With more than 100,000 people dead and many more refugees, when will the humanitarian disaster in Syria be resolved? Major international actors, especially the U.S., hesitate and question what strategic interests are at stake and how to preserve them. Amid the involvement of foreign governments, terrorist attacks, and chemical weapon use, the consequences for oil have been obscured.
In the energy-rich Middle East, Syria is a relative pauper. Before the civil war, it produced about 400,000 barrels of oil a day, making it the 34th-largest producer. Since the war began, production has significantly declined to only 50,000 barrels a day and exports have been cancelled. Assad's government may feel the crunch from reduced trade, but is more concerned with decimating anti-regime opposition.
Similarly, international actors are obsessed with the implications of the latest siege or bombing, while overlooking the energy politics at play. They condemn the violence in Syria and take the moral high ground without fully considering how Syria's political situation actually has enormous consequences for Middle East stability and the oil supply chain.
Additionally, the crisis has split OPEC, with Iran and Iraq providing proxy support to the Alawite Shi'ite regime against the mostly Sunni rebels aided by Saudi Arabia and Qatar. Infighting could jeopardize stable production, as members renege on deals to force concessions that maximize their regional influence. Empirically, OPEC members have selectively raised barrel prices to achieve their political goals.
Spillover beyond Syria's borders would be even more threatening to energy transportation. Syria is at the crossroads of many convoy routes, pipelines, and major waterways, including the Sumed Pipeline, the Suez Canal, and the Strait of Hormuz. Having influence in the region guarantees incredible wealth, with easy access to the European, Mediterranean, and African energy markets. Already, oil and stock prices have fluctuated wildly in reaction to the latest domestic destruction. Yet, many speculators have not imagined the possibility of regional oil shipments being halted. Blocking these passages could profoundly impede global trade and risk major economic turmoil.
The latest policy discussions have centered on whether the American military should intervene or rely on diplomatic channels. There is no clear-cut decision to make. Whether the U.S. acts or stays on the sidelines, its energy exports are still in jeopardy. Intervention would threaten Iraq and provoke terrorist cells, which are inclined to target major oil production infrastructure. Conversely, Saudi Arabia and Qatar would be offended by perpetual inaction. Any major decrease in oil production would be detrimental to the U.S., which is still heavily dependent on Middle Eastern reserves.
Syria may not control oil trading, but it can shape the future of the Middle East energy market.