Saturday, September 21, 2013

[batavia-news] Billions of Petrodollars at Stake in the Syrian Civil War

 

 

Billions of Petrodollars at Stake in the Syrian Civil War

Fri, September 20, 2013

Flames emerge from a pipeline as Iraqi soldiers take position inside one of Fakka wells near Amara, southeast of Bagdad. © Reuters

Flames emerge from a pipeline as Iraqi soldiers take position inside one of Fakka wells near Amara, southeast of Bagdad. © Reuters

The Syrian civil war is often accurately framed as an ideological conflict, while other times it's reasonably portrayed as a sectarian one. It is sometimes forgotten that Islamists have economic interests and that the outside parties fueling the bloodshed see it as an investment that can yield sky-high returns.

The oil politics of the region are intertwined with its sectarian and ideological divisions. In the energy contest, every loss for Iran is a gain for its Sunni nemeses and vice versa. The fate of Syria is a decisive battle in that contest with potentially severe strategic and financial consequences for Russia.

The West and its Arab allies have long sought to turn Syria away from the Iranian sphere of influence. After all, Syria is an Arab country, while Iran is Persian. The Syrian population is majority-Sunni, while Iran's is majority-Shiite. And Syria's regime is secular, while Iran's is theocratic.

In 2009, Qatar, Turkey and Saudi Arabia (presumably with American backing) approached the Assad regime with a lucrative deal. A pipeline would be built to deliver natural gas to Europe via Syria, transiting Qatar, Saudi Arabia, Jordan and Turkey.

The losers in this deal would be Iran and Russia. The Russians treasure the dependency of Europe and Turkey upon its natural resources. The Iranian regime would likely lose its only Arab ally and conduit to Hezbollah, as Syria would become economically linked with Iran's Sunni rivals.

Assad turned the offer down and instead double-downed on his alliance with Iran and Russia. In 2011, he signed a $10 billion deal for an Iranian-Iraqi-Syrian pipeline.

As Abraham H. Miller explains, "Assad, in a stroke of the pen, foiled Turkey's economic dreams and potentially brought Iranian oil and gas into the European market by an estimated increase of thirty percent."

U.S. policy is largely to blame for the Iraqi component of the deal. In 2009, the Iraqi government boldly confronted Assad over Syrian support for terrorism. The U.S. decided to stay neutral and the pressure went away. U.S. forces left Iraq the following year. Now, the same Iraqi government has thrown its lot in with Assad.

Iraq has a bright economic future because of its increasing oil production. One billionaire recalls, "A top manager at a leading Western firm said the modern history of the oil business will be split into the pre-Iraq and post-Iraq periods. I agree." The Russian company that is developing a massive oil field in southern Iraq predicts a "revolution" in the oil market in the coming years.

The Saudis, Qataris, Turks and other Sunnis hope that removing Assad will thwart the energy ambitions of Iran, Iraq and Russia. The Arabs' offer to pay for any U.S. military intervention makes financial sense because of the wealth that the proposed pipeline would deliver.

The Syrian civil war isn't just about Syria. It's about the future balance of power in the region.

 

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