The International Institute for Middle East and Balkan Studies (IFIMES[1]), based in Ljubljana, Slovenia, regularly monitors and analyses key developments in the Middle East, the Balkans and the wider international context. Its latest study, “Serbia 2025: Geopolitical resilience, energy security and sanction management”, places particular focus on the current situation in the Republic of Serbia, notably in relation to the introduction of additional restrictive measures targeting the Oil Industry of Serbia (NIS). The IFIMES research highlights the principal factors shaping Serbia’s political, economic and geopolitical environment – ranging from the direct impact of the sanctions and broader regional and global dynamics to the country’s internal institutional and political challenges. The analysis offers a clear insight into how Serbia is responding to changing international circumstances, redefining its energy strategy and strengthening institutional resilience to preserve stability and security amid an increasingly turbulent global environment.
The decision by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) to introduce additional restrictive measures[2] against the Oil Industry of Serbia (NIS), a company with majority Russian ownership, represents one of the most sensitive challenges for Serbia’s energy, economic and foreign policy position in 2025. These sanctions cannot be viewed as a mere technical matter confined to the energy sector; they constitute a profoundly geopolitical instrument that directly affects Serbia’s relations with the European Union, Russia, regional energy markets, as well as the dynamics of its future transition towards green energy sources.
Although the negative economic effects of the sanctions could be significant – particularly in the areas of refinery operations, supply stability and the investment cycle – previous experience indicates that Serbia has been able to successfully absorb such pressures by diversifying supply routes, securing stable gas and oil contracts and increasing the share of renewable energy sources within its energy mix.
During 2024–2025, the Government of the Republic of Serbia introduced a set of mechanisms designed to maintain supply continuity and safeguard the domestic energy market. The key measures include: expanding the capacity of energy interconnections with Bulgaria and North Macedonia, increasing investment in storage capacity, intensifying cooperation with Hungary, Azerbaijan and the United Arab Emirates, as well as strengthening national capacities through the development of new renewable energy projects.
The estimates of the economic effects of the sanctions suggest a potential decline in NIS revenues and the resulting pressure on the budget, mild fluctuations in the oil and petroleum products market, a slowdown in the investment cycle and infrastructure development, yet a relatively limited impact on the country’s overall GDP and fiscal stability.
The International Institute IFIMES assesses that the sanctions imposed on NIS have not led to any destabilisation of Serbia’s energy system. On the contrary – and paradoxically – these measures have acted as a catalyst for accelerated diversification and the strengthening of energy autonomy. This demonstrated ability to adapt underscores the high degree of institutional resilience and the long-term strategic stability of the Republic of Serbia.
Between 2024 and 2025, Serbia demonstrated remarkable resilience across several key dimensions: ● Geopolitical resilience – amid considerable pressures, Serbia preserved its policy of military neutrality, maintained stable relations with the EU, the United States, Russia and China, and consolidated its position as an independent and reliable regional actor. ● Economic resilience – despite geopolitical tensions, the impact of sanctions and domestic political challenges, Serbia posted stable GDP growth, reached a record-low public debt-to-GDP ratio and retained a high investment credit rating. ● Institutional resilience – notwithstanding an evident crisis of confidence in institutions, Serbia withstood the pressures of protest movements and attempts at destabilisation outside the constitutional framework. ● Security resilience – in the face of attempts to paralyse the system, the security sector remained fully functional, preventing broader societal disruption.
Serbia’s overall resilience is not a matter of chance, but the outcome of systematic, planned and strategic action aimed at preserving institutional stability, economic sustainability and the state’s strategic autonomy. Despite a shifting and demanding international environment, Serbia succeeded during this period in strengthening its position and reaffirming its status as one of the most stable actors in the Western Balkans.
The International Institute IFIMES assesses that the sanctions imposed on the Oil Industry of Serbia (NIS) should not be viewed solely as a threat, but primarily as a powerful catalyst for a profound strategic transformation. Serbia is entering one of the most significant phases of its energy history: by 2030 it must simultaneously reduce its dependence on Russian energy sources, safeguard price stability and maintain geopolitical balance in the region.
