EU May Suspend Syria Sanctions on Energy and Transport

FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
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EU May Suspend Syria Sanctions on Energy and Transport

FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo

The European Union may soon suspend sanctions on Syria related to energy and transport but has yet to agree on whether to ease restrictions on financial transactions, according to three diplomats and a document seen by Reuters.
EU foreign ministers will discuss the matter at a meeting in Brussels on Monday. The bloc’s foreign policy chief Kaja Kallas told Reuters on Wednesday she hopes a political agreement on easing the sanctions can be reached at the gathering.
Europe’s approach to Damascus began to shift after Bashar al-Assad was ousted as president in December by Hayat Tahrir al-Sham (HTS), which the United Nations designates as a terrorist group.
Officials see transport as key for helping Syria’s airports become fully operational, which in turn could facilitate the return of refugees. Energy and electricity are similarly seen as important for improving living conditions to help stabilize the country and encourage citizens to come back.
According to an EU document seen by Reuters, diplomats from the bloc's 27 members recommended taking swift action towards suspending the restrictions "in sectors necessary for economic stabilization and launch of economic reconstruction of Syria, such as those regarding energy and transport”.
The diplomats, who are part of a group that negotiates the EU’s foreign policy positions on issues related to the Middle East and North Africa, also recommended “assessing options for reopening banking and investment relations with Syria”.
“The easing of EU restrictive measures would be rolled out in a staged approach and in a reversible manner, regularly assessing if the conditions in Syria allow for further suspension,” the diplomats wrote, pointing to the need for respect for fundamental freedoms and an inclusive transition.
The wording of the document represents a compromise among EU capitals. Some governments want to move quickly to suspend sanctions, while others prefer a more careful and gradual approach to ensure Europe retains leverage.
If a political agreement is announced on Monday, European officials would proceed to work on the technical details of a suspension.
A number of sanctions should remain in place, according to the document, including measures related to the Al-Assad regime, illicit drug trade and arms trade.



Oil Wavers as Trump's Colombia Sanctions Threat Rattles Markets

Pump Jacks are seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson
Pump Jacks are seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson
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Oil Wavers as Trump's Colombia Sanctions Threat Rattles Markets

Pump Jacks are seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson
Pump Jacks are seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson

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Oil market momentum was kept in check on Monday as prices fluctuated in and out of negative territory, with traders on edge despite the US pulling back from initial sanctions threats against Colombia, reducing immediate concern over oil supply disruptions.

Brent crude futures fell 36 cents, or 0.5%, to $78.14 a barrel by 1200 GMT. US West Texas Intermediate crude was at $74.27, down 39 cents, or 0.5%.

Both benchmarks oscillated between moderate gains and losses in early trading.

The US swiftly reversed plans to impose sanctions and tariffs on Colombia after the South American nation agreed to accept deported migrants from the United States, the White House said late on Sunday, Reuters reported.

Colombia last year sent about 41% of its seaborne crude exports to the US, data from analytics firm Kpler shows.

"Even if the sanctions didn't take place, this still creates nervousness that Trump will bully whoever needs to be bullied to get his way," said Bjarne Schieldrop, chief commodities analyst at SEB.

"Fundamentally, the market is surprisingly tight," said Schieldrop, referring to time spreads showing that the price of crude oil for quicker delivery is rising.

Gains were limited by Trump's repeated call on Friday for the Organization of the Petroleum Exporting Countries (OPEC) to cut oil prices to hurt oil-rich Russia's finances and help to end to the war in Ukraine.

"One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil ... That war will stop right away," Trump said.

Trump has also threatened to hit Russia "and other participating countries" with taxes, tariffs and sanctions if a deal to end the war in Ukraine is not struck soon.

Russian President Vladimir Putin said on Friday that he and Trump should meet to talk about the Ukraine war and energy prices.

"They are positioning for negotiations," said John Driscoll at Singapore-based consultancy JTD Energy, adding that this creates volatility in oil markets.

He added that oil markets are probably skewed a little bit to the downside, with Trump looking to boost US output and try to secure overseas markets for US crude.

"He's going to want to muscle into some of the OPEC market share; so in that sense he's kind of a competitor," Driscoll said.

However, OPEC and its allies including Russia have yet to react to Trump's call, with OPEC+ delegates pointing to a plan already in place to start raising oil output from April.

Both oil benchmarks registered their first weekly decline in five weeks on easing concern last week over potential supply disruptions resulting from the latest sanctions on Russia.

Goldman Sachs analysts said they do not expect a big hit to Russian production because higher freight rates have encouraged non-sanctioned ships to move Russian oil while the deepening discount on the affected Russian ESPO grade attracts price-sensitive buyers.

Still, JP Morgan analysts said some risk premium is justified given that nearly 20% of the global Aframax fleet currently faces sanctions.

"The application of sanctions on the Russian energy sector as leverage in future negotiations could go either way, indicating that a zero risk premium is not appropriate," they added in a note.

Elsewhere, Chinese manufacturing data on Monday was weaker than expected, adding fresh concerns over energy demand.