As the Syrian insurgency and counterinsurgency lurch into their sixth month, a
growing chorus of Western diplomats is calling to hit the Bashar Assad regime
where it hurts most – its pocketbook. Syria’s energy reserves are small by
international standards, but its fuel industry is the lifeblood that keeps the
regime’s moribund economy alive.
Late last week the Obama administration
for the first time urged countries buying oil and gas from Syria to cut the
cord. Secretary of State Hillary Clinton has described sanctions as the best
method for applying pressure on Damascus, but said such actions would be largely
up to other nations because US economic activity in Syria is limited to
nonexistent.
RELATED:Syrian naval and tank assault on Latakia kills at least 21 Clinton: Syria would be better off without Assad 'Obama, Saudi king urge end to Assad's crackdown' Clinton hinted, however, that Washington might be making
headway in persuading European nations, China or India to curtail their own
energy ties with Damascus, saying “stay tuned” when asked what progress
Washington had made.
“We urge those countries still buying Syrian oil and
gas, those countries still sending Assad weapons, those countries whose
political and economic support give him comfort in his brutality, to get on the
right side of history,” she said last week.
US officials said it was the
first time Washington had explicitly called for a boycott of Syrian oil since
anti-Assad protests erupted in March.
The US Energy Information
Administration said Syrian crude exports – around 380,000 barrels a day,
generating the bulk of its hard currency – go mostly to European nations
including Germany, Italy and France.
According to a report released
earlier this month by the Washington-based Foundation for Defense of
Democracies, oil is projected to account for at least one-quarter of Syria’s
state income, or about $4 billion of the government’s $17.8b.
budget.
“Oil enables Damascus to pay its loyalist security forces,
purchase military hardware such as tanks, and acquire technology to suppress
mass internal dissent,” said the report, a final version of which will be
presented this fall.
“Syria does not have the technology or resources to
meet its demand for petroleum and therefore relies heavily on foreign companies
to develop its energy resources on leased blocks of land... Persuading foreign
investors to terminate their Syrian business ties could be an important source
of leverage for pressuring the Assad regime,” the report said.
Noting
that sanctions implemented against Iran could serve as an instructive precedent,
the report continued: “International sanctions have frozen more than $60b. in
foreign investment in Iran’s energy sector and hampered Iran’s ability to
develop its estimated $4.4 trillion in natural gas reserves,” adding that Iran
has reportedly promised Assad $5.8b. in loans and 290,000 barrels of oil each
day out of apparent concern over the survival of the Assad regime, its only
close ally in the Arab world.
Mark Dubowitz, FDD executive editor and
director of its Iran Energy Project, said important sanctions bills have
recently been introduced in both houses of the US Congress, but that the most
consequential steps towards tough sanctions will have to be made by the European
states most deeply involved in Syria’s energy industry.
“Hopefully we’ll
see the president get up and make the statement everyone’s been waiting for for
months and months – that Assad has got to go,” Dubowitz said by phone from
Washington.
“It’s months too late, but it’s something that needs to be
said now and unequivocally while thousands of Syrians are being mowed down in
the streets.”
The leading companies involved in Syria’s oil industry hail
from Britain, the Netherlands, France, China, Russia and Canada. Dutch giant
Shell – whose subsidiaries account for 6 percent of total Syrian oil production
– has already come under pressure from the Catholic advocacy coalition Pax
Christi and the Euro- Mediterranean Human Rights Network to cease all work with
the Assad regime.
“Through its production activities in Syria, Shell
provides 55,000 barrels of high quality sweet Syria Light per day to Syrian
refineries,” the report said.
“The refineries in Homs and Baniyas supply
the fuel for the Syrian military, police and other security sectors.”
A
Shell representative in London insisted that the company’s Syrian ties are in
compliance with international law, but that the company “condemn[s] any violence
and the human rights abuses it represents and we have deep concern over the loss
of life.”