Potential and Outlook for Syria’s Oil Sector

The Syrian oil sector, a cornerstone of the economy, saw sustained investment growth until the conflict began. In 2010, the International Monetary Fund (IMF) projected the sector would contribute 18% of Syria’s GDP. But output began to decline in 2012 due to repeated attacks and international sanctions, which forced eleven international companies—responsible for 49.6% of Syria’s total crude production in 2010—to abandon their operations.

Most of Syria’s oil now is produced in areas controlled by the Syrian Democratic Forces (SDF), cutting off revenue access for Syrians in Caretaker Government (CG) areas. Until 2011 Syria was a net oil exporter, though it still imported refined products due to limited refining capacity. After 2012, the Assad regime imported about 95% of its needs but remained unable to meet full demand. In the Northwest—formerly under the HTS-dominated Syrian Salvation Government and the Turkish-backed Interim Government—imports account for 100% of supply due to the complete absence of oil wells.

During the years of conflict, no significant exploration activities took place. The latest reported quantity on oil reserves in 2010 was 2.5 billion barrels. The Organization of Arab Petroleum Exporting Countries (OAPEC) and other main sources have continued reporting that same figure to date. But in light of ongoing production, we estimate remaining reserves in 2024 to be around 1.8 billion barrels, assuming attacks on the sector during the conflict did not lower the quantities of recoverable oil.

In former Assad-held areas, most crude oil used to come from Iran, based on satellite tracking estimates from United Against Nuclear Iran (UANI). Recently, an Iraqi MP claimed his country was exporting 33,000 barrels per day (bpd) of oil to Damascus. 

The SDF has also been a supplier to other parts of Syria, but data on these operations is scant, as the regime and other de facto authorities did not recognize SDF’s autonomy.

Syria once had a robust oil infrastructure that met much of the domestic market’s demand for refined products. However, OAPEC’s latest reported data (2022) shows that the Homs and Baniyas national refineries produced only 50,000 bpd, a sharp decline from their combined capacity of 240,000 bpd in 2010. After the Assad regime’s downfall, the Baniyas refinery ceased operations when Iran halted its supply of crude oil, while the Homs refinery likely remains operational as long as it continues receiving oil from the fields.

The years of conflict have exhausted—and physically decimated in some cases—oil and gas sector facilities. The latest breakdown of damage reported until the end of the first half of 2023 was estimated at $115.2 billion US.

“Indirect losses” in the chart above represents lost production. It is not entirely clear whether “direct losses” estimates include losses incurred by Russian airstrikes; statements made by the Assad regime did not point out attacks executed by its allies.

Syria’s oil sector is large enough to play a defining role in the country’s economic recovery. However, four key obstacles remain.

First, Western sanctions on the sector block much-needed foreign investment. Sanctions have also resulted in lowering the selling price of oil smuggled by SDF into Iraq. 

Second, heavy bombardment and unprofessional extraction techniques during the conflict may have permanently reduced many fields’ productive capacity due to seismic shifts. This uncertainty raises doubts about whether Syria can achieve self-sufficiency, let alone export, without future discoveries or increased output. Only thorough inspections can confirm this.

Third, the legal status of many foreign investments is already disputed and likely to become increasingly so going forward. We will cover this topic in the next issue of Syria in Figures. 

Finally, the sector’s future remains contested, with the SDF—currently producing what we estimate at 86% of Syria’s oil—reportedly insisting that 50% of the oil it controls be allocated to its local government in a future unified state.