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Russia, Iran Vie for Syrian Oil ‘Leftovers’

A US military vehicle, part of a convoy arriving from northern Iraq, drives past an oil pump jack in the countryside of Syria's northeastern city of Qamishli on Oct. 26, 2019. (Getty Images)
A US military vehicle, part of a convoy arriving from northern Iraq, drives past an oil pump jack in the countryside of Syria's northeastern city of Qamishli on Oct. 26, 2019. (Getty Images)
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Russia, Iran Vie for Syrian Oil ‘Leftovers’

A US military vehicle, part of a convoy arriving from northern Iraq, drives past an oil pump jack in the countryside of Syria's northeastern city of Qamishli on Oct. 26, 2019. (Getty Images)
A US military vehicle, part of a convoy arriving from northern Iraq, drives past an oil pump jack in the countryside of Syria's northeastern city of Qamishli on Oct. 26, 2019. (Getty Images)

The behind-the-scenes scrap between Russia and Iran over oil wealth in northeastern Syrian regions, which are not held by the Kurdish Syrian Democratic Forces (SDF), has intensified.

Before the eruption of the crisis in 2011, Syria used to produce around 360,000 barrels of oil per day. It now stands at 80,000 bpd.

On Thursday, Minister of Oil and Mineral Resources Bassam Tohme revealed that direct and indirect losses in the sector have exceeded 92 billion dollars. He added that more than 90 percent of the country’s oil reserves are controlled by the United States and their SDF allies in regions east of the Euphrates River. These regions also boast Syria’s most important gas factories and the majority of its agricultural and water wealth.

Qamishli allies
Oil produced in areas east of the Euphrates is either locally used or sent through warlords to the Homs or Baniyas refineries in government-held regions. They are then either returned to the Kurdish-controlled region or used in regime regions.

Some of the oil is also smuggled to Iraqi Kurdistan and later Turkey to provide financial revenues to prop up the autonomous Kurdish administration east of the Euphrates. Observers believes these operations provide some 400 million dollars annually that go to supporting the administration and its 100,000 SDF fighters and policemen.

Western sanctions have targeted mediators between Damascus and Qamishli, as well as Syria’s entire oil sector.

The autonomous administration and American companies have, meanwhile, discussed oil investments. In April 2020, the US Treasury Department granted a rare license allowing little known Delta Crescent Energy to operate in the country.

The company, incorporated in Delaware in 2019, was founded by former Delta Force officer James Reese, former US Ambassador to Denmark James Cain, and John P. Dorrier Jr., a former executive at GulfSands Petroleum, a UK-based oil company that had previously worked in northeastern Syria.

In July, Republican Senator Lindsey Graham said that SDF General Commander Mazloum Abdi informed him that a deal had been signed with an American company to “modernize the oil fields in northeastern Syria”.

The deal was slammed by Damascus, Moscow, Tehran and Ankara. Tohme said the agreement sought to “steal” the Syrian people’s resources.

Former US President Donald Trump said that he was keeping American forces in Syria to protect oil wells and prevent ISIS from capturing them.

Damascus’ allies
Damascus has sought to cut its losses by obtaining oil derivatives from Iran. These naval shipments have, however, been intercepted by the US and Israel. The latest such obstruction took place on Wednesday when a vessel loaded with derivates was barred from reaching Syrian ports.

As Syria is in the grips of a stifling economic crisis and western sanctions, Russia and Iran’s attention has shifted towards investing in oil and gas fields that remain under Damascus’ control. Syria also boasts phosphates reserves.

In 2017, Damascus and Tehran signed four strategic deals for the Iran Revolutionary Guards to run a third mobile phone operator, invest in phosphates for the next 99 years, seize agricultural and industrial lands and set up an oil port on the Mediterranean.

