Rebel Oil in Syria


Oil is still key to the Middle East. Especially for the latest player, the new Syrian National Coalition for Opposition and Revolutionary Forces. First recognized in the outside world by France, and now by England (Britain Recognizes New Coalition), the Coalition was formed early in November in Doha to unite the splintered opposition groups into a legitimate alliance that has a real chance of securing foreign aid and arms in their fight to topple the Assad regime.

But the Syrian rebels are taking a few things into their own hands. They have captured several major oilfields, two in the country’s southeastern province of Deir al-Zour recently, and are extracting oil that is helping to support the people.

People need oil to operate restaurants and to heat their homes. Most Americans don’t realize that the weather can get very cold in Syria.

The pirated crude has caused a minor oil boom in an otherwise destitute area. Trucks wait around the clock, every day, to fill up at the now-Coalition wells. Fortunately for the rebels, these wells produce a light sweet crude, low in sulfur and high in small molecular weight hydrocarbons.

Although not useable in ordinary vehicles and for most intended purposes, the crude is light enough to be burned, without refining, for heat and cooking, even though it produces a horrible, dense smoke. Some farmers claim it can be used to power farm equipment (Pirated Crude).

But the real trade is in reselling the oil from makeshift tankers and barrels loaded on the backs of trucks. The rebels sell the oil at about $5 a barrel to the people who come to the well. The people resell at three or four times the price, producing a fiscal oasis in the economic wasteland created by war and an international embargo.

Even more important, the rebels captured a key military base on the outskirts of Mayadeen town in the same region which borders Iraq (Rebels Take Oilfields). Since Deir al-Zour province acts as a crucial route for supplies, fighters and weapons for the Coalition, this may also serve as a route out for a nascent oil trade for the rebels.

If America wants to aid the rebels, helping to develop this oil trade would be a convenient place to start.

But the enterprise is not without danger. People are occasionally killed or injured in well fires and explosions (Pirated Crude). The cost to human health and the environment may be great, but the alternatives are worse.

Unfortunately, the Alawite minority not only dominated the Assad regime, they also dominated the economy, technology and military in Syria for decades. So finding engineers and qualified workers for the rebel-held oil fields is difficult. This is another area where America and the West can help.

It is not surprising that the United States is being cautious. Besides Syria’s history as a Russian ally and an ally of Iran, the rebels are a mixed bag of fighters. Some of those availing themselves of the pirated oil want to establish a Syrian Islamic state, some have links to al Qaida (Rebels Take Oilfields). Fortunately for America’s general view of Islam, rebels in Syria are mostly Sunni, as is almost 90% of the population. They are fighting the Alawites, the religious minority that dominates the Assad regime and that has been Iran’s strongest ally. Remember that Iran is generally Shia. Shia was also the oppressed minority in Iraq that deposed the Baathist regime of Saddam, who were natural enemies of Iran’s Shia. Unless you’re talking about the Iraqi Kurds who are more likely to partner with the Syrian Sunni and build pipelines of their own. Then, of course, there’s Hamas, who are technically Sunni but have been so closely aligned with Assad’s Alawites and Iran’s Shia that it is hard to tell.  Maybe that’s why the recent violence from Gaza is so important in establishing Hamas as an independent entity more aligned with the Sunni Brotherhood in Egypt, thereby weaning itself off of Alawite support.

It is enough to make one’s head spin and certainly means almost any move the United States makes will cause problems. In addition, just like the Arab Spring in general, this has been a populist uprising, and is not yet a democracy. It may eventually get there, but who wins this conflict will not be democratically chosen and will not have the interests of America in mind.

The people of Syria will be too busy just surviving.

Speaking of, what about the people of Syria? Syria only had an HDI of 0.63 before the war. If you remember, the Human Development Index is a measure of the overall quality of life for humans and is directly related to access to energy (UN HDI). HDI values fall between zero and one: one is perfectly happy and zero is perfectly miserable. The world presently ranges from 0.28 (Congo) to 0.95 (Norway).

Like much of the developing world, Syria’s HDI has risen over the last 30 years dramatically, from 0.47 to 0.63 (Middle Class, Energy and Terrorism). But most of this rise occurred in the Alawite minority. The oppressed Sunni majority was more like 0.50 before the uprising.

However, nothing lowers the quality of life like war and its blind destruction of the infrastructure necessary to provide a decent life in the modern world. A new Syria will start with a lowered HDI, but it could rebound quickly if the fighting ends before much more destruction occurs and the winner re-establishes the energy foundation of the country. And that is the oil economy.

While Syria obtained a third of its budget from oil sales before the uprising, Syria’s pivotal role in the Middle East has been as a transit state. The pipeline routes to the key Mediterranean ports of Baniyas, Latakia and Tartus are the real treasure for whoever wins this fight (TheNational). And new gas pipelines are envisioned in the near-future from the energy-rich interior of the continent.

As for the Syrian government, no one seems to know how its economy is surviving, if it is at all. It is unclear whether the Assad regime has been able to sell any oil recently, although that is not for lack of trying. Wall Street Journal’s Margaret Coker and Jennifer Valentino-Devries detail how the Assad regime has attempted to evade American and European economic and oil sanctions on the regime (Syria’s Russian Connection).

Syrian oil and finance ministers met with Russian officials to iron out government loans and oil deals. The sanctions are not legally binding on companies that don’t have operations in the U.S. or Europe. Similar sanctions in the U.N. that would be binding internationally were blocked by Russia and China.

Sytrol, Syria’s oil-marketing company, is trying to work through offshore companies formed in Russia and Malaysia in order to work with companies like Gazprombank, the major financial arm of Russia’s natural-gas monopoly, Moscow-based Novikombank, Angola’s state oil company, Sonangol, and even a South African firm, Avon Oil Trading Ltd (Syria’s Russian Connection). The urgency is not only selling oil for money, but obtaining diesel fuel for military and support vehicles.

If you’re confused, so am I. The complex tribal history of the last millennium was not erased when some Westerners drew a few lines on a Map after World War I. The few despots who exploited this complexity since then have made it even harder to develop a lasting peace. Throwing off these yolks is just the first step.



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