Syria's ambitious reformation of its energy industry, including billions of dollars in investments, hangs in the balance as new European sanctions come into play.
Yesterday the EU formalised a ban on Syrian oil, adding to international sanctions on the regime of president Bashar Al Assad for its violent crackdown on protesters. Although the sanctions do not ban investing in the Syrian energy industry, they increase pressure on companies to distance themselves from the Assad regime.
Syria pumps about 400,000 barrels of oil a day and had hoped to increase its declining output by opening up offshore fields for the first time and inviting foreign companies to develop its challenging oil shale resources. It had also awarded contracts for its first wind farms and recently signed deals for three pipelines through its territory to transport Iranian gas and Iraqi oil to European markets.
One winner could emerge from the embargo: supertankers. These ships, capable of carrying as much as 2 million barrels, will be in demand if European nations choose to source oil from the Gulf region, according to a Goldman Sachs report. The Gulf is poised to fill the gap in oil supply for Europe created by the sanctions, with Saudi Arabia in particular in a position to step in.