Who will control Syria's oil and gas?

It seems as though Syria’s civil war will come to an end, and its president Bashar al-Assad will retake all of the country’s territory. As is typical of a post-war era, regional and global powers are now gearing up to claim the spoils of war.

Syria has become a battlefield for regional and international actors, in part because of its geography: its strategic location on the Mediterranean has always been attractive for other states looking to export oil and gas. 

With the Turkish invasion of northeast Syria now entering its second month, countries that have forces on the ground claim to have control over the country’s oil.

US President Donald Trump’s frequent tweets on protecting Syrian oilfields were in line with defense secretary Mark Esper‘s statement that the US would keep some troops in Syria to protect oil fields.

But Trump’s stance on protecting oilfields amidst the killing and displacement of Kurdish civilians has not been warmly welcomed. Some analysts considered Trump’s stance as one of “blood for oil.” The Russian government also strongly criticized the US, accusing it of stealing Syria’s oil.

After the escalation of civil war, the Syrian government lost control over most of its oil, which fell instead into the hands of Syrian opposition groups and the Islamic State (ISIS).

However, oil products were still available until 2018, with Iran providing fuel to Syria from 2013 onwards - prior to intensified US sanctions. Over that five year period, Iran exported around 2 million barrels each month to Syria and practically saved the country from a fuel crisis.

In 2012, Iran, Iraq and Syria signed an agreement to export Iranian gas via Iraq and Syria to global markets. This deal not only angered the US, but was seen by Saudi Arabia, Qatar and Turkey as “crossing a red line.”

Though the Syrian Democratic Forces (SDF) has lost swathes of territory during the ongoing Turkish offensive in northern Syria, it still controls a significant proportion of Syrian oil and gas resources, including al-Omar oil field, the largest in Syria.

SDF control over Syrian oil fields is important for the future of the Kurds in the country, at least to convince Assad to grant them some form of autonomy. During the escalating fuel crisis in 2018, the Kurds made a deal with the Syrian government and indirectly exported oil to the Syrian refineries in the west of the country.

The US withdrawal from northern Syria and the redeployment of some troops to eastern oilfields does not look like to be a strategic, tactical or logical movement. In fact the President himself does not know what he will do with the oil. This is clear from a tweet from Trump saying “We will be deciding what to do with [the oil] in the future.”

Despite the contradictory positions of the US regarding Syrian oil, Russia seems to have a clear strategy.

 In early 2019, Russia and the Syrian government signed a huge energy deal. 

According to the agreement, Russia has full authority to develop and produce Syrian oil and gas. The deal includes all aspects of Syrian oil and gas, such as the rebuilding of oil facilities and energy infrastructure, and even gives advice and training to the labor force of this sector in Syria.

Russia now controls the gas fields near Palmyra, but has not reached oilfields that are under control of SDF. However, after the agreement between Presidents Erdogan and Putin which saw Syrian troops deployed to the Turkish border, the situation could well change. 

It is now possible that the Syrian government will make a long term return to the oilfields in the east of Euphrates, thus allowing Russia to implement the deal for oil and gas development with the Syrian government. 

While Russia’s upper hand in Syria is emerging, it has already invested heavily in the neighboring Kurdistan Region's oil and gas sector. In 2018, two American oil giants, Chevron and Exxon, relinquished their Kurdistan Region assets , moving to southern Iraq. Rosneft, the largest Russian oil exporter, has now become the main player in the oil and gas sector of the Kurdistan Region.

Rosneft has most of the Kurdistan-Ceyhan pipeline stakes and is going to build the Kurdistan Region’s natural gas pipeline, as well as working in five oil blocks, three of which are in Duhok province, close to the border with Syria.  

In addition, Gazprom Neft, the oil wing of Russian giant Gazprom, has been operating in the area since 2012. 

Russia’s dominance in Syria and heavy presence in the Kurdistan Region will secure a large area rich with oil and gas extending from Iraq to Syria. This will open a big corridor for Russia towards the Mediterranean coast, also a potential route for Kurdish exports to global markets. 

Russia’s dominance in the Kurdistan Region may promote the area to becoming the main part of Russia’s strategy in controlling energy resources of the region. This can eventually lead to increasing investment in the Kurdistan Region’s oil and gas sector by Russian energy companies. 

In recent years, gas discoveries in Mediterranean countries like Israel and Cyprus have led to a new source of energy to supply European energy demand. Israel’s energy minister has long tried to convince the Europeans to build a gas pipeline from Israel and Cyprus to Greece, and then to other European countries.  

Kurdistan’s natural gas resources are larger than that of Cyprus and Greece. Connecting the Kurdistan Region’s gas sources with those of Israel and Cyprus will dramatically embolden the newly emerged Mediterranean gas corridor. Having more routes for exporting oil and gas will dramatically increase the hand of the KRG in negotiations with neighboring countries and its partners. 

Omer Moradi is Rudaw's economics editor

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