Production - in gas: how the situation in Syria will affect energy transit
Experts interviewed by Izvestiya believe thatthe situation in Syria may lead to a restructuring of energy transportation routes to Turkey and Europe. Ankara may become the main beneficiary - it is to its advantage to build a direct route for oil and gas supplies through Syria. Before that, longer and more expensive options were considered to bypass the country with an unstable political situation. What this has to do with the plans to launch a Russian-Turkish gas hub and what investment projects the Russian Federation is realizing in Syria - in the material of "Izvestia".
Oil and gas transit through Syria
On the night of December 8, the armed opposition took control of the Syrian capital Damascus and announced the fall of the regime of President Bashar al-Assad. The head of state held talks with the opposition, after which he decided to leave the presidency and leave the country, instructing them to transfer power peacefully.
Although Syria is not a major player in oil and gas production, it occupies an important geographical position for the transit of raw materials.
Back in 2000, Doha proposed building a pipeline from the oil and gas fields of Qatar and Iran to Turkey and then to Europe. At the same time, one branch was to pass through Saudi Arabia, Jordan and Syria, and the other - through Saudi Arabia, Kuwait and Iraq. In 2009, after lengthy negotiations, the government of Bashar al-Assad rejected the idea of the gas pipeline, and in 2012 signed a memorandum with Tehran on the transit of Iranian gas to Europe through Iraq, bypassing Turkey.
- The political situation in Syria has the potential to disrupt regional logistics and trade routes, as it has been a key link for routes between the Middle East, Europe and Turkey. Damascus and Homs have been affected by the fighting - this has disrupted infrastructure, including ports, roads and pipelines," said Vladimir Chernov of Freedom Finance Global.
The expert explained that the destruction of infrastructure and sanctions have made Syria unsuitable for the use of large transit projects.
- Due to the instability in Syria and its inability to provide safe routes , other countries in the region, such as Turkey, Iran and Iraq, are developing alternative corridors for oil supplies," Farhad Ibragimov, an expert at the PFUR Economics Department, believes.
According to him, Ankara is now actively investing in pipelines bypassing Syria to minimize dependence on unstable territories. It is Turkey that could benefit from gaining influence in Syria to make transportation of raw materials shorter and cheaper.
As Reuters wrote on December 9, the opposition warned Turkey about plans for a major offensive six months ago, and the rebels have a feeling that it has given tacit consent. According to the Turkish newspaper Hürriyet, Ankara is ready to support the Syrian opposition.
The change in the political situation in Syria is taking place on the eve of the potential halt of Ukrainian gas transit from Russia to Europe and against the background of the fact that Russia and Turkey have planned to create a new gas trading center in Istanbul in 2025. This idea was first proposed by Russia back in 2022 because of sanctions and in connection with the Nord Stream explosions. If Turkey manages to build a route for transportation of fuel from Qatar through Syria, Ankara will become the main gas hub in the region.
Now the situation is aggravated by the fact that in November the U.S. imposed sanctions against Gazprombank, which creates difficulties for payment for Russian energy supplies in Europe.
After the coup in Syria on December 9, shares of Turkish construction companies jumped sharply on expectations that they will receive contracts from the new authorities to rebuild Syria. Quotes of cement and ready-mix concrete producer Cimsa Cemento increased by 10%, metallurgical plant Iskenderun Demir - by 10%. And holding Enka Insaat increased capitalization by almost 5%.
At the same time, Turkish President Recep Tayyip Erdogan emphasized that the country has no territorial claims to Syria, where a new political and diplomatic reality is coming. Syria belongs to Syrians with all its ethnic, sectarian and religious elements, he said. The Turkish head of state said he called Syrian leader Bashar al-Assad and offered to "determine the fate of the country together."
Oil and gas quotes due to the situation in Syria
Traditionally, Syria was considered an oil country. However, the maximum production of this raw material in the republic was in the early 2000s - then it amounted to about 600 thousand barrels per day, recalled analyst of FG Finam Nikolai Dudchenko. However, since 2004 the indicators have been declining. Now Syria ranks only 43rd in the world in terms of confirmed oil reserves, which are about 0.2% of the world's total (2.5 million barrels), said Freedom Finance Global analyst Vladimir Chernov.
Nevertheless, as of 17:30 Moscow time on December 9 , Brent crude oil quotes rose slightly - by 1% to $72 per barrel. At the same time, natural gas quotes jumped by about 10% at the opening of trading - to $3.2 thousand per 1 thousand cubic meters.
On the whole, the events in Syria are unlikely to have an overly negative impact on the global economy. However, the situation can destabilize the involvement of Iran - this, in turn, will affect the rise in oil prices, increasing market volatility, says analyst of FG Finam Nikolai Dudchenko.
If prices for raw materials go up, Russia together with other oil producers will benefit from it.
Russian projects in Syria
By the end of 2024, Russia is to complete in Syria an automated milling complex in Homs province - it allows processing about 600 tons of flour per day, Izvestia wrote earlier. As well as a water supply project in Latakia province, which will provide water to 22,000 people, noted Vladimir Chernov from Freedom Finance Global.
In addition, Moscow is helping Damascus in the restoration of the agricultural sector and supplies of agricultural equipment. Russia is actively involved in the exploration and production of hydrocarbons in northeastern Syria, is exploring the Eastern Mediterranean shelf and is modernizing refineries, the specialist added.
- In Syria itself, private consumption is the main driver of growth. At the same time, its growth has practically stagnated, and it continues to undermine purchasing power," warned Pavel Sevostyanov, associate professor of the Department of Political Analysis and Social and Psychological Processes at Plekhanov Russian Economic University.
According to him, Russia will hardly suffer from the political changes in Syria, because investments have taken into account possible risks.
