The Syrian Oil: Time for New Approach?

US - Russian Struggle Opens Opportunity for 'War lords'

US forces conduct training with the "Syrian Democratic Forces" in Hasaka countryside on September 7 (EPA)
US forces conduct training with the "Syrian Democratic Forces" in Hasaka countryside on September 7 (EPA)
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The Syrian Oil: Time for New Approach?

US forces conduct training with the "Syrian Democratic Forces" in Hasaka countryside on September 7 (EPA)
US forces conduct training with the "Syrian Democratic Forces" in Hasaka countryside on September 7 (EPA)

With the war in Syria now in its twelfth year and with the US-Russian conflict still ongoing to control the oil sector and its potential, local belligerents and regional opponents have found in oil a rare point of consensus to cooperate and pick clean the country’s wealth and revenues.

Oil production from fields and facilities mainly located in north-eastern Syria was about 400,000 barrels per day prior to the conflict. After the eruption of the conflict in 2011, various warring forces, including opposition factions and ISIS, successively seized control of much of this invaluable oil wealth. Western sanctions placed on the oil sector have caused foreign oil companies to leave the country.

The Syrian Democratic Forces (SDF), a US-backed coalition, currently controls one-quarter of Syria’s territory, including the area east of the Euphrates. This means that the SDF now dominates 90 percent of the oil and over 50 percent of the gas fields, as well as the infrastructure owned by foreign companies, according to legitimate contracts signed with the Damascus government, including Gulfsands Petroleum, Total, and Shell. Oil wells and facilities were cordoned off and “protected” by the US-led coalition forces and SDF.

On the other hand, Damascus announced that the oil sector’s losses since the beginning of the crisis amounted to USD 91.5 billion. Oil Minister Bassam Tohme revealed that the daily oil production is 89,000 barrels, mainly in Kurdish-controlled areas. Tohme describes this oil as being “stolen” from the Syrian people.

International Conflict

After the Russian military intervention in late 2015, Damascus signed contracts with Russian companies to invest in the oil and gas sectors in Syria and its territorial waters. It also contracted with Evro Polis, the Yevgeny Prigozhin-linked company financing Wagner mercenaries, to protect oil and gas facilities and liberate them from ISIS in exchange for 25 percent of their proceeds. This included Evro Polis taking control of Suncor’s large Ebla gas development near Palmyra – an operation that led to many casualties.

This agreement was the cover under which the Wagner paramilitary group operated. Wagner was estimated to have as many as 2,500 men in Syria in 2018. They participated in the fighting in Syria or took part in training and preparation camps in Russia. Some of them have been relocated to Libya and now to Ukraine.

In reality, the agreement between Evro Polis and Damascus only covered areas under Damascus control. In early 2018, Wagner mercenaries launched an assault on the Conoco gas plant in the eastern Euphrates, a position of the SDF, but they were hammered by US artillery and airstrikes that killed about 200 mercenaries.

In late 2019, former US President Donald Trump made a shock announcement that American troops would withdraw from the area around Syria’s border with Turkiye, east of the Euphrates, giving Turkiye the green light to invade northern Syria and putting the SDF, Washington’s allies, under new pressure. On October 6, 2019, Republican Senator Lindsey Graham, together with some US and European officials, persuaded President Trump to keep 900 members of the US military there to protect the oil. Trump later said that "a small number of soldiers will remain in the areas that contain oil," stressing that "we have ensured the security and protection of oil."

In July 2020, Washington announced that SDF Commander Mazloum Abdi informed the Trump administration of the signing of an agreement with the American company Delta Crescent Energy to invest in oil after obtaining a waiver from the Treasury Department from the sanctions placed on Syria. Then-Secretary of State Mike Pompeo said the deal was intended to "modernize oil.”

The situation embarrassed the US Department of Defense which issued conflicting statements. It initially stated that "Syrian oil is for the Syrian people and we remain committed to the unity and territorial integrity of Syria.” It further emphasized that “the US government does not own, control, or manage the oil resources in Syria. The populations in areas liberated from ISIS make their own decisions on local governance.” Former US Defense Secretary Mark Esper announced that "we are now taking measures to strengthen our position in Deir el-Zour to deny ISIS access to the oil fields.” The Pentagon confirmed sending troops and armored vehicles to protect oil fields.

