Fears of Iranian Retaliation Weigh on Exhausted Syrians

A Druze Sheikh near a Syrian army position in Quneitra, Golan Heights, on July 30 (AP)
A Druze Sheikh near a Syrian army position in Quneitra, Golan Heights, on July 30 (AP)
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Fears of Iranian Retaliation Weigh on Exhausted Syrians

A Druze Sheikh near a Syrian army position in Quneitra, Golan Heights, on July 30 (AP)
A Druze Sheikh near a Syrian army position in Quneitra, Golan Heights, on July 30 (AP)

Damascus remains unclear about its official stance on a possible Iranian retaliation against Israel following the assassination of Hamas leader Ismail Haniyeh in Tehran.
State media has avoided discussing the potential fallout, even though there is speculation that Iran might use Syrian airspace and territory for any response.
Syrian analysts told Asharq Al-Awsat that Tehran seems to be overstating its plans for retaliation, especially compared to its actions in April when it launched drones and missiles after senior military leaders were killed in a strike on its consulate in Damascus.
They suggest that Iran is looking to strengthen its negotiating position with Washington and the international community and is unlikely to risk a major conflict that could result in significant losses, particularly to its nuclear program.
The analysts also noted that Iran might rely on its regional allies in Syria, Lebanon, and Yemen for its response.
Damascus, worn out from years of conflict, understands this but feels unable to either distance itself publicly or fully commit to any actions, except reluctantly.
There are concerns that Iran could use southern Syria as a base for retaliation, which might disrupt ceasefire agreements and reignite conflict with Israel. Analysts also warn that any decision Damascus makes could have serious consequences.
Fears of an imminent Iranian response are causing Syrian markets to freeze, with many people anxiously waiting for news.
Journalists in Damascus are working late, expecting any moment to see the start of a potential conflict that could push Syria back to conditions from a decade ago.
In border areas near Iraq and Lebanon, people are scared of being affected by an Iranian strike on Israel.
In western Homs, where the Iran-aligned Hezbollah group is active, locals say that “Iranians and Hezbollah are secretly moving into civilian areas, only becoming known when Israel targets them.”



Iraq Faces 2025 Fiscal Squeeze Amid Oil Price Decline, Adviser to PM Says 

A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
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Iraq Faces 2025 Fiscal Squeeze Amid Oil Price Decline, Adviser to PM Says 

A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)

Iraq faces a budget crunch in 2025 due to the slump in the price of oil, the overwhelming source of government revenue, a top economic adviser to Prime Minister Mohammed Shia al-Sudani said.

"We don't anticipate major problems in 2024, but we need stricter financial discipline for 2025," Mudher Saleh told Reuters in an interview late on Monday.

Iraq, OPEC's second-largest producer, is heavily dependent on oil revenues. The hydrocarbons sector accounts for the vast majority of export earnings and some 90% of state revenue.

This huge reliance on oil makes Iraq particularly vulnerable to fluctuations in global crude prices.

Still, Iraq increased its budget in 2024 even after record spending in 2023, when more than half a million additional employees were hired into the already-bloated public sector and a capital-intensive nationwide infrastructure revamp began.

The 2024 budget rose to 211 trillion dinars ($161 billion) from 199 trillion dinars ($153 billion) in 2023, maintaining a projected deficit of 64 trillion dinars, Saleh said.

The budget assumes an oil price of $70 per barrel in 2024, around $6 less than the likely average price this year.

Saleh said that paying salaries and pensions on time remain a top priority. They account for 90 trillion dinars ($69 billion), or over 40% of the budget, and are a key factor of social stability in Iraq.

"The government will pay salaries even if it costs everything. Salaries are holy in Iraq," he said.

Infrastructure development, meanwhile, could be refocused on the most strategic projects - such as key road and bridge works in the capital Baghdad - if the state finds itself in a financial crunch, he said.

To bolster finances, Iraq is focusing on increasing non-oil revenues through improved tax collection but is not exploring any new levies, Saleh said.

He estimated that Iraq loses up to $10 billion annually due to tax evasion and customs-related problems.

Concerns for the 2025 budget reflect a challenging global oil market. Oil prices have been on a downward trend since mid-2022, with Brent crude, the international benchmark, falling from over $120 per barrel to below $75 in recent days.

This decline is largely attributed to weakening global demand, particularly from China, the world's largest oil importer, as its economic growth slows down.