Syria resort to mediators to import oil economy

Informed commercial sources said that Syria is heading to local intermediaries to import oil after the first tenders offered by the caretaker government failed to attract the attention of senior oil traders, due to the continued international sanctions and financial risks.

Official documents showed that the government put forward tenders to import 4.2 million barrels of crude oil, in addition to 100,000 tons of fuel and diesel oil “as soon as possible.”

The sources stated that the tenders, which were closed last Monday, have not been established yet, and that the government is currently negotiating with local companies to meet their oil needs.

Oil insurance crisis and penalties

The difficulty of finding senior suppliers will exacerbate the energy crisis facing the new authorities in Syria, especially after Iran has been arrested, apparently, the regular delivery of oil deliveries that it had previously sent to the country.

It was not possible for Reuters, which reported the news, to verify the names of local companies that may secure these supplies, or the identity of companies capable of providing the large quantities required in the tender.

The suspension of Sharia and the European position

In a statement yesterday, Thursday, Syrian President Ahmed Al -Shara said that he will work to form a comprehensive transitional government representing various groups of society, and focuses on building institutions and managing the country until free and fair elections.

In light of these transformations, the major oil trade companies did not participate in the tenders, which was attributed by informed sources to the financial sanctions and risks surrounding dealing with Syria.

“It is not yet clear whether the European Union will raise the sanctions, in addition to the broader banking problems that increase the matter.”

Last Monday, the European Union announced its approval of a road map to reduce sanctions on Syria with the aim of accelerating the process of economic recovery, but stressed that its approach will be gradual and it can be removed if the correct steps are not taken.

Payment conditions hinder participation in tenders

The sources pointed out that the conditions of payment set by the Syrian government were one of the factors that refrained from potential sellers to participate.

Among these conditions:

• Selling is open credit with the payment of payment.
• Providing a performance bond at a value ranging from 200 thousand to 500 thousand dollars to a Syrian bank as a guarantee for the delivery of oil, a condition that merchants said was unusual in such deals.

The deterioration of the energy sector and the supply insurance challenges

The infrastructure of the Syrian energy sector suffered widespread destruction due to the 13 -year war, which puts the new government in front of major challenges to restore energy security and secure the supplies necessary to operate the country.

In previous media statements, Syrian Oil Minister Ghayath Diab revealed that oil production in the regions of the government does not exceed 10 thousand barrels per day, compared to about 383 thousand barrels per day before the imposition of international sanctions in 2011.

The Minister of Oil added that some fuel needs are met through local production of two lines in Syria, but it did not specify the actual production capabilities of these two facilities.

Gas tenders

In addition to oil, Syria launched another tender for the import of 20,000 tons of LNG, which was closed on January 20, 2024.

However, the result of this tender was not confirmed, amid ambiguity that surrounds the Syrian government’s ability to secure international suppliers due to the sanctions and the continuation of economic uncertainty.