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Over the last two months, fallout from the Iran war has roiled every country in the Middle East. Syria, once a hotspot of regional conflict itself, has kept a remarkably low profile. Weathering the economic fallout and low-level airstrikes (for now), Damascus is asserting its neutrality to position itself as a regional safe haven and future East-West energy hub. New pipelines connecting Middle Eastern oil to Europe via Syrian Mediterranean ports and established Turkish pipelines would be a boon for the global energy market, freshly alerted to the extreme vulnerability of the Strait of Hormuz chokepoint, and for Syria as it seeks to fund its reconstruction. But persistent instability within Syria’s borders and uncertain outside investment amid shifting regional economic priorities threaten these plans, the economic outlook for Syria, and the regional oil market.
Fallout from the Iran War
The timing of the Iran war has been notably fortuitous for Syria. Had it occurred just a year and a half earlier, when the Assad dictatorship was still in power and Iranian proxies and supply chains operated freely in the country, it would have been a significant target for American and Israeli strikes. Israel claimed air superiority in Syria within days of the fall of the Assad regime (which had given Russia relatively free rein in Syrian airspace), allowing Israel more latitude to fly over Syria and use its airspace as an interception zone. This made Syria an asset (albeit not an active one) rather than a liability. Finally, the US finished pulling troops from its al-Tanf garrison and Qasrak air base in February and early April, respectively, ending the major American military presence in Syria established for anti-ISIS operations. The departures, prompted by the Syrian government’s January agreement with the Syrian Democratic Forces, meant that Syria had no major US military installations for Iran to target, unlike its neighbors Iraq and Jordan. As a result, Syria has experienced relatively few Iranian strikes over the course of the conflict.
Syria has seized on these advantages to position itself as neutral and uninvolved. This stance is in part by necessity: the country, only beginning to emerge from over a decade of ruinous civil war and still working to exert control over the whole of its territory, is hardly capable of adding military might to any side. Nor is it able to weather a new war. Iran, which has keenly felt the loss of Syria as a weapons smuggling corridor and staging ground, would like to draw Damascus into the conflict and take advantage of resulting destabilization. Syria declared itself a non-party within days of the war breaking out. It has countered Iranian disinformation that attributed strikes on Israeli targets to Syrian armed groups and promulgated a narrative that Syria is planning to invade Lebanon. The Syrian government also sent troops to its Lebanese and Iraqi borders to prevent Hizballah and Iraqi proxies from infiltrating Syria and using it to launch attacks at Israeli or Gulf targets.
Syria: Safe Haven and Energy Corridor?
Syria is actively pursuing regional and global diplomacy in a bid to survive the conflict and capitalize on wartime shifts in the region. President Ahmed al-Sharaa has spent the last several weeks moving between capitals, emphasizing Syria’s neutrality and expressing its support for countries that have been heavily targeted, like the UAE (despite popular opposition within Syria to the Israel-aligned country). In late March and early April, al-Sharaa visited the UK and Germany for discussions on reconstruction and combatting regional insecurity. Last month, al-Sharaa hosted Ukrainian President Zelenskyy (on his tour of the Middle East to offer drone expertise) to discuss higher-level strategic and economic cooperation. Earlier this week, Syrian Foreign Minister Asaad al-Shaibani made his government’s first visit to Egypt since the fall of Assad, aiming to revive relations. And next week, Syria and the EU are beginning a High Level Political Dialogue, laying the groundwork for the EU to reestablish formal political ties with Syria and deepen economic cooperation. Damascus’ message amid the regional war is clear: Syria is an eager and stable partner.
Anchoring Syria’s bid for newfound international relevance is an effort to establish itself as an energy corridor linking the Middle East to Turkey and Europe. The moment is ripe for overland pipelines: with the US-Iran conflict choking off the maritime oil trade through the Strait of Hormuz and threatening backup routes through the Red Sea and Suez Canal, oil exporters and importers are scrambling for alternate routes. Saudi Arabia and the UAE—able to partially circumvent the Hormuz chokepoint with pipelines to the Red Sea and Gulf of Oman, respectively—are looking prescient to other exporters. Oil shipments have already been trucked from Iraq into Syria on the way to Europe via Syria’s Baniyas port. In April, Iraq and Syria reopened a key bordering crossing—closed for more than a decade—to facilitate further shipments.
Speaking at Turkey’s Antalya Forum in late April, al-Sharaa pitched Syria as a “bridge to security” for the region and a global energy corridor. The plan hinges on reviving and expanding existing and prospective pipeline routes linking Gulf and Iraqi energy production to the Mediterranean and Europe. A leaked document attributed to the US Ambassador to Turkey and Special Envoy to Syria, Tom Barrack, outlines the proposal. It includes an extensive “land bridge” project to repair the currently defunct Kirkuk–Baniyas oil pipeline linking Iraq to the Mediterranean via Syria, estimated to cost $4.5bn, and revive the proposed Qatar-Turkey pipeline (for which a prior potential route had been via Saudi Arabia, Jordan and Syria to the proposed Turkey-Austria Nabucco pipeline). The proposal would also seek to expand the Azerbaijan–Kilis–Aleppo gas line and extend the Arab Gas Pipeline from Egypt through Syria to Turkey.
Prospects for Post-Iran War Development
For all that Damascus has seized upon the opportunities presented by the Iran war, significant downsides and risks remain for Syria and its global economic aspirations. Syria has not been spared the economic fallout of the Iran war. Airspace closures have threatened regional interconnection and commercial service. Interruptions to natural gas supplies have forced rationing. And the sudden return of almost 80,000 Syrian refugees from Lebanon is straining the country’s fragile economy and public services. One bright spot is strong oil prices, as Syria is one of the lucky few able to get oil to market via its Mediterranean Tartus port, which resumed oil shipments in September. Still, economic benefits have been limited due to rising domestic needs and still-damaged oil infrastructure constraining output.
At a regional level, al-Sharaa’s plans for Syria’s economic recovery rely on a stable, investment-friendly region and Gulf patrons willing and able to devote political and financial resources to stabilizing the Levant. But if the war leaves key issues in the Iranian profile unsolved, destabilization and trade insecurity will become a more permanent feature of the region. Long-term insecurity will dampen investment sentiment and incentivize Gulf states to focus on more conservative, insular investment and defense strategies.
Similarly, Syria’s future as an East-West energy hub is far from a done deal. Efforts to turn Syria into an energy corridor and pipeline hub are not new. Last decade, plans were thwarted by concerns around security in the run up to and outbreak of the civil war. Today, concerns are similar: the key obstacle is—as it has been since Assad’s ouster—confidence in the al-Sharaa government’s ability to effectively provide a security guarantee throughout the whole of Syria’s territory. The country is a patchwork of sectarian and ethnic divides and territories formerly controlled by rival armed groups. While Damascus has made strides, including the landmark January deal to incorporate the formerly hostile Syrian Democratic Forces into the Syrian military, sectarian clashes are persistent. Furthermore, there is significant skepticism over the long-term stability of Syria’s strategy of coopting armed groups into its military as semi-autonomous units. Pipelines are being prioritized precisely for their perceived lesser vulnerability to geopolitical swings; if Syria cannot promise to quell internal divisions, its attractiveness as an energy corridor diminishes.
Syria’s ability to profit from the fallout of the Iran war will also be limited by how geopolitical threats to the Strait of Hormuz are perceived by investors in the coming years. Pipeline construction will be expensive and potentially difficult to finance once (or if) oil markets return to a relative normal. If political will for non-maritime routes fades, Damascus will be among the biggest losers, as will energy importers reliant on newly high-risk maritime oil shipping routes.
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