Collapse of Assad's regime reshapes the Syrian landscape

On Sunday, rebels from HTS, the Islamist group Hayat Tahrir al-Sham led by Abu Muhammad al-Jolani, and the Syrian National Army seized the Syrian capital, Damascus. President Bashar al-Assad fled and, along with his family, sought asylum in Russia, which had supported his authoritarian rule for years. Thus, after 24 years, Assad's regime has fallen.

The armed conflict in Syria, ongoing since 2011, has not ended. The overthrow of Assad has created a power vacuum. Various groups are vying for control and influence in the country. The fight against the regime was a unifying goal that brought different factions together, and now the struggle for control—and the strategic resources—has begun anew.

Syria is divided. Different forces operate in various parts. One thing is certain: Assad is out of the Syrian equation, comments Jacek Tarociński, a Polish analyst in the security and defence team at the Centre for Eastern Studies, for money.pl.

Syria was once one of the important oil producers in the Mediterranean region. Before the conflict, the country had substantial resources, particularly in the northeastern regions such as Deir ez-Zor. Natural gas fields, notably in the Homs and Palmyra regions, were also significant for the authorities.

As recently as 2010, Syria’s oil trade revenues constituted about 25% of the country’s budget revenues and 20% of export value. The country exported most of its production mainly to Europe and Turkey.

However, sanctions imposed on Bashar al-Assad’s regime, and above all, the internal conflict, led to a collapse of the oil potential. In 2008, Syria produced about 406,000 barrels daily (a single barrel contains 42 US gallons, equivalent to approximately 159 litres - ed.). By 2018, production had dropped to just 24,000 barrels. The last few years have shown only a trace amount. In 2023, it was 135,000 barrels, and the latest data from July 2024 indicates about 95,000. - according to Trading Economics data.

Oil fields became a valuable prize for various armed groups, including the so-called Islamic State (Daesh). Some of this extraction was used for internal needs, and some went to the black market, financing their organisations. At the peak of their activity, Islamists controlled most of the oil fields in eastern Syria, producing between 34,000 and 40,000 barrels daily.

For this reason, both oil fields and infrastructure became targets for British and American planes.

The main refineries in Homs and Banias were attacked multiple times. In January 2020, there was a strike on the underwater pipelines at the Banias refinery, causing serious infrastructure damage. The remaining network of oil and gas pipelines was also seriously damaged, whether due to direct military actions or acts of sabotage.

Currently, Syria is not a significant player in the oil market, as production has fallen more than 12-fold since the start of the civil war, points out Tymon Pastucha, an analyst at the Polish Institute of International Affairs (PIIA), in a conversation with money.pl.

However, Syria still has significant extraction potential and could aspire to be a transit country, e.g., for gas and oil from Gulf states, notes the expert.

Part of this potential is being utilised by the Kurds (SDF - Syrian Democratic Forces), who control a significant portion of northeastern Syria. Key oil fields, such as al-Omar, are in their hands. Production from these fields is primarily used to meet local needs and finance Kurdish forces’ activities.

It must be remembered, though, that it is also under threat. This time, however, from Turkish forces. The Kurds are considered terrorists by Ankara, and their status is a contentious issue even within NATO. American troops have supported the rebels and also have their bases in Syria, mainly near the border with Iraq. President Biden has announced continued engagement in Syria.

It seems that the Americans have given the Turks a free hand to act against the Kurds west of the Euphrates. At the same time, they specified that they cannot operate east of this river, Tarociński points out.

However, Syria still has significant extraction potential. It may also aspire to be a transit country. Turkey will particularly be interested in this issue, as it wants to become a regional energy hub. It can be suspected that it will be interested in infrastructure development and involved in the region’s stabilisation. Similar observations can be made regarding the Gulf states, e.g., Iraq or Qatar, says Tymon Pastucha.

As the PISM expert notes, the development of gas infrastructure, however, is not guaranteed due to the expansion of LNG, which may become more attractive than long-term and capital-intensive pipeline investments. We are also returning to political issues, specifically how stable the situation in Syria will be to consider such investments, Pastucha observes.

Furthermore, capital will be necessary. American? It’s hard to assess. On one hand, Donald Trump argued that the US should not be further involved in the war in Syria. On the other, when he boasted in the autumn of 2019 about the success of eliminating the Islamic State leader Abu Bakr al-Baghdadi, he claimed he wanted American oil companies to manage the remaining Syrian oil and gas fields.

China and India are also serious players, remaining neutral in this conflict. The Chinese giant CNPC and Indian corporation ONGC held shares in the Syrian Al-Furat Petroleum Company, which was one of the largest oil producers in Syria before the conflict. Now their activities are very limited.

The shock caused by Bashar al-Assad’s fall is also a blow to regime-supporting Russia and Iran. Their position has been weakened. The Russians are withdrawing their forces and personnel from military bases. They are also leaving the strategically important - port of Tartus, a naval base on the Mediterranean Sea, and are withdrawing planes from bases deep inside Syria.

Whether the Russians will fully withdraw from Syria remains an open question. Russia supported Assad’s regime, but it’s not excluded that it will find an agreement with one of the rebel factions. Remember, this is not a unified group. They were united by the goal of overthrowing Assad, the expert notes.

Russia used its contacts with Assad to develop its interests. Among the main extraction companies in the oil sector operating in the country were Russian enterprises. In March 2021, the Russian company Capital Limited signed a contract with the Syrian Ministry of Oil and Mineral Resources for exclusive rights to search for oil and gas on the eastern coast of the Mediterranean Sea, in a strip to the Syrian-Lebanese border.

But the Russians were already active here earlier. At the end of 2013, the Russian firm Soyuzneftegaz signed an agreement with the Syrian government to search for and exploit oil and gas. Due to the war, it failed to fulfil the agreements and ceased operations in Syria in 2015. However, four years later, two more Russian companies, Mercury LLC and Velada LLC, undertook the search and extraction of resources in Syria.

Certainly, the current events will limit the influence of Russian extraction companies in Syria, which were interested in investing there and were obtaining lucrative extraction rights from the Assad regime, summarises Tymon Pastucha, an analyst at PIIA.