Thursday’s figure of nearly 3.3 million set a grim record. “A large part of the economy just collapsed,” said Ben H… https://t.co/aNB36p7Y2A
Syria sanctions implications
Over the past eight months, the United States and European Union have widened and increased sanctions against the Syrian government, affiliated entities, individuals they perceive to be aiding the government, and third-party actors perceived to be involved in petroleum shipments with Iran and Syria. These sanctions have led to recurring fuel shortages in government-held areas and have pressured the government of Bashar al-Assad into seeking alternative sources of fuel.
According to local news sources, the Syrian government has in recent months begun purchasing oil and fuel products from suppliers operating in opposition-held territory in Syria's northwestern Idlib province, which is largely controlled by the jihadist group Hayat Tahrir al-Sham (HTS), a former Al-Qaeda affiliate. Companies operating in opposition-held areas reportedly import Ukrainian fuel and cooking gas via Turkey, which they distribute from facilities located in the HTS-controlled towns of Idlib, Khan Sheikhoun, Orm al-Kubra, and Sarmada.
IHS Markit assesses that US and EU sanctions which prevent the Syrian government from importing fuel products are indirectly benefiting HTS and other opposition groups in Idlib province by creating a lucrative black market, which the Syrian government is using to circumvent sanctions. This is also leading to price hikes for fuel and cooking gas in opposition-held areas that is further exacerbating the already acute humanitarian situation there. The market price for a litre of petrol or diesel in Idlib province increased by 27% from SYP375 to SYP475 between January and July 2019, according to figures released by the local Watad Petroleum company. The price of cooking gas increased by 23% from SYP4,700 to SYP5,800 per canister in the same period.
HTS almost certainly obtains financial benefit in return for providing operating licences to local fuel distribution companies and enabling them to sell fuel into government-held territories via border crossings that HTS controls. These funds are likely to further increase the military capabilities of HTS and sustain their controlling presence in northwestern Syria. An indicator for reduced demand for fuel products from HTS-backed suppliers would be if the Syrian government manages to secure additional oil supplies from Kurdish-held parts of eastern Syria at a competitive price, or if sanctions on the oil sector are loosened. Increased Islamic State activity in the deserts of eastern Syria would probably aim to disrupt these supplies, and consequently increase the government's imports from HTS-backed suppliers.
Posted 02 August 2019 byColumb
Strack, Principal Analyst - Middle East and North Africa,
Country Risk, IHS Markit and
Shady Alkhayer, Analyst, country Risk, IHS Markit
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