Diplomatic chorus grows for sanctions on Syrian oil

Tougher talk follows Clinton’s call for countries with business ties to Damascus to "get on the right side of history."

By OREN KESSLER
Clinton Blasts Gadaffi 311 R (photo credit: REUTERS)
Clinton Blasts Gadaffi 311 R
(photo credit: REUTERS)
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.
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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.
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Click for full Jpost coverage of turmoil in the Middle East
“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.”