The US-Russian conflict is still ongoing. An opposition leader said that high-ranking Russian officers had repeatedly informed the SDF leaders to allow Russian companies that signed contracts with Damascus to work in the oil fields east of the Euphrates, but the Kurdish officials responded that this required the approval of the US allies that co-control the oil fields.

A stand-off has ensued, with undesirable consequences.

Illegal but all Too Comfortable

The ongoing Russian-US conflict has been aggravated as a result of the war in Ukraine and the stagnation of the military situation in Syria, especially with the absence of a prospect for a political solution while economic and humanitarian needs of the Syrian people escalate. This means that oil has emerged as a factor of tacit cooperation between illegitimate Syrian and foreign belligerents to share the revenues of about 89,000 barrels per day.

According to expert estimates, the Autonomous Administration of North and East Syria (AANES) receives around USD 16 per barrel and a further USD 15 goes to the Syrian government. The remaining amount, which could amount up to USD 50 per barrel, is ‘lost’ and ends up in the hands of these war profiteers. The AANES uses part of the production locally, while the mediators and the war profiteers transport another part to government areas (constituting two-thirds of Syria’s territory) for refining or keeping. It is well reported that oil is also smuggled into Iraqi Kurdistan, either for local use or for smuggling into Turkiye. Oil is sold at very low prices and the fields and surrounding environment now suffer considerable damage.

Officials talk about networks operating in the shadows to smuggle oil and its derivatives between the east of the Euphrates, controlled by the SDF whose linchpin is the Kurdish People's Protection Units (YPG), and the Euphrates Shield areas or other enclaves controlled by the Syrian opposition factions and the Turkish army. It is noteworthy that the military forces in these two regions are involved in daily fighting, strikes, and raids, and exchange accusations of disloyalty, treason, and terrorism.

The same applies to the path crossed by oil tanks from the eastern Euphrates to oil refineries in the areas controlled by the Syrian government. The latter accuses the dominant forces in the east of the country of being traitors and agents of the American occupation. In the same vein, an informed source said that officials in the Kurdistan Workers' Party (PKK) advised leaders of the SDF to coordinate with Damascus regarding the sale of oil internally and regionally.

The cooperation between the belligerents extends beyond the borders. Reports indicate that oil is smuggled into Iraqi Kurdistan and some Turkish regions, with the involvement of mediators and individuals close to the decision-makers there, although political and military differences are ongoing between the decision-makers in Qamishli and Erbil. In this regard, an informed Western official said, "most likely, the decision-makers in these areas are not in a hurry to reach a political solution that would impede the flow of money into their pockets. It is most likely that the war profiteers in the local areas of influence and the neighboring countries do not want the war to end.”

An Alternative Approach -

When President Joe Biden assumed office, his administration announced sanction exemptions that allowed some targeted investments, (although this excluded the oil industry), in Eastern Euphrates. However, it decided not to extend the sanction waiver granted to Delta Crescent Energy for many reasons, mainly the objection of foreign companies holding sovereignty rights in the oil fields. For instance, Gulfsands Petroleum (“Gulfsands”) signed a contract with Damascus in 2003 to invest in and develop Block 26 east of the Euphrates. According to its 2021 annual report, unauthorized production from Block 26 since early 2017 has reached about 20,000 barrels per day, meaning that around 35 million barrels have been produced from the block since then.

Meanwhile, London-based Gulfsands is calling for a "win-win" humanitarian initiative that would enable it and other international oil companies to regain control of their assets. Rather than flow to the sanctioned entities and other unauthorized intermediaries , the Gulfsands initiative would see revenues from oil sales transferred to a UN-controlled fund. John Bell, the managing director of Gulfsands, said a new approach was needed to alleviate the enormous suffering in Syria. He added, "Syria needs billions of dollars that can only be generated with oil and gas,” and described the plans as "a gain for the Kurds, Damascus, and the Syrian people." He also posited that a share of oil proceeds would go to a UN-controlled humanitarian account whose payments are fully in line with the international sanctions placed on Syria.

