The Oil War in Syria
By Ksenia Svetlova | August 28, 2020
Two years after the United States' surprise announcement on withdrawal of American forces from Syria, American oil companies are establishing themselves in the northeast sector of the country and signed agreements with the Kurdish leadership (the Syrian Democratic Forces) - much to the displeasure of the Russians. Moscow has succeeded in gaining control of most of Syrian territory on behalf of Bashar Assad's regime, but in the meantime, the oil fields in the northeast of the country remain beyond the reach of Assad and his allies. From Russia's perspective, this constitutes a major vulnerability/weak point on the path to achieving the Kremlin's objectives in Syria: Control of all Syrian territory; weakening all the other players; and control of Syria's natural resources such as natural gas, oil and phosphates. In addition, northeast Syria is an important transportation hub that serves as the conduit for transport of Syrian natural gas to Europe and is a strategic geographical crossroad of Iran, Iraqi Kurdistan, Turkey and Syria, which remains beyond Russia's reach.
An agreement for modernization of the oil fields in northeast Syria signed between the Kurds and the American oil company Delta Crescent several days ago generated a particularly angry response in the Kremlin. According to reports in the American media, one of the clauses in the above agreement forbids the Syrian Democratic Forces from sharing revenues from oil production with the regime of Bashar Assad. Russia's Permanent Representative to the UN Security Council Vasily Nebenzya, again called on the United States to terminate its occupation of Syrian soil and to return the natural resources to the elected Syrian government. Russia accuses the United States of "a wide range environmental disaster threatening north east Syria and Iraq because of the barbaric techniques to extract oil from the oil fields that the United States says it is protecting."
The majority of Syrian oil is located in the northeast of the country that is under the control of the Syrian Democratic Forces. In 2011, the al-Umar field produced 80,000 barrels of petroleum a day (bpd), and Al-Tanak oilfield in Deir ez-Zor produced 40,000 bpd. The sum total of petroleum production at the two largest fields in the Deir ez-Zor and Al-Hasakah regions stood at 200,000 bpd, and constitute together 50 percent of all oil production in Syria.
Revenues from petroleum are the prime source of revenue for Syria. In 2008 oil production reached an all-time high of 406,0000 bpd, while in 2018 it had dropped to 240,000 bpd (not counting 'pirated' black market oil sold on the market at floor prices.
When the fighting ceased, it became evident to Bashar Assad's allies that most of the sources of oil in the country were now beyond their reach, under Kurdish and American control. The primary 'casualty' in this respect has been Iran, which has been unsuccessful in advancing its control of the Bukamal - Al Qaim pass between Syria and Iraq in order to establish a contiguous transportation link between Iran, Iraq and Syria. Iran also struggles with Russian competition that prevents Iran to sign contracts in the energy domain with Damascus. The Russian oil companies received franchises for oil and natural gas exploration in Syrian territorial waters (the Syrian Ministry of Energy estimates that Syria's maritime natural gas deposits stand at 250 billion cubic meters), but the Lebanese experience demonstrates that exploration franchises don't necessarily translated into sure-fire profits.
What are the possible scenarios vis-à-vis the fate of the northeast oil fields in the future?
It is clear to all that Russia is not about to relinquish its attempts to restore Bashar Assad's control over northeast Syria, both to profit from the oil fields in the region as well as to stabilize the Syrian economy. As long as the United States is present in the region protecting the oil fields together with the Kurds, the current friction between Russian and American forces will continue to grow. The last attempt to gain control of the northeastern oil fields by force took place in 2018, and according to foreign sources, in this offensive several hundred personnel from the private Russian militia "Wagner" were killed, These attempts are liable to be repeated as long the economic situation in Syria continues to exacerbate.
Nevertheless, a Russian takeover of the region and the oil in northeast Syria (a full third of Syrian territory) is a possibility only in two instances: If the United States would decide to give up its presence in northeast Syria and withdraw its forces from there, or should the sides reach an agreement that would enable sharing oil revenues between the Syrian Democratic Forces and the central government in Damascus and its Russian partners. In both cases, this transport hub that is liable to connect Iran and Iraq to Syria and other countries will be far more accessible to the Iranians than today. Here lays the danger for Israel. It is important to follow developments in this critical region and coordinate positions with Washington - whose leadership hinges on upcoming presidential elections in November.
Authored by Ksenia Svetlova, a Research Fellow at the Institute for Policy and Strategy (IPS), Reichman University.
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