In September 2020, Russia and Syria held a series of meetings aimed at bolstering economic relations. They also upped their military cooperation and deployment at the Latakia and Tartus bases. Soon after Russia’s military intervention in Syria in 2015, it signed an agreement with Damascus that would allow Wagner mercenaries to protect and liberate oil and gas installations from ISIS. In return, it would receive 25 percent of their revenues.

Estimates from 2018 said that some 2,500 Wagner operatives and some 20,000 to 25,000 Iran-backed militants were present in Syria.

With the fighting dying down in March 2020, the race between Russia and Iran to claim Syrian sovereign rights intensified. Iranian militants, as well as the Lebanese Hezbollah and Fatemiyoun fighters from Iraq, have seized the oil and gas fields in the Deir Ezzor and Raqqa countrysides. Pro-Russia forces have, however, sought to expel them.

Russia has sought to obtain oil investment contracts in the Mediterranean. Damascus approved an agreement granting a Russian firm exclusive rights to drill for oil in Syria’s offshore bloc in its exclusive economic zone off that stretches from off the coast of Tartus to the border with Lebanon. The deal lasts 29 years.

Iran still controls the Alboukamal oil wells, which it captured in 2017. It also controls phosphate mines in the Palmyra countryside in spite of repeated attempts by Moscow to seize them.

American officials believe that Russia and Iran’s race for Syria’s resources will grant them a crucial negotiations card when it comes to the war-torn country’s future.

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What Has Assad’s Fall Revealed about the Captagon Drug Trade in Syria?

A Syrian member of the opposition shows amphetamine pills known as Captagon hidden inside an electrical component at a warehouse where the drug was manufactured before the fall of Bashar al-Assad's government at a facility in Douma city, outskirts of Damascus, Syria, Friday, Dec. 13, 2024. (AP)
A Syrian member of the opposition shows amphetamine pills known as Captagon hidden inside an electrical component at a warehouse where the drug was manufactured before the fall of Bashar al-Assad's government at a facility in Douma city, outskirts of Damascus, Syria, Friday, Dec. 13, 2024. (AP)
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What Has Assad’s Fall Revealed about the Captagon Drug Trade in Syria?

A Syrian member of the opposition shows amphetamine pills known as Captagon hidden inside an electrical component at a warehouse where the drug was manufactured before the fall of Bashar al-Assad's government at a facility in Douma city, outskirts of Damascus, Syria, Friday, Dec. 13, 2024. (AP)
A Syrian member of the opposition shows amphetamine pills known as Captagon hidden inside an electrical component at a warehouse where the drug was manufactured before the fall of Bashar al-Assad's government at a facility in Douma city, outskirts of Damascus, Syria, Friday, Dec. 13, 2024. (AP)

Since the fall of former Syrian President Bashar al-Assad, industrial-scale manufacturing facilities of Captagon have been uncovered around the country, which experts say helped flourish a $10 billion annual global trade in the highly addictive drug.

Among the locations used for manufacturing the drug were the Mazzeh air base in Damascus, a car-trading company in Latakia and a former potato chips factory on the outskirts of Damascus.

The factory that once produced the crunchy snack in the suburb of Douma under the name, Captain Corn, was seized by government forces in 2018.

"Assad’s collaborators controlled this place. After the regime fell... I came here and found it on fire," Firas al-Toot, the original owner of the factory, told The Associated Press. "They came at night and lit the drugs on fire but couldn’t burn everything."

"From here, Captagon pills emerged to kill our people," said Abu Zihab, an activist with Hayat Tahrir al-Sham, the main group now ruling the country, as his group gave access to journalists to the site.

Syria's nearly 14-year-old civil war fragmented the country, crumbled the economy and created fertile ground for the production of the drug. Militias, warlords and the Assad government transformed Captagon from a small-scale operation run by small criminal groups into a billion-dollar industrial revenue stream.

The recent ousting of Assad has disrupted these networks and has given a closer look at its operations — revealing the workings of a war economy that sustained Assad’s power over Syria. Experts say the change in Syria might create an opportunity to dismantle the Captagon industry.

