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Oil Politics: How Syrian Kurds Use Oil For Political Leverage

An oil derrick works the land of eastern Syria (Sirwan Kajjo)

Middle East Center for Reporting and Analysis

RIMELAN, SYRIA – “Where does all our oil go to?” my Kurdish driver asked as we drove past more than a dozen hefty trucks loaded with crude oil. The cargo convoy was heading to Syrian regime-held areas.

Syria’s seven-year civil war has left the Kurds with increasing power over the oil fields in their territory, adding yet another layer of complexity to the already complicated picture of the war-torn country.

The Democratic Union Party (PYD), the main party in Syrian Kurdistan, took control of most Kurdish cities in July 2012. The takeover didn’t involve fighting with Syrian regime forces as the latter withdrew to focus on fighting Sunni rebels elsewhere in the country.

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But it wasn’t until March, 2013 that the PYD and its military wing, People’s Protection Units (YPG), controlled the sprawling oil and gas fields in the Kurdish region. At the time, the PYD had won a Syrian government contract bid to provide security and protection for all oil fields in Syria’s northeast. According to a local oil engineer, the Syrian regime renewed the PYD contract every six months for the first three years.

Syria’s richest oil fields lie in the Kurdish region. But since the first oil exploration in early 1960s, Syrian Kurds had not benefited directly from oil revenues as the regime had centralized the oil sector – just like any other sector in Syria – and thus monopolizing oil production.

Prior to 2011, daily production of oil in Hasaka province reached 20,000 cubic meters, which equalled approximately 120,000 bpd. The Swediyeh Field in Rimelan is one of the largest oil fields in Syria, which also has significant amounts of natural gas reserves. There are more than 1,300 oil wells across the Kurdish-majority province. Despite changing hands in 2013, public workers and engineers in Rimelan and other fields have remained in their positions – although work has decreased dramatically.

Military gains against the Islamic State (ISIS) terror group, coupled with increasing U.S. support, have allowed the PYD and its affiliated groups to control more than a quarter of Syria’s territory – thereby making them the second largest entity after the Syrian military in Syria. This has emboldened the PYD to act as a powerful rival to the regime, not as a subordinate.

Subsequently, the PYD has hired its own workforce to operate alongside state workers. And because state workers have less salaries, the PYD has constantly tired to tempt them by offering generous financial incentives. For example, in many occasions one PYD bonus doubled the monthly salary of a government-appointed engineer. The objective is to buy loyalty and gradually reduce Syrian regime’s influence over the oil industry.

Oil Transport

The rise of ISIS in 2014 forced the regime and PYD to resort to alternatives for transporting oil from the Kurdish region to Syria’s two refineries in Banias and Homs.

In early 2015, ISIS damaged the major pipeline that was connecting the Rimelan oil fields to both refineries, leaving the PYD and Damascus with no options but to transport crude oil overland – using middlemen who facilitated the process through ISIS-held territory.

The Katerji company was hired as a contactor to haul crude oil on a daily basis. The Damascus-based company made 700 trucks available to transport oil to Banias and Homs refinies. Katerji was the same company that used to buy oil from ISIS in Deir Ezzor and sell it to the Assad regime.

Although it still remains unconfirmed, an ad hoc pipeline has been built to between northeastern Syria and the Kurdistan Region of Iraq. The oil export reportedly has not stopped, despite frequent political disputes between the PYD and the ruling Kurdistan Democratic Party (KDP) in Erbil.

Local sources estimate current oil production at just over 40,000 bpd.

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The PYD is not the only party benefiting from ongoing oil production.

According to several accounts, the regime gets 60% of oil revenues and the PYD gets 25%, while 10% goes to the Sunni Arab group al-Sanadid Forces and the Syriac Christian group Sutoro gets the remaining 5%. Both al-Sanadid and Sutoro have aligned themselves with the PYD administration in northeastern Syria, while maintaining their ties with Damascus.

What’s Next?

The PYD-led administration recently has had a couple of important meetings with the Syrian regime in Damascus to discuss the future of the Kurdish region, including security and military matters.

But one of the main issues that would arise at some point during future negotiations between the two sides is oil.

The PYD wants to capitalize on its presents gains in order to expand its leverage when it comes to talks with Damascus.

To that end, the PYD administration has been trying to institutionalize the oil industry by bringing people with real expertise to take charge as opposed to military folks who were in control in earlier stages.

While the situation throughout the country remains fluid, one thing is certain; oil would be something Syrian Kurds could use to further their political autonomy.

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