The new strategic energy framework encompasses several key directions of action:
● Strengthening the economic model of NIS by increasing the participation of the Serbian state and involving new domestic, regional and European partners; ● Modernising the Pančevo oil refinery to increase competitiveness, technological sophistication and productivity; ● Deeper integration into regional energy markets to ensure greater flexibility and reliability of supply; ● Accelerated development of gas interconnections and diversification of gas sources, a vital component of energy security; ● Investments in energy efficiency, renewable energy sources and advanced energy-storage technologies, thereby laying the groundwork for a sustainable long-term transition.
In this way, the energy transformation becomes not only an economic and developmental priority but also a central pillar of national security. Through this process, Serbia reinforces its strategic position and resilience in an increasingly complex regional and international landscape.
During 2024–2025, the Republic of Serbia faced a series of multilayered attempts at destabilisation – ranging from political pressures manifested through protests and performative public actions to intensified media campaigns originating from certain regional centres, as well as coordinated lobbying efforts aimed at weakening Serbia’s negotiating position towards the EU and in the dialogue with Kosovo. Particularly notable was the bid to undermine confidence in key state institutions and executive branch officials.
Attacks targeting the President of Serbia, Aleksandar Vučić (SNS) – including his ongoing demonisation within parts of the domestic and regional media sphere – reflect a wider political engineering strategy aimed at weakening internal stability. Despite such pressures, Serbia prevented the escalation of a political crisis and continued to function without major disruptions to the state apparatus.
The International Monetary Fund (IMF)[3] confirms that Serbia’s macroeconomic policy remains “resilient” despite global turbulence. According to the latest projections, real GDP growth will amount to around 3% in 2025, rise to approximately 4% in 2026 and reach roughly 4.5% in 2027.
Fiscal policy[4] also remains stable: the budget deficit in the period 2025–2027 will remain below 3% of GDP, with strict control of public debt. The World Bank[5] (WB) anticipates that regional growth will moderately accelerate to around 3.5% in 2026, creating the conditions for Serbia – with continued reforms and a strong investment cycle – to outperform the regional average at around 4%.
According to the International Institute IFIMES, the key factors that have allowed Serbia to preserve state stability include: steady public support for institutions; clear and consistent communication from the state leadership; effective and coordinated action by the security and intelligence services; favourable international positioning; and robust economic and fiscal discipline.
This combination of internal capacities and strategic governance has enabled Serbia to maintain political stability, institutional functionality and overall resilience in the face of complex regional and global challenges.
Serbia consistently pursues a policy based on the concept of the “four pillars”, simultaneously developing and maintaining political, economic and security relations with the EU, the United States, Russia and China. Although the European perspective remains a clearly articulated strategic commitment, the EU’s uneven, slow and at times unpredictable approach towards the Western Balkans hampers the full consolidation of reform processes in the country.
At the same time, the United States increasingly recognises Serbia’s key role in safeguarding regional stability and the security architecture. China is intensifying its investment footprint through infrastructure and economic projects, while Russia remains an important energy partner, although its scope of action is constrained by global sanctions and the EU’s new energy independence regulations.
This balancing policy does not signal ambiguity or indecisiveness, but rather a strategically guided effort to preserve state autonomy, flexibility and room for manoeuvre in an increasingly polarised international environment marked by global crises and geopolitical turbulence.
Serbia remains a key anchor of stability in the Western Balkans, actively participating in the EU-facilitated dialogue with Pristina, in regional initiatives and in infrastructure projects of regional significance, while maintaining stable relations with Bosnia and Herzegovina, Montenegro and North Macedonia.
The restrictive measures imposed on NIS have not diminished Serbia’s ability to retain its leading role in energy and transport connectivity projects, reaffirming its strategic and constructive position in the region.
Serbia approaches 2026 confronted with a set of complex yet clearly defined political, economic and international challenges, underpinned by significant institutional and state resilience evidenced in previous crises. In spite of pronounced external pressures, the sanctions targeting NIS, attempts at destabilisation and domestic political tensions, the country has preserved economic growth, fiscal stability and international credibility, demonstrating its high level of resilience.
The restrictive measures imposed on NIS, representing one of the most demanding tests of energy and economic security in the past decade, have shown Serbia’s capacity to diversify energy flows, strengthen strategic reserves and redefine its energy policy without jeopardising economic stability. The sanctions did not trigger a market collapse, social unrest or political paralysis; on the contrary, Serbia preserved its energy sovereignty, modernised its infrastructure and remained committed to a balanced foreign-policy approach between East and West.