That might seem simple, but analysts have linked the initiative with the Oil-for-Food program enforced in Iraq before the US invasion in 2003. Bell acknowledges that lessons need to be learned from that ill-fated program as he proposes the initiative to the international stakeholders. This is a particularly timely initiative as discussions continue regarding the extension of providing international aid across borders, including the amendment to include the financing of early recovery projects and other humanitarian and health affairs.



Sept. 11’s Legacy Endures a Quarter-Century Later

A Palestinian man holds up a poster of ousted Iraqi leader Saddam Hussein (L) and wanted al-Qaeda leader Osama bin Laden during a demonstration by some 1,000 people in the West Bank town of Hebron 10 April 2004, in support of the Iraqi resistance against the US-led coalition. (AFP via Getty Images)
A Palestinian man holds up a poster of ousted Iraqi leader Saddam Hussein (L) and wanted al-Qaeda leader Osama bin Laden during a demonstration by some 1,000 people in the West Bank town of Hebron 10 April 2004, in support of the Iraqi resistance against the US-led coalition. (AFP via Getty Images)
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Sept. 11’s Legacy Endures a Quarter-Century Later

A Palestinian man holds up a poster of ousted Iraqi leader Saddam Hussein (L) and wanted al-Qaeda leader Osama bin Laden during a demonstration by some 1,000 people in the West Bank town of Hebron 10 April 2004, in support of the Iraqi resistance against the US-led coalition. (AFP via Getty Images)
A Palestinian man holds up a poster of ousted Iraqi leader Saddam Hussein (L) and wanted al-Qaeda leader Osama bin Laden during a demonstration by some 1,000 people in the West Bank town of Hebron 10 April 2004, in support of the Iraqi resistance against the US-led coalition. (AFP via Getty Images)

Rarely does a day deserve to be called “the day that shook the world.” September 11, 2001, claimed that distinction the moment it happened. At first, many could scarcely believe what they were seeing on their screens. The sight of civilian aircraft exploding into symbols of American power and success in New York and Washington was shocking and deadly. A quarter-century later, there is no denying the mark that day left on the US, the Middle East and the world.

The day set in motion by al-Qaeda leader Osama bin Laden brought down two governments: the Taliban in Afghanistan and Saddam Hussein’s government in Iraq. Afghanistan may have returned to life under a diluted form of Taliban rule, but the Middle East is still paying the price for the regional imbalances created when the US military uprooted Iraq’s Baathist government.

The fall of both governments was an enormous, unintended gift to Iran, now engaged in a military conflict with the United States.

The world was not accustomed to seeing the US attacked at home. On December 7, 1941, Japan attacked the US base at Pearl Harbor in Hawaii. Washington declared war on Japan the next day, and the rest is history.

On September 11, bin Laden brought the war onto American soil itself, prompting George W. Bush to launch a war against what he regarded as strongholds of terrorism.

It was no surprise that a wounded America, led by Bush, decided to topple the government of Mullah Mohammed Omar, who insisted on sheltering bin Laden and ignored calls to distance himself from the al-Qaeda leader or hand him over.

But the greater response came in the Middle East. In 2003, the region watched a US armored vehicle pull Saddam Hussein’s statue from its pedestal in Baghdad’s Firdos Square. It would later watch the hangman’s noose tighten around Saddam’s neck, alarming two men: Libya’s Moammar al-Gaddafi and Yemen’s Ali Abdullah Saleh.

Bin Laden deliberately chose mostly Saudis for the team that attacked New York and Washington, hoping to provoke a crisis and rupture relations between Washington and Riyadh. He did not get what he wanted, but the attacks posed a test across the Muslim world.

Many voices in the US called for terrorism to be uprooted at its source. The attacks unsettled the US and the West’s relations with many countries. They also strained relations between Western governments and Arab and Muslim communities, particularly as waves of migration increased. Today, the far-right is on the rise in several parts of Europe.

Yasser Arafat was living in Gaza that day. He was troubled by the attention focused on a few Palestinians in the West Bank and Gaza who handed out sweets to celebrate the attacks and express their anger at American bias toward Israel.

