Report prepared by: Jamal Mahmoud/Shana Qasim/Exclusive to Geostrategic Studies
Oil has been one of Syria’s most crucial natural resources, playing a significant role in the country's economy and geopolitical standing. However, since the outbreak of the Syrian revolution in 2011, the oil sector has undergone dramatic transformations, shifting control among various actors and facing severe challenges due to conflict, sanctions, and destruction of infrastructure. This article provides an in-depth analysis of the state of Syrian oil before the revolution, during the war, and in the present day. It also examines the significance of the Syrian government’s recent agreement to purchase oil from the Autonomous Administration of North and East Syria (AANES) and its implications for political recognition.
First: Syrian Oil Before the Revolution – A Key Sector Under State Control
Before 2011, Syria had a relatively stable oil sector, with production concentrated in the eastern regions of Deir ez-Zor, Hasakah, and Raqqa. Oil revenues constituted approximately 25% to 30% of total government income, making it a critical component of the national economy.
Key Characteristics of the Oil Sector Before 2011:
Peak Production in the 1990s: Syria’s oil production peaked in 1996, reaching about 600,000 barrels per day (bpd).
Declining Output: By 2010, production had fallen to approximately 385,000 bpd due to aging oil fields and a lack of investment in modern technology.
Export Market: Syria exported around 150,000 bpd, mainly to Europe (Italy and France), while the rest was consumed domestically.
State Control: Oil production was managed by the Syrian Petroleum Company (SPC) and foreign firms like Total (France) and Shell (Netherlands).
Challenges Before the War:
1. Lack of Investment: U.S. sanctions since 2004 limited foreign investments.
2. Inefficient Management: Government mismanagement hindered sector modernization.
3. Declining Reserves: Syria’s oil reserves were depleting, leading to reduced production.
Second: Syrian Oil During the War – Collapse of the Industry and Exploitation by Armed Groups
With the start of the Syrian war in 2011, the oil sector collapsed due to international sanctions, military conflicts, and the rise of non-state actors controlling the oil fields.
Major Changes in This Period:
1. Loss of Government Control:
By 2013, opposition forces captured several oil fields.
In 2014, ISIS seized major oil fields in Deir ez-Zor and Raqqa, using oil sales to finance its operations.
At its peak, ISIS was producing 40,000–50,000 bpd, selling oil on the black market.
2. Destruction of Infrastructure:
The U.S.-led coalition bombed oil facilities to weaken ISIS’s funding sources.
Oil exports ceased due to Western sanctions.
3. Rise of Smuggling Networks:
Oil was smuggled to Turkey, Iraq, and even Syrian government areas, creating an illicit economy.
By 2018, Syria’s oil production had dropped to a mere 24,000 bpd, compared to 385,000 bpd in 2010.
Third: Syrian Oil Today – "SDF" Control and Limited Production
Current Control Over Oil Fields:
After ISIS was defeated, the Syrian Democratic Forces (SDF), backed by the United States, took control of most oil-rich areas in eastern Syria.
Key oil fields under SDF control:
Al-Omar Field: Syria’s largest oil field, capable of 90,000 bpd pre-war, but now operating at a reduced capacity.
Al-Tanak Field: A major oil field in Deir ez-Zor.
Rmelan Fields: Over 1,300 wells located in Hasakah province.
Current Production and Challenges:
Syria’s current oil production is estimated at 40,000–50,000 bpd, significantly lower than pre-war levels.
The lack of infrastructure and investment hinders production recovery.
Oil is mostly sold locally or smuggled, as official exports remain restricted.
Fourth: The Syrian Government’s Oil Deal with the Autonomous Administration – Political and Economic Implications
In a significant move, the Syrian government signed a three-month contract to purchase oil from the Autonomous Administration of North and East Syria (AANES). This agreement carries important political and economic implications.
Key Takeaways from the Agreement:
1. Implicit Recognition of AANES:
The deal suggests tacit acknowledgment of AANES’s authority over oil-rich areas.
Although Damascus does not officially recognize AANES, the need for oil has forced it to engage in direct transactions.
2. Economic Necessity for Damascus:
The Syrian regime faces a severe fuel crisis due to Western sanctions and disrupted Iranian oil shipments.
The agreement helps alleviate shortages in government-controlled areas.
3. Continued Dependence on AANES-Controlled Oil:
Despite tensions, the Syrian government relies on oil from the northeast.
This could pave the way for broader economic and political negotiations.
4. Weakening of Russian and Iranian Oil Support:
Previously, Russia and Iran supplied oil to Damascus, but recent sanctions and logistical challenges have reduced their ability to do so.
This forces the government to seek domestic alternatives, strengthening AANES’s bargaining position.
Fifth: The Future of Syrian Oil – What Lies Ahead?
Challenges to Restoring the Oil Sector:
Rebuilding infrastructure requires significant foreign investment, which remains unlikely under current sanctions.
The U.S. military presence in SDF-controlled areas complicates efforts by Damascus or Russia to regain access to oil fields.
Ongoing conflicts with Turkey threaten stability in oil-producing regions.
Potential Political Impacts:
If economic cooperation between Damascus and AANES continues, it could lead to political negotiations on the future governance of northeastern Syria.
However, Turkey opposes AANES’s autonomy, making a long-term settlement difficult.
Conclusion
The Syrian oil sector reflects the broader political and economic transformations of the country over the past two decades. While Syria remains far from recovering its former oil production levels, the recent oil deal between Damascus and AANES highlights the shifting dynamics of power and economic necessity. Whether this cooperation evolves into a broader political agreement or remains a temporary solution depends on future regional and international developments.
