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.



Khartoum Markets Back to Life but 'Nothing Like Before'

Men walk along a street past destroyed high-rise building, as efforts to restore the city's infrastructure resumes after nearly three years of devastation caused by war, in the Sudanese capital Khartoum on January 17, 2025. (AFP)
Men walk along a street past destroyed high-rise building, as efforts to restore the city's infrastructure resumes after nearly three years of devastation caused by war, in the Sudanese capital Khartoum on January 17, 2025. (AFP)
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Khartoum Markets Back to Life but 'Nothing Like Before'

Men walk along a street past destroyed high-rise building, as efforts to restore the city's infrastructure resumes after nearly three years of devastation caused by war, in the Sudanese capital Khartoum on January 17, 2025. (AFP)
Men walk along a street past destroyed high-rise building, as efforts to restore the city's infrastructure resumes after nearly three years of devastation caused by war, in the Sudanese capital Khartoum on January 17, 2025. (AFP)

The hustle and bustle of buyers and sellers has returned to Khartoum's central market, but "it's nothing like before," fruit vendor Hashim Mohamed told AFP, streets away from where war first broke out nearly three years ago.

On April 15, 2023, central Khartoum awoke to battles between the Sudanese army and the paramilitary Rapid Support Forces, who had been allies since 2021, when they ousted civilians from a short-lived transitional government.

Their war has since killed tens of thousands and displaced millions. In greater Khartoum alone, nearly 4 million people -- around half the population -- fled the city when the RSF took over.

Hashim Mohamed did not.

"I had to work discreetly, because there were regular attacks" on businesses, said the fruit seller, who has worked in the sprawling market for 50 years.

Like him, those who stayed in the city report living in constant fear of assaults and robberies from fighters roaming the streets.

Last March, army forces led an offensive through the capital, pushing paramilitary fighters out and revealing the vast looting and destruction left behind.

"The market's not what it used to be, but it's much better than when the RSF was here," said market vendor Adam Haddad, resting in the shade of an awning.

In the market's narrow, dusty alleyways, fruits and vegetables are piled high, on makeshift stalls or tarps spread on the ground.

- Two jobs to survive -

Khartoum, where entire neighborhoods were once under siege, is no longer threatened by the mass starvation that stalks battlefield cities and displacement camps elsewhere in Sudan.

But with the economy a shambles, a good living is still hard to provide.

"People complain about prices, they say it's too expensive. You can find everything, but the costs keep going up: supplies, labor, transportation," said Mohamed.

Sudan has known only triple-digit annual inflation for years. Figures for 2024 stood at 151 percent -- down from a 2021 peak of 358.

The currency has also collapsed, going from trading at 570 Sudanese pounds to the US dollar before the war to 3,500 in 2026, according to the black market rate.

One Sudanese teacher, who only a few years ago could provide comfortably for his two children, told AFP he could no longer pay his rent with a monthly salary of 250,000 Sudanese pounds ($71).

To feed his family, pay for school, and cover healthcare, he "works in the market or anywhere" on his days off.

"You have to have another job to pay for the bare minimum of basic needs," he said, asking for anonymity to protect his privacy.

For Adam Haddad, the road to recovery will be a long one.

"We don't have enough resources or workers or liquidity going through the market," he said, adding that reliable electricity was still a problem.

"The government is striving to restore everything, and God willing, in the near future, the power will return and Khartoum will become what it once was."


