Collapse of Assad regime shakes Russian and Iranian influence

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, received asylum in Russia, which had supported his authoritarian rule for years. Thus, after 24 years, Assad's regime has come to an end.

The armed conflict in Syria, ongoing since 2011, is far from over. Assad's overthrow has created a power vacuum, with various groups now vying for control and influence in the country. The fight against the regime was a common goal that united diverse factions, and now the struggle for control—particularly over strategic resources—has resumed.

"Syria is divided, with different forces operating in various areas. One certainty is that Assad is out of the Syrian equation," comments Jacek Tarociński, a Polish analyst in the security and defense team at the Center for Eastern Studies, in an interview with money.pl.

Syria was once a significant oil producer in the Mediterranean region. Before the conflict, the country possessed substantial resources, especially in northeastern regions like Deir ez-Zor. Natural gas fields, with major sites in the Homs and Palmyra regions, were also vital 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. Most of its production was exported to Europe and Turkey.

However, sanctions imposed on Bashar al-Assad's regime, and above all, the internal war, led to a collapse of the oil potential. While Syria produced about 406,000 barrels daily in 2008 (a single barrel contains 42 US gallons, equivalent to 159 liters), by 2018, production had dropped to just 24,000 barrels. Recent years have shown only a trace amount. In 2023, production was 135,000 barrels, with the latest data from July 2024 indicating around 95,000 barrels, according to Trading Economics data.

Oil fields became valuable prizes for various armed groups, including the so-called Islamic State (Daesh). Some of the oil was used for internal needs, and some was sold on the black market to finance these organizations. 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.

For example, the main refineries in Homs and Banias were attacked multiple times. In January 2020, an attack on the underwater pipelines at the Banias refinery caused significant infrastructure damage. The remaining network of oil and gas pipelines also suffered due to either 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 discussion with money.pl.

- However, Syria still has significant extraction potential and could also aspire to be a transit country, for example, for gas and oil from Gulf states," the expert adds.

Part of this potential is being utilized by the Kurds (SDF - Syrian Democratic Forces), who control a sizable portion of northeastern Syria. Key oil fields, such as al-Omar, are under their control. Production from these fields primarily serves local needs and finances Kurdish forces' activities.

Yet, this potential is also under threat, this time 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 Kurds and maintain 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 while specifying they cannot operate east of the river," Tarociński notes.

However, Syria still retains significant extraction potential and may aspire to be a transit country, observes Tymon Pastucha. Turkey will particularly be interested in this, as it aims to become a regional energy hub. It can be assumed that Turkey will be engaged in infrastructure development and regional stabilization. Similar observations can be made regarding Gulf states like Iraq or Qatar, he notes.

As the PIIA expert explains, developing gas infrastructure is not guaranteed due to the growing prevalence of LNG, which might be more attractive than long-term and capital-intensive pipeline investments. "We must consider the political climate, particularly the stability of the situation in Syria, before such investments can be made," Pastucha cautions.

Moreover, substantial capital will be required. American involvement is uncertain. On one hand, Donald Trump argued against further U.S. involvement in the Syrian war. On the other, in late 2019, he expressed interest in having American oil companies manage the remaining Syrian oil and gas fields after the success of eliminating ISIS leader Abu Bakr al-Baghdadi.

China and India, who have maintained neutrality in this conflict, are also serious players in the region. The Chinese giant CNPC and Indian corporation ONGC held shares in the Syrian Al-Furat Petroleum Company, one of the largest oil producers in Syria before the conflict. Their activities are currently very limited.

The shock caused by Bashar al-Assad's fall has also struck a blow to regime-supporting Russia and Iran, weakening their positions. The Russians are withdrawing their forces and personnel from military bases, including the strategic port of Tartus, a naval base on the Mediterranean Sea, and are pulling out aircraft 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 possible they may reach an agreement with one of the rebel factions. Remember, the opposition is not a unified group; they were united primarily by the goal of overthrowing Assad," notes the expert.

Russia used its ties with Assad to advance its interests. Among the main extraction companies operating in Syria's oil sector 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 off the Syrian-Lebanese coast of the Mediterranean Sea.

However, Russians were active in the area even earlier, with Soyuzneftegaz signing an agreement in late 2013 with the Syrian government to search for and exploit oil and gas. Due to the war, the agreement was not fulfilled, and operations ceased in 2015. Four years later, two other Russian companies, Mercury LLC and Velada LLC, began efforts to explore and extract resources in Syria.

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