Serbia’s tightrope walk between US sanctions and historic Russian ties

The United States has imposed sanctions on Gazprom Neft, a major shareholder in the Petroleum Industry of Serbia (NIS), the Balkan country’s sole oil and gas company.

These sanctions mandate a complete divestment of Russian ownership from NIS, which is critical to Serbia’s energy security.

Over the past few weeks, Serbia terminated several military agreements with Russia. Serbian military chief General Milan Mojsilovic has acknowledged the challenges his country faces in maintaining and operating Russian military equipment, including MiG-29 fighter jets and T-72 tanks.

These developments suggest that Serbia, and potentially the entire Balkans, could once again emerge as a theatre of conflicting American and Russian interests.

Beyond security and energy policy, ethnic and religious dynamics are other significant factors that could shape this geopolitical contest.

Russia’s energy policy in Balkans

In energy policy, Russia leverages its dual role as a primary energy supplier and a significant investor in the regional energy sector. As the dominant provider of oil and gas, Russia capitalises on the high dependency of most Balkan countries on energy imports.

Its influence is particularly pronounced in Serbia and North Macedonia, where Russia meets nearly 90 percent of the natural gas demand.

In Serbia, Lukoil acquired a 79.5 percent stake in Beopetrol, while Gazprom secured a majority share in the state-owned NIS for approximately €400 million.

Similarly, in Bosnia and Herzegovina, Zarubezhneft obtained critical oil assets, including the Brod Oil Refinery, the Modrica Oil Refinery, and the local retailer Nestro Petrol.

Two key observations emerge from this data. First, Russia has established a near-monopolistic position in the energy sector, leaving countries like Serbia and North Macedonia heavily dependent on its supplies.

Second, Russia’s investments are concentrated in areas with significant Orthodox Christian and Serbian populations. For instance, in Bosnia and Herzegovina, Russian investments are almost exclusively directed toward the self-declared “Republic of Srpska”, while the Federation of Bosnia and Herzegovina, predominantly home to Muslim Bosniaks, remains largely excluded.

This investment pattern exacerbates regional inequalities, fostering disparities in development and prosperity between areas inhabited by Orthodox Serbs and those predominantly home to Bosniaks.

Russia’s security policy in Serbia

The Kremlin’s security policy in the Balkans is deeply rooted in an anti-NATO narrative, which resonates particularly with Orthodox Christian Serbs due to their historical and cultural ties to Russia.

Despite withdrawing its military from the region in 2003, the Kremlin continues to regard the Western Balkans as a strategically significant periphery of Europe. Based on this perception, Russia has pursued a strategy aimed at delegitimising Western influence while safeguarding its own security interests.

This strategy is evident in its military cooperation with Serbia, which signed a defence agreement with Russia in 2016, though it was terminated in the first half of January.

Over the years, this partnership facilitated annual military exercises, parades, and the acquisition of advanced weapon systems. Notably, the “Slavic Brotherhood” exercises, involving troops from Serbia, Russia, and Belarus, exemplify Moscow’s integration of cultural and military ties.

Two key points emerge from these developments. First, Russia’s security policy relies heavily on anti-NATO narratives to maintain its influence in the region.

While Montenegro, North Macedonia, and Albania have joined NATO, Russia is actively working to prevent similar developments in Serbia and Bosnia and Herzegovina.

Second, Russia intertwines cultural and religious themes – such as the “Slavic Brotherhood” narrative – with its security policy to delineate a boundary against Western influence.

This dual approach underscores Moscow’s efforts to reinforce its geopolitical presence while fostering alignment with its Orthodox Christian allies.

Serbia’s balancing act

Subsequent to the US sanctions on NIS and the termination of its military agreement with Russia, Serbia seeks to maintain its delicate policy of balancing between the major powers.

From Serbia’s perspective, Russia remains an indispensable partner, making a complete severance of ties unfeasible. Crucially, Russia is Serbia’s strongest ally in opposing Kosovo’s independence, a cornerstone of Serbian foreign policy.

Serbia has demonstrated its loyalty to Russia by refraining from imposing sanctions during the 2014 annexation of Crimea and implementing only partial sanctions following the onset of the Ukraine war in 2022.

This relationship reflects a “younger brother–older brother” dynamic, where Serbia relies heavily on Russian support, particularly in energy supply. This dependency makes developments surrounding NIS especially significant.

At the same time, Serbia is also a candidate for EU membership and occasionally aligns itself with Western policies. However, Serbia’s enthusiasm for EU integration has waned in recent years.

On one hand, Belgrade perceives itself as neglected by the EU; on the other, the Union’s appeal has diminished due to a series of crises over the past decade, including the refugee crisis, the eurozone crisis, and Brexit.

Serbia as a mediator?

The inauguration of Donald Trump as US president marks the beginning of a new era.

Trump expressed willingness to meet with Russian President Vladimir Putin to discuss a potential resolution to the Ukraine conflict.

Serbian President Aleksandar Vucic saw this as an opportunity to position Serbia as the host for such a meeting, citing the country’s unique suitability due to the popularity of both leaders.

According to Vucic, Trump enjoys more support in Serbia than in any other country outside the US, while Putin remains highly revered among Serbs.

Additionally, Vucic emphasised Serbia’s neutrality, noting that it is not part of military alliances like NATO, further reinforcing its suitability as a venue for fostering dialogue between Trump and Putin.

Against the backdrop of recent developments, Serbia seeks to position itself as a mediator between rival superpowers, aiming to enhance its international prestige.

By establishing a diplomatic channel between the US and Russia, Serbia could strengthen its leverage on the global stage. Such a role might also incentivise the US to refrain from imposing further sanctions, recognising Serbia as a valuable partner for advancing its own strategic interests.

At the same time, Serbia would maintain its loyalty to Russia, staying true to its “older brother” dynamic. However, this narrative only tells part of the story.

Russia’s veto power in the UN Security Council regarding Kosovo’s independence and Serbia’s heavy energy dependence on Moscow make it pragmatically unviable for Serbia to jeopardise its relationship with Russia.

From a realpolitik perspective, distancing itself from Moscow would undermine Serbia’s national interests.

Serbia’s balancing act reflects not only its strategic ambitions but also the constraints imposed by its reliance on competing superpowers.