Due to EU sanctions, international oil companies operating in Syria are adjusting to new realities, as the Syrian government has demanded that they cut production. Meanwhile, the potential for violent unrest in northeastern Syria, a region that contains some of the country’s oil and gas reserves, appears to have risen dramatically with the recent assassination of a prominent Kurdish activist.

As has been widely reported, new EU sanctions targeting Syrian oil exports have left Syria desperately searching for new markets for its oil exports. As shown in the chart below, EU nations (chiefly Germany, Italy, France and the Netherlands) accounted for the overwhelming majority of Syrian oil exports in 2010. As the news sanctions take hold, these countries are ceasing to import Syria’s crude.

Syrian Crude Oil Exports by Destination (2010)*

There are indications that the oil export sanctions may impact the Syrian governments ability to continue its brutal crackdown on anti-regime protesters. In an interview with Dunia Frontier Consultants, a western analyst working in the region said, “it’s literally a question of how much repression they can afford to purchase.”

On Friday October 7th, Mishaal Tamo, a prominent Kurdish activist who had recently been released from prison, was murdered in his home in the majority Kurdish city of Qamishli in northeastern Syria. The next day, Syrian troops killed five Kurds at Tamo’s funeral. It is widely assumed that the Syrian government was behind the killing of Tamo, who was a member of the Syrian National Council. The SNC is a group of opposition figures that spans religious and ethnic groups, including exiles as well as dissidents living inside Syria such as Mishaal Tamo.

The vast geographic distance between Qimishil, and other anti-regime hotspots such as Dera’a on the Jordanian border, and Homs, which lies hundreds of miles to the west of Qamishli near the border with Lebanon, pose logistical problems for the Syrian military. These problems will be exacerbated by plummeting incomes from now stagnant oil exports.

According to the western analyst, “the Syrian regime was worried in March that the Kurdish region would be the first region to revolt, but that didn’t happen. If the Kurdish areas witness larger protests, it will further spread the Syrian security forces out, as they will be forced to send reinforcements to the area. I mean, do they trust the local forces in Qamishli? Or will they have to send elements of the 4th Division? Do they have that kind of fuel?”

Indeed, Syria produces heavy crude oil, which is difficult to refine into fuels. Under its export deals with its EU trade partners, much of Syria’s crude exports were refined in Europe, and sent back to Syria as petrol and diesel. The cessation of oil exports to Europe may not only reduce Syria’s revenues, but they may also mitigate Syria’s ability to continue to widely deploy its armor to disparate volatile regions.

Regrettably, refined fuel shortages will also surely have a deleterious effect on the Syrian population as a whole. It remains to be seen whether this hardship will result in the population further channeling their wrath against the regime, or whether the move will backfire, and they will instead blame their suffering on the West.
(*Sources: Global Trade Atlas, Lloyd’s APEX Database, EIA)

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Posted on Tuesday, October 11th, 2011 at 7:32 pm