Despite his advanced age, Arafat insisted on donating blood for those wounded in New York and Washington and went to a Gaza hospital. Some say that, in the first hours, he feared Palestinians might have been involved in carrying out the attacks.

Al-Gaddafi was also alarmed, although both he and Saddam initially imagined that the attacks would weaken the US. Al-Gaddafi asked Foreign Minister Abdulrahman Shalgham to arrange for Algerian President Abdelaziz Bouteflika to tell Bush that Libya was ready to normalize relations and open a new chapter with the US.

Bouteflika conveyed the Libyan position, but the US president told his visitor: “Tell al-Gaddafi that he must immediately surrender his nuclear program’s arsenal, or we will go and destroy it ourselves.”

Shalgham, having gauged the tense mood in America, told a meeting in Tripoli that the United States would occupy Afghanistan, Iraq and Libya. The Libyan leader did not hesitate to bow to Bush’s demands.

The US used Iraq’s alleged possession of weapons of mass destruction as a pretext for attacking the country. It also claimed that the Iraqi government had ties to al-Qaeda. Many did not believe the claim, particularly given the stark differences between Saddam and bin Laden and the vastly different ideologies that guided them.

The prevailing impression was that the allegation had been fabricated. In fact, no relationship existed. But Saddam made a serious error in the 1990s, while bin Laden was in Sudan, when he sent a member of Syria’s Muslim Brotherhood to meet him there. The al-Qaeda leader showed no interest in cooperating with what he called the “infidel Baathist regime.”

The Iraqi government tried again, sending an intelligence official named Farouk Hijazi. A meeting with bin Laden was arranged through Sudanese Islamist leader Hassan al-Turabi. After the meeting, which lasted more than three hours, Hijazi returned to Iraq and advised Saddam to abandon the idea of working with bin Laden, who reportedly demanded permission to establish independent camps on Iraqi soil.

The Iraqi government dropped the idea of cooperating with bin Laden. But US intelligence agencies exploited murky threads of contact between the two sides and used them to justify the invasion of Iraq.

The US toppled the Taliban and Saddam’s government and launched a prolonged hunt for al-Qaeda leaders.

On May 2, 2011, bin Laden, hiding in Abbottabad, Pakistan, was taken by surprise when US troops stormed his compound. America exacted revenge on the architect of the attacks on New York and Washington and disposed of his body at sea.

Osama bin Laden was gone, but al-Qaeda’s imprint exacted an enormous price from the countries of the Middle East.


What Options Does Hezbollah Have in Dealing with Israeli Escalation?

Portraits of current and former Iranian and Hezbollah leaders displayed at a rally, in the southern suburbs of Beirut, Lebanon, September 2, 2026. (Reuters)
Portraits of current and former Iranian and Hezbollah leaders displayed at a rally, in the southern suburbs of Beirut, Lebanon, September 2, 2026. (Reuters)
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What Options Does Hezbollah Have in Dealing with Israeli Escalation?

Portraits of current and former Iranian and Hezbollah leaders displayed at a rally, in the southern suburbs of Beirut, Lebanon, September 2, 2026. (Reuters)
Portraits of current and former Iranian and Hezbollah leaders displayed at a rally, in the southern suburbs of Beirut, Lebanon, September 2, 2026. (Reuters)

Hezbollah finds itself facing an increasingly difficult equation as Israeli escalation in South Lebanon has widened in recent days. How will the party respond to mounting Israeli strikes without being drawn into a broader confrontation that Israeli Prime Minister Benjamin Netanyahu may be seeking either to postpone Israel’s elections or improve his prospects in them.

At the same time, Hezbollah is facing growing pressure from its support base, which is bearing the brunt of the strikes and demanding a response capable of deterring Tel Aviv. Yet the group’s options appear largely constrained by regional developments, particularly the course of US-Iran negotiations, as well as domestic political calculations in Lebanon.

A response could benefit Netanyahu

Sources familiar with Hezbollah’s position said the Iran-backed party has largely avoided signaling whether it intends to retaliate or continue exercising restraint and adhering unilaterally to the ceasefire agreement.

