x Abu Dhabi, UAEMonday 24 July 2017

Pipeline explosion rocks Syria

Syrian and Iranian officials discussed bartering Syrian crude for scarce fuel, according to a document leaked yesterday.

An explosion has damaged a pipeline feeding a Syrian oil refinery, adding to pressure on fuel supplies as the uprising against the government of Bashar Al Assad nears its 11th month.

Yesterday a plume of smoke could be seen rising from the pipeline that carries crude from the Rumailan field to a refinery in Homs, Reuters reported.

The incident will worsen the shortage of fuel in Syria, where residents and businesses are already suffering from western sanctions. But relief could be on the way if Damascus has reached a deal with Tehran to barter Syrian crude for Iranian fuel, as detailed in a document leaked yesterday.

Although Syria normally pumps 400,000 barrels per day (bpd) of oil - nearly as much as Opec member Ecuador - it relied on imports for fuel and heating oil because its heavy, sulphurous crude is difficult to refine. In the first quarter of last year it spent US$1bn (Dh3.67bn), or 6 per cent of its GDP, on such imports.

To pay the bill, Syria relies on revenue from crude sales, which represent most of its export income.

Residents face regular electricity blackouts and in cities such as Homs are forced to wait in line to fill jugs with heating oil.

"Many countries who are producers and exporters of crude oil, many of them are importers of petroleum products," said Manouchehr Takin, an analyst at the Centre for Global Energy Studies in London. "It could also be that their refineries are also not working properly."

Alleged negotiations between Iran and Syria over fuel supplies were detailed in the leaked document. While it was not verified, analysts said it appeared to be genuine.

Iranian officials were considering trading 1 million tonnes of diesel and fuel for 150,000 bpd of Syrian crude, the same amount as all of Syria's former exports, according to the document.

"It confirms the alliance and confirms they're trying to help," said Robin Mills, the head of consulting at Manaar Energy in Dubai. He also contributes to The National.

* with Achraf El Bahi

ayee@thenational.ae

twitter: Follow our breaking business news and retweet to your followers. Follow us