Bottom Line: In the end, geopolitics is always about natural resources, and almost always about fossil fuels specifically. Following this logic, the end game in Syria could very well be about the Levant Basin (for Qatar and Iran we already know it’s about pipelines from the South Pars gas field).
Analysis: On an internal level, control of Syria’s onshore oilfields is important, but there’s not enough oil onshore to be a game-changer. Syria’s two main centers of onshore oil production are in its eastern province, the north of which is largely Kurdish-dominated territory. In the north-east, the Kurds seem to be largely in control of these fields in a very tentative nod to the regime. Elsewhere in the east, the rebels have largely taken control of these fields, which are now vulnerable to theft and smuggling and as such not producing much for the regime. This control hurts the regime, but does nothing to benefit the rebels since the regime still controls the country’s two refineries and the rebels are not cohesive enough to take advantage of these oilfields.
What we’re really interested in here is not Syria’s onshore oil, but it’s offshore potential in the prized Levant Basin in the Mediterranean Sea. Earlier this month, the Syrian regime tried to get China and Russia interested in exploring for oil and gas in its part of the Levant Basin. This is of course very complicated. Russia and China would certainly like to get their hands on exploration licenses here, but without interfering directly in the Syrian conflict, it’s a big gamble. If Russia, for instance, decides to take the bait, it will be buying its Levant exploration privileges with direct aid to the regime to root out the rebels. China certainly will not play this game. Russia is unlikely to. But this game can also be played with the rebels. The minute one side has a clear advantage (and this hasn’t happened yet), a deal over the Levant Basin will be made. Western and Russian cooperation to this end is certainly not out of the question. Right now, the West is backing the rebels, but this is a hesitant backing now that the rebels have been infiltrated to an irreparable extent by radical Islamic forces. There is only one question in Syria: Who will have the power to sell off the Levant Basin acreage? As soon as that becomes more clear, the end game will be in sight.
Recommendation: Follow the Syria conflict with its Levant Basin prospects in mind. Every mass media report on the conflict should be read through this filter, as should every official statement. Syria’s portion of this territory will become increasingly important with each new development in Israel’s and Lebanon’s portion of this territory. (Next week in our executive report we’ll outline Syria’s offshore prospects in more detail).