How did Syria build its Captagon empire?

Captagon was first developed in Germany in the 1960s as a prescription stimulant for conditions like narcolepsy. It was later outlawed due to heart issues and its addictive properties.

Its amphetamine-like effects made it popular in the Middle East among both elites and fighters, as it enhanced focus and reduced fatigue.

Assad's government recognized an opportunity in the cheaply manufactured drug amid Syria’s economic turmoil and the heavy sanctions imposed on it.

Captagon is produced through a simple chemical process that involves mixing amphetamine derivatives with excipients to form tablets, typically in makeshift labs.

The Captagon trade began industrializing around 2018-2019 as the Assad regime — and other armed groups in Syria -- invested in production facilities, warehouses and trafficking networks. This allowed Syria to emerge as the largest producer of Captagon globally, with some production also occurring in Lebanon.

Most seized consignments of Captagon originated from Syria, according to data by the New Lines Captagon Trade Project, an initiative of the New Lines Institute think tank.

Evidence of the Assad regime’s sponsorship of the Captagon industry is overwhelming, the report published in May said. The Security Office of the 4th Armored Division of the Syrian Arab Army, headed by Bashar al-Assad’s brother Maher oversaw operations and created a coordinated production system, the report added.

Where and how was Captagon smuggled?

Captagon was smuggled across the border using various methods, hiding Captagon in trucks, cargo shipments and goods. Some shipments are concealed in food, electronics and construction materials to evade detection.

The primary smuggling routes were Syria’s porous borders with Lebanon, Jordan and Iraq, from which the drug is distributed throughout the region. Some were also shipped from Latakia port.

In Lebanon, the Captagon trade has flourished, particularly near the Syrian border and in the Bekaa Valley. Lebanese authorities struggled to curb the flow of Captagon from Syria, which analysts say was facilitated by the Hezbollah group, a key Assad ally.

Following the discovery of crates of fruit meticulously packed with bundles of the drug hidden among pomegranates and oranges, Saudi Arabia and the UAE implemented bans on Lebanese agricultural products.

Captagon has also found its way into international markets, reaching as far as Southeast Asia and parts of Europe.

How much revenue did it produce for the Assad regime?

The annual global trade in Captagon has an estimated value of $10 billion, with the ousted Assad family's annual profit reaching around $2.4 billion, according to Caroline Rose, director of the New York-based New Lines Institute Captagon Trade Project.

"Seeing the uncovering of so many industrial-scale facilities affiliated with the regime was shocking but not surprising. There was extensive evidence linking key regime-aligned cronies and Assad family members to the trade," said Rose, whose organization tracks all publicly recorded Captagon seizures and lab raids. The discovery of the facilities, she said, confirmed "the concrete relationship between Captagon and the former regime."

The exact number of factories in Syria remains unclear, but experts and HTS members estimate that there are likely hundreds spread throughout the country.

The future of Captagon in post-Assad Syria

Assad has turned Syria into "the largest Captagon factory in the world," HTS leader Ahmad al-Sharaa stated in a victory speech at Damascus’s Umayyad Mosque on Dec. 8. "Today, Syria is being cleansed, thanks to the grace of Almighty God."

While Assad and his circle may have been the primary beneficiaries, there is also evidence that Syrian opposition groups were involved in drug smuggling, opposition groups, local militias and organized crime networks manufactured and smuggled the drug to finance their operations, analysts say.

"Likely, we will see a short-term supply reduction in the trade, with a decline in the size and frequency of seizures as industrial-scale production is largely halted. However, criminal actors are innovative, likely seeking out new locations to engage in production and smuggling, particularly as demand levels remain stable," Rose said.

They may also "seek out alternative illicit trades to engage in instead," she said.

In addition to dismantling the Captagon trade, the country's transitional government should "establish programs for economic development that will incentivize Syrians to participate in the country’s formal, licit economic sphere," Rose said.