The beginning of 2026 marks a new phase of political consolidation. The announced early elections will serve as a pivotal moment for institutionalising political stability and laying the foundations for long-term development grounded in the principles of democracy, predictability and accountability. For the institutions, this will be a test of professionalism and independence, while political actors face the challenge of demonstrating maturity and readiness for constructive dialogue.
At the same time, 2026 brings a new geopolitical dynamic: the continued redefinition of the EU’s enlargement policy, the intensification of regional connectivity through strategic initiatives, and the final preparations for EXPO — a project of central importance for Serbia’s international visibility and image. The year ahead also confronts the EU with a fundamental question: does it intend to integrate the Western Balkans or leave the region in a geopolitical “grey zone”?
Serbia enters 2026 with clear messages: political stability is within reach, its economic and energy resilience is unequivocal, its regional position has been consolidated, and the European path remains a strategic choice — pursued with a firm insistence on equality, partnership and objectivity.
If, over the course of the year, institutions are further strengthened, the policy of accountability is sustained, dialogue mechanisms are developed and relations with international partners are approached more rationally, Serbia has the potential to make 2026 a true turning point — affirming itself as a stable, resilient, predictable and reliable state, firmly anchored in the European perspective while preserving its strategic autonomy and strong international integrity.
Throughout 2025, Serbia demonstrated a high level of institutional, economic and geopolitical resilience, despite a combination of strong external pressures, the sanctions imposed on NIS, domestic political tensions and global volatility. Rather than triggering destabilisation, the restrictive measures targeting NIS acted as a catalyst, accelerating diversification, the modernisation of energy capacities and the transformation of Serbia’s strategic approach to supply security.
Serbia has positioned itself as a stable and predictable actor, capable of balancing between East and West, strengthening its regional role and remaining committed to European integration while maintaining strategic autonomy. Entering 2026, the country faces new political and economic challenges, but also significant opportunities to further consolidate stability, strengthen institutions and bolster its international standing.
Should the course of reforms, responsible policymaking and energy-sector modernisation continue, Serbia has the potential to reaffirm its status as a key factor of stability and one of the region’s most resilient actors.
Nevertheless, several potential risks remain in the period ahead across a number of critical domains: geopolitical (shifts in the regional and global balance of power); energy-related (dependence on external suppliers and potential disruptions in energy markets); economic and financial (the impact of global recessions, inflation and currency fluctuations); and political and institutional (domestic pressures, an institutional crisis of confidence and challenges in consolidating democratic processes).
The International Institute IFIMES notes that Serbia possesses strong resilience capacity. With the consistent implementation of reforms and strategic policies, the country can further reinforce its role as a stable, predictable and credible actor in the region and the wider international landscape.
Ljubljana/Washington/Brussels/Belgrade, 8 December 2025
[1] IFIMES - International Institute for Middle East and Balkan Studies, based in Ljubljana, Slovenia, has a special consultative status with the United Nations Economic and Social Council ECOSOC/UN in New York since 2018, and it is the publisher of the international scientific journal "European Perspectives." Available at: https://www.europeanperspectives.org/en
[2] Russia-/Ukraine-related Designations; Venezuela-related Designations; Publication of Russia-related Determinations; Issuance of Russia-related General Licenses and Frequently Asked Questions. Available at: https://ofac.treasury.gov/recent-actions/20250110
[3] IMF Executive Board Concludes the 2025 Article IV Consultation with the Republic of Serbia and Completes the First Review Under the Policy Coordination Instrument. Available at: https://www.imf.org/en/news/articles/2025/06/30/pr-25228-serbia-imf-concludes-2025-art-iv-consult-completes-1st-rev-policy-coor-instrument?
[4] IMF Staff Reaches Staff-Level Agreement on the First Review under the Policy Coordination Instrument and Conducts Discussions of the 2025 Article IV Consultation with Serbia. Available at: https://www.imf.org/en/news/articles/2025/06/10/pr-25192-serbia-imf-agree-on-1st-rev-policy-coor-inst-conducts-discs-2025-art-iv-consult?
[5] Growth in the Western Balkans Holds Firm Amid Global Uncertainty. Available at: https://www.worldbank.org/en/news/press-release/2025/04/28/growth-in-the-western-balkans-holds-firm-amid-global-uncertainty?