Trump Heads into Davos Storm, with an Eye on Home

FILE - President Donald Trump is illuminated by a camera flash as he gestures while walking across the South Lawn of the White House, Nov. 2, 2025, in Washington, after returning from a trip to Florida. (AP Photo/Mark Schiefelbein, File)
FILE - President Donald Trump is illuminated by a camera flash as he gestures while walking across the South Lawn of the White House, Nov. 2, 2025, in Washington, after returning from a trip to Florida. (AP Photo/Mark Schiefelbein, File)
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Trump Heads into Davos Storm, with an Eye on Home

FILE - President Donald Trump is illuminated by a camera flash as he gestures while walking across the South Lawn of the White House, Nov. 2, 2025, in Washington, after returning from a trip to Florida. (AP Photo/Mark Schiefelbein, File)
FILE - President Donald Trump is illuminated by a camera flash as he gestures while walking across the South Lawn of the White House, Nov. 2, 2025, in Washington, after returning from a trip to Florida. (AP Photo/Mark Schiefelbein, File)

Donald Trump returns to the Davos ski resort next week after unleashing yet another avalanche on the global order. But for the US president, his main audience is back home.

Trump's first appearance in six years at the gathering of the world's political and global elite comes amid a spiraling crisis over his quest to acquire Greenland.

Fellow leaders at the mountain retreat will also be eager to talk about other shocks from his first year back in power, from tariffs to Venezuela, Ukraine, Gaza and Iran.

Yet for the Republican president, his keynote speech among the Swiss peaks will largely be aimed at the United States.

US voters are angered by the cost of living despite Trump's promises of a "golden age," and his party could be facing a kicking in crucial midterm elections in November.

That means Trump will spend at least part of his time in luxurious Davos talking about US housing.

A White House official told AFP that Trump would "unveil initiatives to drive down housing costs" and "tout his economic agenda that has propelled the United States to lead the world in economic growth."

The 79-year-old is expected to announce plans allowing prospective homebuyers to dip into their retirement accounts for down payments.

Billionaire Trump is keenly aware that affordability has become his Achilles' heel in his second term. A CNN poll last week found that 58 percent of Americans believe his first year back in the White House has been a failure, particularly on the economy.

Trump's supporters are also increasingly uneasy about the "America First" president's seemingly relentless focus on foreign policy since his return to the Oval Office.

But as he flies into the snowy retreat, Trump will find it impossible to avoid the global storm of events that he has stirred since January 20, 2025.

Trump will be alongside many of the leaders of the same European NATO allies that he has just threatened with tariffs if they don't back his extraordinary quest to take control of Greenland from Denmark.

Those threats have once again called into question the transatlantic alliance that has in many ways underpinned the western economic order celebrated at Davos.

- 'Economic stagnation' -

So have the broader tariffs Trump announced early in his second term, and he is set to add to the pressure on Europe in his speech.

Trump will "emphasize that the United States and Europe must leave behind economic stagnation and the policies that caused it," the White House official said.

The Ukraine war will also be on the cards.

Ukrainian President Volodymyr Zelensky is hoping for a meeting with Trump to sign new security guarantees for a hoped-for ceasefire deal with Russia, as are G7 leaders.

But while the largest-ever US Davos delegation includes Secretary of State Marco Rubio, special envoy Steve Witkoff and son-in-law Jared Kushner, who have all played key roles on Ukraine, no meeting is assured.

"No bilateral meetings have been scheduled for Davos at this time," the White House told AFP.

Trump is meanwhile reportedly considering a first meeting of the so-called "Board of Peace" for war-torn Gaza at Davos, after announcing its first members in recent days.

Questions are also swirling about the future of oil-rich Venezuela following the US military operation to topple its leader Nicolas Maduro, part of Trump's assertive new approach to his country's "backyard."

But Trump may also pause to enjoy his time in the scenic spot he called "beautiful Davos" in his video speech to the meeting a year ago.

The forum has always been an odd fit for the former New York property tycoon and reality TV star, whose brand of populism has long scorned globalist elites.

But at the same time, Trump relishes the company of the rich and successful.

His first Davos appearance in 2018 met occasional boos but he made a forceful return in 2020 when he dismissed the "prophets of doom" on climate and the economy.

A year later he was out of power. Now, Trump returns as a more powerful president than ever, at home and abroad.


