The United States has only to gain from the likely military intervention which will give it unrestricted access to Syria’s oil reserves, with a larger control over the neighbouring oil producers and trade routes. The intervention comes at an opportune time for the superpower when the global economy has forced many into bankruptcy. The Gulf War, Afghanistan, Iraq, Libya, and now Syria have happened for the same reason and there was one thing common in all – the United States of America.
By Ashay Abbhi
Syria continues to burn even as Washington goes through its military intervention plans in detail – oil tycoons are pointing out the prominent targets: Assad-controlled oil fields. As the war leads to an inevitable division of Syria’s oil resources between the government and the rebels, the international political debate on the country has been refuelled, resulting in the major powers taking a clear stance. Russia and China, on the one hand, and the US and its allies on the other may be favouring opposite factions but their reason is the same – oil.
Even as the US navy vessels, smugly deployed in the Mediterranean close to the three Syrian oil export terminals, await their orders, the world wonders if the decision to intervene has come at a time when it is too convenient for America. Has the US been deliberately delaying a response just because Syria is not as big a player in the oil world as Libya, a prominent member of the global oil cartel, the Organization of Petroleum Exporting Countries (OPEC)?
The swiftness of the US-led international intervention in Libya in 2011 was commendable – the war broke out in February and the NATO jets were flying over Tripoli by the third week of March and within eight months the hostilities had ended. The way Syria is being dealt with by the same international community is a tad different.
The Syrian conflict started in March 2011, but all of 2.5 billion barrels of Syrian oil have been successful in making an impact on Washington only recently, after news of alleged chemical warfare surfaced.
Syria is comparatively bigger in oil production than any of its neighbours except Iraq, but with the American troops guarding so many other oil fields across the globe, Syria is not on the top of its priority list. However, as the war spreads to the oil fields, America is getting restless by the day – especially as Assad still controls many of them. America was the first to slap an embargo on Syria’s oil which was followed by the European Union (EU), in an attempt to cut the government’s major source of income. The EU was the major market for Syrian oil even though it accounted for only about 1% of the total EU oil imports. In a well-calculated reversal, the EU lifted the sanction as soon as the rebels were able to gain hold of some of the oil in the country. After an ‘oily’ handshake between them the oil trade resumed; only this time the proceeds went to the rebels who became stronger with the cash influx. This ensured that at least the oil with the rebels was being controlled by American allies which left only the government-controlled fields to worry about. But the chemical attacks solved even that for America making it the perfect opportunity to launch a military intervention campaign which will ultimately lead to the ouster of the government, and American companies seizing control of the oil fields; all the while keeping its philanthropic façade intact.
A recent video released on the internet asserting that Syria has discovered the largest oil and gas reserves in the world off its coast has added fuel to fire. While the US is looking to exert its military muscle to get the rebels to power and repeat an Iraq by placing its puppet on the throne, Russia and China are supporting Assad to maintain their political and economic ties. China has, thus far, been giving only moral support to Assad, whereas Russia, much to America’s consternation, has extended armed support as well, despite declaring its unconditional commitment to the Geneva Conventions. By scoring these brownie points with the current government both, Moscow and Beijing, will expect to be rewarded through oil and gas contracts for Gazprom and Sinopec, acquiring significantly greater power in terms of oil reserves.
Syria is strategically placed on the world map, a fact that once helped the country’s trade grow by leaps and bounds in the yesteryears but has now become a bane, threatening its very existence. Its proximity to Europe via Turkey has put it on the route map of every trade that takes place between these the Middle East and Europe. The pipeline network in the country is quite developed and is often used for international oil and gas transportation. Turkey, the northern Syrian neighbour has two major pipelines running into Europe which could be damaged during the military strike. Syria also falls on the route of the Suez-Mediterranean pipeline through which nearly 800,000 barrels of oil are being transported daily. The military attack could make this pipeline susceptible to destruction which could result in an acute shortage of oil supply to the Western nations. However, an intervention will lead to greater American control on these pipelines and trade routes which will help it gain negotiating powers with Syria’s neighbours and a command over significant oil trade to the European countries.
The Syrian war has impacted the global oil prices adversely, making the US happier than ever. The reports of a military intervention by the US and its allies coupled with a significantly decreased oil production by Libya as its ports were shut for more than a month owing to armed attacks, have sent oil prices soaring. Brent is trading at upwards of $115/barrel ever since it touched a six-month high of $117.34 on August 28, 2013 while the US crude, WTI, is hovering close to $108/barrel.(1) A steep short-term supply deficit is being speculated if the military intervention takes place as the war is likely to affect the production of oil of the entire Middle East and North African region. The industry anticipates the military strike to trigger a chain reaction as Syria has military, financial and political ties with quite a few of America’s antagonists like Iran, Russia and China, the latter two making their pro-Assad stand clear by vetoing three resolutions against the Assad administration in the United Nations Security Council. With the world, particularly the US and EU, reeling under the after-effects of the latest economic downturn, higher oil prices will not go down well with the international community except for the US economy. Oil is traded in Dollars globally, excluding the EU and a few other countries like Venezuela and Iran who trade in Euros. High prices mean a stronger Dollar and a consequently stronger American economy.
The oil industry’s fears of a possible spill over of the military intervention into the oil producing nations of the Middle East has excited Washington for another reason. With oil exporting nations like Libya, Egypt and a relatively lesser significant Syria being in conflict, the global supply of oil has decreased considerably. There is only one country capable of compensating the oil supply deficit – Saudi Arabia, the perpetual OPEC trump card and an arm-in-arm ally of the US. The American calculation of a fall back on Saudi as a possible aftermath of the military intervention is as accurate as the sun is bright. Saudi has the ability to produce 9.8 million barrels of oil per day which, if produced at full capacity, could more than compensate the oil supply shortage. This benefits the US immensely as it gains an unprecedented control over the global oil supplies and OPEC.
Oil and gas have indeed become the bone of contention for most of the world. As the demand and our dependence on it increases by the day, oil has become synonymous with power for most governments. The United States has only to gain from the likely military intervention which will give it unrestricted access to Syria’s oleum reserves, along with larger control over the neighbouring oil producers and trade routes. The intervention comes at an opportune time for the superpower when the global economy has forced many of its own into bankruptcy. The Gulf War, Afghanistan, Iraq, Libya, and now Syria have happened for the same reason and there was one thing common in all – the United States of America.
Ashay Abbhi is based out of India. An analyst in the field of contemporary energy issues, Ashay’s interests also lie in nuanced issues of war and conflict. With his specialisation in tow, Ashay has explored different angles of energy sector, one of which includes the comprehension of the geopolitics of energy.