Oil fuels the Syrian regime

Bassel Oudat , Friday 4 Oct 2019

Syrian Kurdish forces under US protection are supplying the Syrian regime with oil and gas despite the existence of US and European sanctions, writes Bassel Oudat in Damascus

Oil fuels the Syrian regime

A recent report by a Syrian human rights group has revealed that the Syrian Democratic Forces (SDF) affiliated to the Kurdish Democratic Union Party (PYD) that now controls, with US help, large swathes of northern Syria is violating US and European sanctions against the regime led by Syrian President Bashar Al-Assad.

The SDF is supplying the regime with large amounts of oil and gas, reportedly done through middlemen and brokers transporting and processing the oil and gas and then selling it in local markets, the report said.

The report by the Syrian Network for Human Rights (SNHR) published on 19 September said the SDF not only sells the oil and gas to a regime that it claims it opposes, but also does not transparently declare the revenues from the oil and gas and how the money is spent. SNHR activists fear that revenue from the oil and gas is being spent on supporting terrorism.

There are some 20 oil fields in the governorates of Raqqa, Hasakah and Deir Al-Zor in Syria, 11 of them under SDF control. They have a much larger capacity than fields under regime control, which means that the Kurdish forces now control 80 per cent of oil and gas production in Syria.

The Kurdish forces are selling crude oil to an annual amount of $420,000 a day, amounting to some $12.6 million a month and $378 million a year in addition to their natural gas revenues.

According to the report, the broker between the SDF and the regime is the Katerji Group, which has been on the list of sanctions drawn up by the US and Europe since September 2018. This is the same company that facilitated the oil trade between the regime and the Islamic State (IS) terrorist group.

The SDF began supplying the regime with oil in 2017 when Kurdish fighters took control of oil and gas fields in Deir Al-Zor after fighting off IS. The Kurds have also been supplying the regime with oil from the fields of Al-Ramilan and Al-Sweidiya in Hasakah since the PYD took control of these two fields in mid-2012. There are agreements between the two sides regarding these oil fields, and the workers there are paid by the regime.

According to the Syrian Ministry of Petroleum and Mineral Resources, the country consumes 4.5 million litres of petrol every day. Once imports of oil products from Iran stopped due to US sanctions against Tehran, together with the close monitoring of Iranian ships carrying oil to be processed in Syrian refineries and the halting of some ships from reaching Syria, there has been a serious shortage of petroleum products in the country.

Despite the strict US sanctions, bans and penalties, it appears that the two main sources of oil fuelling the regime remain intact under the nose of the US. Iran continues to send oil to Syria by sea via the Mediterranean and Suez Canal, via land from Iraq, and from Kurdish forces that control most of Syria’s oil and send it to the regime in times of crisis. The latter forces are protected by the Americans.

In 2019, the Wall Street Journal wrote that the SDF plays a key role in providing the Al-Assad regime with crude oil and violates US sanctions against the regime. It added that the CIA was aware of these details and did nothing to stop the trade. Every day, dozens of trucks loaded with fuel travel from SDF-controlled areas to regime-controlled areas, while areas under regime control suffer serious shortages in fuel after a drop in Iranian oil coming by sea due to the US sanctions.

The regime’s war on those who have been demanding its ouster, now in its seventh year, has seriously damaged Syria’s oil sector. Between 2012 and 2014 the opposition gained control of the country’s oil fields, especially in the northeast where the major fields are located.

Around 70 per cent of Syria’s oil and gas fields came under opposition control, but it was unable to manage the oil or operate the wells. Starting in 2015, IS and Kurdish militias associated with the PYD, the Syrian arm of the Kurdish Workers Party the PKK in Turkey, began to grab oil wells from the opposition. They forcibly displaced local residents to vacate the area and transform the oil regions into purely Kurdish ones.

Syria is not a large oil producer, and it has only 2.5 billion barrels out of the Arab world’s 714 billion. Syrian oil production has also dropped since the start of the uprising from 370,000 barrels a day to less than 70,000 barrels a day, at a loss of more than $3 billion. The oil is a security blanket for the regime since the oil revenues over the past four decades have been deposited into a private account and nothing has been spent without a direct order from the president.

The Kurdish militias do not have the capacity to refine, market, or export crude oil. They have tried to build small refineries but were unsuccessful, so they resorted to an agreement with the regime, through brokers, whereby the regime would be responsible for maintenance, equipment and necessary parts.

The two sides are thus joined in an intricate alliance that allows them to profit from and syphon off Syrian oil, with most of the profits going into private pockets to fund irregular operations by both sides.

Oil is sold and bought under the nose of the US and reaches the regime with Washington’s knowledge. The oil saves and supports the regime, helps and funds Kurdish forces, funds “dirty operations” by both sides, and creates warlords. If the issue is not discussed seriously on the world stage, then the funds of these Kurdish militias will grow, and they will be able to obstruct any future political solution to the crisis in Syria.

They could eventually have the resources to fund “irregular” operations, even against the US itself, just like any other irregular group in the country whose only real ally is its own interests.

*A version of this article appears in print in the 3 October, 2019 edition of Al-Ahram Weekly under the title: Oil fuels the Syrian regime 

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