State-owned oil pipeline operator Jadranski Naftovod (JANAF) said on Tuesday that in light of the EU sanctions against Russia following the invasion of Ukraine, it would stop transporting crude oil to Serbia's NIS company from mid-May until such time the sanctions are in place.

JANAF does not operate directly on the Russian market, but Council Regulation (EU) 2022/428 of 15 March 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine also includes the contract for crude oil transport in 2022 which JANAF has concluded with NIS, JANAF reported via the Zagreb Stock Exchange.

JANAF said that it will not be in a position to realise the provisions of that contract as of 15 May 2022 and as long as the restrictive measures imposed by the EU are in force.

Given that it is not currently possible to foresee the potential duration and future intensity of the restrictions, it is not possible to estimate the effects of the restrictions so that they do not jeopardise JANAF’s current financial status and business, the company said.

The company said it is monitoring developments on a daily basis and is in close contact with its clients.

It is also monitoring the measures introduced by the government, EU and competent institutions and is estimating the risk and possibility of the measures being relaxed. JANAF can adapt its business to clients’ demands and alternative scenarios of doing business in the oil transport market, the company said, adding that it does not expect any significant negative deviations in its operation.

In mid-January, JANAF reported that it had concluded a contract with NIS for crude oil transport for the period from 1 January to 31 December 2022.

NIS is majority-owned by Gazprom Neft, which holds 56.15% of shares, while the Serbian government owns 29.87% and small shareholders hold 13.98% of the company’s shares.

In mid-March, the EU agreed on a fourth package of restrictive measures against Russia, including a ban on investment in Russia’s energy sector, a ban on exporting luxury goods, and a ban on importing steel products from Russia.

The sanctions also include a ban on any transactions with key Russian state-owned enterprises across different sectors, including Gazprom Neft.