A worker walks past idle pumpjacks at an oil field on the outskirts of Qamishli, Syria, Feb. 3. (AP Photo/Bernat Armangue)
During the May 13 Saudi-U.S. Investment Forum in Riyadh, President Donald J. Trump made a surprise announcement that he would lift U.S. sanctions on Syria. He said “It’s their time to shine. We’re taking them all off.” Trump continued, “Good luck Syria, show us something very special.” He received rapturous applause from the hundreds of regional dignitaries and international business leaders present, indicating that the decision was popular with his Saudi hosts and attendees seeking new investment opportunities in the Middle East.
Trump’s announcement marks a dramatic shift in U.S. foreign policy. This will have ramifications for the European oil majors, including Shell, TotalEnergies, and OMV of Austria, that were the main operators in Syria’s upstream oil and gas sector. Syria’s oil production just before the civil war broke out in 2011 stood at around 385,000 barrels per day of crude oil, with exports estimated at 109,000 b/d. Total’s joint venture with the General Petroleum Corporation in the Deir Ezzor Petroleum Company produced 27,000 b/d before operations were suspended in 2011, after the European Union tightened sanctions. Similarly, Shell held stakes in the 100,000 b/d Al-Furat Petroleum Company through its joint venture with China’s CNPC.
But the prospects of these firms rushing back in are slim. Large swaths of the country are still outside the control of the transitional government. Syria’s Kurds, represented by the U.S.-backed Syrian Democratic Forces, control key oil-producing regions in the northeast and have enjoyed a level of autonomy they will not easily relinquish. Negotiations between the interim government in Damascus and the SDF led to a barebones framework agreement in March that could open the way for eventually integrating SDF forces into the Syrian state army, though most of the details remain to be hammered out.
Security is also a pressing concern. Many oil and gas fields, especially in eastern Syria, were damaged or seized during the conflict, with some infrastructure targeted by Islamic State group fighters and other militant groups. The $1.2 billion Elba project, a joint venture between Canada’s Suncor and the General Petroleum Corporation, was brought online shortly before the war began, only to suffer severe damage. Whether firms like Suncor or Croatia’s INA, which operated the Hayan block producing gas and condensates, are willing to reinvest is not guaranteed.
Meanwhile, Chinese energy firms may be poised to fill the void. CNPC, Sinochem, and Sinopec all had operations in Syria before the war and are used to operating in high-risk environments as they enjoy state backing. A recent visit by Chinese delegations to Damascus for talks with Energy Minister Mohammed al-Bashir suggests Beijing is already exploring expanded roles in postwar recovery.
Gulfsands Petroleum, a United Kingdom-listed company, is the lone Western player actively advocating for reentry. The firm seeks to resume development in Block 26, located near Al Hasakah in northeast Syria, in which it holds a 50% stake. Earlier in May, Gulfsands CEO John Bell led a delegation to Damascus for talks with the Ministry of Energy before heading to Washington to make his case to senior U.S. government representatives. He wrote on his LinkedIn page, mere days before Trump’s decisive action on Syria sanctions: “Gulfsands believes the energy industry and Syria’s indigenous oil & gas resources can play a huge role in the country’s future, providing vital energy for the Syrian people and a means to generate important foreign currency revenues for the Syrian Treasury. These benefits cannot be realised with current sanction restrictions in place.”
In addition to upstream prospects, the potential for Syria to become a downstream hub is being discussed. The 140,000 b/d Banias refinery, currently operating at half capacity, will need to be rehabilitated to reduce Syria’s dependence on refined products. Imports currently come mainly from Russia, but the lifting of sanctions could allow Syria to diversify suppliers and reduce transportation and transaction costs.
Regional players, such as Jordan and Qatar, could also support Syria’s recovery. Jordanian ports, including Aqaba, are reportedly in talks to offer storage and trucking services to facilitate the flow of fuel and crude into Syria. Qatar has expressed interest in supplying natural gas via Jordan’s pipeline network, which could ease power generation costs and reduce blackouts. Turkey hopes that Syria could eventually serve as a transit corridor for Qatari or east Mediterranean gas flows through Syria to Turkey and on to Europe.
Still, there are significant financing gaps. International donors remain skeptical, and private investors will need strong legal assurances that there will be no lingering exposure to international sanctions. The current government in Damascus must build credibility and establish a functioning regulatory framework if it hopes to secure the billions of dollars in capital requirements.
Even with oil and gas revenue eventually returning, the road to recovery will be long. It will involve repairing war-torn cities, restoring public services, and reintegrating millions of displaced citizens. The potential is there – Syria has significant natural resources, a strategic location, and a skilled diaspora – but unlocking it will require careful coordination among government, industry, and international partners. Trump’s headline-grabbing declaration may have opened the first door. But whether the key players – in Washington, Brussels, Damascus, Ankara, and, also, Beijing – can take the necessary steps to peel away layers of sanctions, rebuild and modernize a damaged oil infrastructure, and get Syria’s oil production flowing at prewar levels remains to be seen.
The views represented herein are the author's or speaker's own and do not necessarily reflect the views of AGSI, its staff, or its board of directors.
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