Russia, China Unlikely to Back Iran Against US Military Threats

A man stands by the wreckage of a burnt bus bearing a banner (unseen) that reads "This was one of Tehran’s new buses that was paid for with the money of the people’s taxes,” in Tehran's Sadeghieh Square on January 15, 2026. (AFP)
A man stands by the wreckage of a burnt bus bearing a banner (unseen) that reads "This was one of Tehran’s new buses that was paid for with the money of the people’s taxes,” in Tehran's Sadeghieh Square on January 15, 2026. (AFP)
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Russia, China Unlikely to Back Iran Against US Military Threats

A man stands by the wreckage of a burnt bus bearing a banner (unseen) that reads "This was one of Tehran’s new buses that was paid for with the money of the people’s taxes,” in Tehran's Sadeghieh Square on January 15, 2026. (AFP)
A man stands by the wreckage of a burnt bus bearing a banner (unseen) that reads "This was one of Tehran’s new buses that was paid for with the money of the people’s taxes,” in Tehran's Sadeghieh Square on January 15, 2026. (AFP)

While Russia and China are ready to back protest-rocked Iran under threat by US President Donald Trump, that support would diminish in the face of US military action, experts told AFP.

Iran is a significant ally to the two nuclear powers, providing drones to Russia and oil to China. But analysts told AFP the two superpowers would only offer diplomatic and economic aid to Tehran, to avoid a showdown with Washington.

"China and Russia don't want to go head-to-head with the US over Iran," said Ellie Geranmayeh, a senior policy expert for the European Council on Foreign Relations think tank.

Tehran, despite its best efforts over decades, has failed to establish a formal alliance with Moscow and Beijing, she noted.

If the United States carried out strikes on Iran, "both the Chinese and the Russians will prioritize their bilateral relationship with Washington", Geranmayeh said.

China has to maintain a "delicate" rapprochement with the Trump administration, she argued, while Russia wants to keep the United States involved in talks on ending the war in Ukraine.

"They both have much higher priorities than Iran."

- Ukraine before Iran -

Despite their close ties, "Russia-Iranian treaties don't include military support" -- only political, diplomatic and economic aid, Russian analyst Sergei Markov told AFP.

Alexander Gabuev, director of Carnegie Russia Eurasia Center, said Moscow would do whatever it could "to keep the regime afloat".

But "Russia's options are very limited," he added.

Faced with its own economic crisis, "Russia cannot become a giant market for Iranian products" nor can it provide "a lavish loan", Gabuev said.

Nikita Smagin, a specialist in Russia-Iran relations, said that in the event of US strikes, Russia could do "almost nothing".

"They don't want to risk military confrontation with other great powers like the US -- but at the same time, they're ready to send weaponry to Iran," he said.

"Using Iran as a bargaining asset is a normal thing for Russia," Smagin said of the longer-term strategy, at a time when Moscow is also negotiating with Washington on Ukraine.

Markov agreed. "The Ukrainian crisis is much more important for Russia than the Iranian crisis," he argued.

- Chinese restraint -

China is also ready to help Tehran "economically, technologically, militarily and politically" as it confronts non-military US actions such as trade pressure and cyberattacks, Hua Po, a Beijing-based independent political observer, told AFP.

If the United States launched strikes, China "would strengthen its economic ties with Iran and help it militarize in order to contribute to bogging the United States down in a war in the Middle East," he added.

Until now, China has been cautious and expressed itself "with restraint", weighing the stakes of oil and regional stability, said Iran-China relations researcher Theo Nencini of Sciences Po Grenoble.

"China is benefiting from a weakened Iran, which allows it to secure low-cost oil... and to acquire a sizeable geopolitical partner," he said.

However, he added: "I find it hard to see them engaging in a showdown with the Americans over Iran."

Beijing would likely issue condemnations, but not retaliate, he said.

Hua said the Iran crisis was unlikely to have an impact on China-US relations overall.

"The Iranian question isn't at the heart of relations between the two countries," he argued.

"Neither will sever ties with the other over Iran."