They told Asharq Al-Awsat that Hezbollah is currently focusing on holding the Lebanese authorities responsible for addressing the situation, noting that the group had previously called on the government to engage in dialogue over the expanding Israeli offensive and the failure of negotiations.

The sources see no indication so far that Hezbollah may make a military response. They argue that one objective of Israel’s widening offensive is to provoke Hezbollah and Iran into retaliating and trigger a broader war, which could benefit Netanyahu electorally or help him postpone the polls.

Limited ability to confront Israel

Hilal Khashan, a professor of political science at the American University of Beirut, took a different view, saying Hezbollah has no options left because its military power has collapsed, particularly after its decision to hand over Ali al-Taher — “a symbol of its pride” — to Israel rather than surrender it to the Lebanese army.

“Hezbollah lacks the ability not only to fight Israel, but even to provoke it,” Khashan told Asharq Al-Awsat. “It sent two drones, and we saw the results.”

The academic believes the party’s current priority is to retain its weapons domestically after its military role in confronting Israel has effectively ended, although Hezbollah “insists on living in denial.”

He expects Israeli escalation to continue ahead of the heated elections, saying it will not be confined to Lebanon but could extend to the West Bank, Gaza and southern Syria, amid continued threats of strikes against Iran.

“As for America’s ability to pressure Israel, it appears limited,” Khashan noted, saying this means an expansion of Israeli operations into Lebanon's Bekaa Valley cannot be ruled out.

Three options for Hezbollah

Retired Lebanese army Brig. Gen. Mounir Shehadeh offered a different assessment, identifying three options available to Hezbollah.

“The first is a broad, direct military response,” he told Asharq Al-Awsat. “This is the option that could give Israel the pretext it is seeking to expand its target list, take the escalation deeper into Lebanon and perhaps strike Lebanese infrastructure. It is therefore a high-cost option.”

The second is to refrain entirely from responding. That also carries a price because Israel could interpret it as evidence that it can impose new realities without paying a cost, particularly following the escalation over Ali al-Taher and the continuing strikes, he explained.

The third option is a calibrated, limited response. “In my view, this is the most logical option if the group decides to respond,” Shehadeh said.

Such action would seek to establish the principle that “aggression carries a cost” without triggering an all-out confrontation, he went on to say. Hezbollah could simultaneously maintain a policy of ambiguity by declining to claim every operation, particularly if it wanted to preserve room for political maneuver.

Shehadeh said Hezbollah may be facing a more complicated calculation: whether to respond to Israel now or wait until the direction of US-Iran negotiations becomes clearer.

Waiting for the outcome of those talks would not necessarily mean surrendering or remaining passive, he noted. Instead, Hezbollah could defer a major response while keeping the option of limited retaliation open, since a broad confrontation at this stage could benefit Israel more than the party and give it an opportunity to widen the war before the regional picture becomes clearer.

Shehadeh expects Hezbollah to avoid, in the near term, initiating a major response that could trigger an all-out war. At the same time, the group cannot indefinitely tolerate continued Israeli escalation without responding.

He stressed that the most realistic scenario is to contain the escalation, monitor developments on the ground, take into account the US-Iran diplomatic track and keep open the option of a limited, carefully calibrated response if Israel crosses certain lines.


Iran's Hormuz Leverage Wanes as US Economic Squeeze Bites

Vessels in the Strait of Hormuz near the beach of Bandar Abbas, Iran, September 5, 2026. (Reuters)
Vessels in the Strait of Hormuz near the beach of Bandar Abbas, Iran, September 5, 2026. (Reuters)
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Iran's Hormuz Leverage Wanes as US Economic Squeeze Bites

Vessels in the Strait of Hormuz near the beach of Bandar Abbas, Iran, September 5, 2026. (Reuters)
Vessels in the Strait of Hormuz near the beach of Bandar Abbas, Iran, September 5, 2026. (Reuters)

Six months after a conflict that rattled markets and pushed the region to the brink of a wider war, the tide may be turning against Iran as Washington unleashes an unprecedented economic offensive to achieve what military force could not.

