Serbia Faces Challenging Oil Supply Amid Low Danube Levels; Domestic Refinery Production Key

Serbia's energy sector is navigating a "very challenging" situation regarding the supply of oil derivatives, primarily due to critically low water levels on the Danube River, which hampers imports. Minister of Mining and Energy Dubravka Đedović Handanović met with representatives from the Serbian Oil Companies Association (UNKS) and Naftna Industrija Srbije (NIS) to address the difficulties.

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From NIS, we have announcements that in the second half of the month, when already ordered shipments of crude oil can arrive, they will be able to increase processing from the current approximately 9,500 tons of crude oil per day to about 13,000 tons per day.

To ensure stable domestic supply, NIS will increase its refining capacity. The company expects to boost its daily crude oil processing from approximately 9,500 tons to 13,000 tons once newly ordered crude shipments arrive in the latter half of the month. Additionally, NIS will make about 23,000 tons of its operational reserves available to other oil companies facing higher demand from the domestic refinery.

These measures are crucial as Serbia anticipates a demand of around 200,000 tons of oil derivatives in August. While planned diesel imports remain similar to July, approximately 20,000 tons are expected via water transport, a route now uncertain due to the low Danube levels. Utilizing NIS's production and reserves will help meet market needs even if the poor hydrological situation persists, preserving state reserves for emergencies.

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As one of the measures, we will enable NIS to make about 23,000 tons of its operational reserves available to other oil companies that currently have higher demand from the domestic refinery, which will enable us to meet the huge demand we expect in August of about 200,000 tons of oil derivatives.

Furthermore, Serbia has extended the ban on exporting oil and oil derivatives, including Euro diesel, until the end of August to keep all available quantities for the domestic market. Previous releases of Euro diesel from operational reserves have already helped stabilize the market and bridge import difficulties.

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The water level of the Danube is at a record low, and in such extraordinary circumstances, the refinery's operation is crucial, as poor hydrology will persist, and all oil companies in Serbia are supplied primarily from the domestic refinery.