing payment issues are expected to persist at least until the temporary license granted to Lukoil expires on December 13, leaving uncertainty for the operational continuity of these franchises.