Syria seeks steady flow of Iranian oil

The Syrian government is expressing its concerns on the irregular supply of Iranian oil, as it has been unable to meet Syrian fuel needs.

Topics covered

syria, sanctions, oil prices, oil, iran

Dec 18, 2014

A senior oil official in Damascus was frustrated when asked, late last summer, about the government's ability to fulfill the people’s needs in diesel for the winter of 2014-15.

September was nearing its end, and Syria was waiting for new oil cargo from Iran that did not arrive. Iran is the main source of Syrian fuel for the time being.

Iranian oil tankers have been unsteadily sailing since the end of last winter, for reasons that raised the concerns of those charged with meeting oil demands. It also raised political questions. In a previous visit by Syrian Prime Minister Wael al-Halqi to Tehran, Halqi sensed the [Iranian] will to support Damascus in its battle, which many view as “a front-line battle in defending Tehran, too.”

Yet, the cooperation level on civil issues that are subject to the Iranian government bureaucracy remains less impulsive than the levels of political and military cooperation, which are subject to another authority that is linked to Iran's supreme leader, Ali Khamenei.

[On Dec. 16], Halqi conveyed a message from President Bashar al-Assad to his Iranian counterpart, Hassan Rouhani on the “promotion and prospects to develop bilateral ties and upgrade them to include new fields that strengthen bilateral cooperation. This is in accordance with the interests of the two countries and the two brotherly peoples, and the common will in the face of Zionist, American and Western plans in the region,” according to the Syrian news agency, SANA.

The government delegation headed by Halqi discussed with Iranian officials several cooperation issues, most prominently “the flow mechanisms of Iranian goods to the Syrian market, the provision of oil derivatives by ensuring the frequent arrival of oil tankers to the Syrian ports in order to meet the Syrian people's needs and prevent any crippling crisis.”

Observers believe that the lack of flow can partially go beyond “bureaucratic arguments,” including the great burden that the drop of oil prices placed on the support that Tehran plans to grant for Damascus.

According to economic data, the two countries have previously signed an agreement to secure a credit line of $3.6 billion to meet Syria's needs in crude oil. Earlier this year, Halqi said Syria spends $800 million of it per month to buy the equivalent of 3 million barrels of oil. Earlier this summer, the government was forced to raise gasoline and diesel prices — diesel prices reached international prices — in a measure that economists viewed as a prelude “to fuel price liberalization,” which was denied by the government.

Damascus is entirely dependent on Iranian oil. Yet, economic reports say it also imports Iraqi oil at a low pace. Syrian wells, which produce approximately 220,000 barrels per day, are now controlled by different militias, including the Islamic State (IS).

[On Dec. 16], the European Union contributed to the exacerbation of Syria's oil crisis, as it banned the export or provision of fuel for Syrian civilians and military jets. However, a Syrian official confirmed to As-Safir that “in case crude oil was available, Syria will be able to meet its jets' needs.” The problem remains in the ongoing and steady provision of crude oil, according to the official.

For its part, economic reports indicate that Iran's need for development stands at $130 per barrel. In addition to the the decline of oil prices by half, all this has forced Iran to borrow from its sovereign wealth fund to pay “internal dues.”

Observers believe that the Iranian government understands the situation differently from military and religious leaders, which have created this “problem” in the Iranian oil support [for Syria].

Halqi, who led a high-level government delegation that included ministers of industry, oil, health and electricity, has sought to overcome these obstacles, after his deputy, Foreign Minister Walid al-Moallem, previously visited Tehran.

Halqi met with Iranian officials, most notably President Rouhani, Secretary of the Supreme National Security Council of Iran Ali Shamkhani, First Vice President Isaac Jhangere and Foreign Minister Mohammad Javad Zarif.

SANA said the two sides discussed “bilateral relations in various fields, and the ways to increase cooperation and joint coordination, as well as the situation in the region, where Iranian officials confirmed that Iran's support for the Syrian people will continue, in order to enhance strategic relations between the two countries, and to find mechanisms to expand and increase cooperation and joint coordination at all levels.”

Rouhani stressed that Iran’s leadership, the people and the army will continue to stand by Syria’s side, while Jhangere stressed that in light of the difficult conditions in Syria, “we must provide it with our support.” He added that “Iran's support for the resistance axis, which Syria is part of, is one of the strategic issues.”

The Syrian side discussed “the mechanisms to provide spare parts for Syrian plants, companies, hospitals and power stations,” as Iran is considered the main supplier in light of international sanctions on Damascus.

Halqi stressed at the end of his three-day visit that “the strategic alliance between the two resistant countries will bring down suspicious Western projects that are developed for the region.”

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