After years of surviving sanctions, Tehran is now confronting one of the harshest squeezes in the regime's history, according to Iranian insiders and regional sources cited by Reuters.

A US naval blockade and tougher sanctions are curbing oil exports, ‌restricting access to foreign currency and exposing growing strains in the economy.

The campaign has led US and regional officials to wager that mounting economic pressure can force Tehran to allow free passage through the Strait of Hormuz, which carries about a fifth of global oil and LNG supplies.

Their bet rests on a simple calculation: Iran is suffering more economic damage than it is inflicting. Efforts to choke off oil exports have cut state revenues, while attempts to disrupt shipping through Hormuz have not triggered the global economic shock Tehran hoped would force Washington to compromise. Energy markets have adjusted and alternative supplies have continued to flow.

Whether the pressure will force concessions remains unclear, the regional sources said. Tehran has failed to impose the costs it hoped would break Washington's resolve but has shown little sign of abandoning demands for sanctions relief, access to frozen assets and recognition of its security role in Hormuz.

Still, a new formula for resolving the standoff is now under discussion between mediators and Iran, the sources said.

Can Tehran outlast the squeeze?

Three senior Iranian sources acknowledged that Washington's campaign is becoming increasingly difficult to withstand. The latest measures have sharply restricted Tehran's ability to access foreign currency, import goods and tap global financing networks that have helped keep the economy afloat.

Iranian leaders fear a worsening economy, marked by surging prices, weaker trade and pressure on household incomes, could reignite nationwide unrest that has repeatedly challenged Tehran.

Shortages of key imports, including fuel and wheat, are becoming an increasing concern, officials said.

US Treasury Secretary Scott Bessent described the strategy as a “one-two punch” combining the blockade with “the toughest sanctions in history.”

“It is going to work in Iran and we are going to collapse this regime,” he told CNBC.

For some US, Israeli and regional officials, such ‌strains strengthen ⁠hopes that economic pressure could eventually carry political consequences inside Iran by triggering unrest, widening rifts within the leadership and weakening its grip on power.

Others remain skeptical that economic and military coercion will produce a political rupture, pointing to decades of failed efforts to destabilize the regime and Tehran's willingness to suppress dissent. They argue Iran's rulers may again prove more resilient than their adversaries expect.

Resilience test

Dennis Ross, a former US negotiator, said Washington may be interpreting Iran's economic distress as evidence of strategic success when the reality is more complicated. Tehran remains determined to demonstrate it can control Hormuz, but appears to be calibrating its use of force while keeping further escalation in reserve.

The Revolutionary Guards may believe Iran can absorb the economic pain and outlast the pressure rather than compromise, ⁠Ross said.

“The Iranians have consistently surprised us in terms of their resiliency,” he added, saying he doubted economic and military pressure alone would force a retreat. Hardliners, he said, may believe they can endure and ultimately secure what they want.

Resilience may depend as much on public tolerance as Tehran's ability to absorb economic hardship, said Burcu Ozcelik, a senior research fellow at the Royal United Services Institute.

“Of course, the economic squeeze raises the risk of public unrest, but for now, a wartime mentality appears to have a significant hold ⁠over the population,” said Ozcelik. “Foreign military intervention, civilian casualties and the perception of a wider civilization confrontation with a US-led order are sustaining a degree of 'Iran-first' patriotic support, tolerance or simply patience with the regime.”

The result is a more stubborn impasse than Washington may have anticipated. Economic pressure is deepening the pain, but Tehran's powerful Revolutionary Guards may see endurance, backed by the threat of escalation, as leverage rather than a reason to concede.

The key question is not whether Iran is ⁠hurting, but whether it is hurting enough to compromise before either side slips toward another confrontation, the regional sources said.

Ross said the clearest path to a deal may lie in the dispute over shipping fees through the Strait of Hormuz. Iran could abandon any demand for a toll while retaining the right to charge for legitimate navigational, security or environmental services, he said.

Such an arrangement could give both sides a claim to victory, allowing Tehran to step back without appearing to capitulate.

“If you could announce that the Strait were reopened,” Ross said, “I think Trump would do a deal.”