MOSCOW (Reuters) - Oil prices rose to a six-month high on Tuesday as Western powers readied a military strike against Syria, and traders and analysts cited concerns over stability in the Middle East.
Below are facts about Syria’s energy sector and why developments there matter to global oil markets.
SYRIA‘S OIL AND GAS SECTOR
* Syria has not exported any oil since late 2011, when international sanctions came into force.
* “Syria is not a major oil producer (as was Libya), nor is it a major transit point for oil and gas exports (as is Egypt),” said Julian Jessop, head of commodities research at Capital Economics.
“Instead the concern is the risk that Western intervention in Syria could prompt a wider regional conflict, given the support that Iran has provided to the regime of (President Bashar al-) Assad,” he added.
* Prior to the sanctions Syria produced 370,000 barrels per day (bpd), roughly 0.4 percent of global supplies, and exported less than 150,000 bpd, mainly to Europe. The major oil companies working there before the sanctions were Royal Dutch Shell and Total.
* Syria’s current production is estimated at just 50,000 bpd, all of which is refined domestically.
* It is short of oil products and is forced to import them from abroad. Sales of oil products to Syria are still allowed, although most traders have refrained from doing business there. It has been forced to resort to help from strategic ally Iran.
* A move against Syria could have an impact on Western efforts to pressure Tehran over its nuclear program, after trade sanctions have cut Iran’s oil exports by half over the past two years. It still supplies around 1 million bpd to Asian markets and Turkey.
“With a U.S. strike on Syria, making some rapid progress on the Iranian nuclear files will be more difficult, and (Iranian President Hassan) Rouhani will not have been given the opportunity to try a different route,” said Olivier Jakob from oil consultancy Petromatrix.
* The security situation in Iraq, currently OPEC’s second largest producer, has significantly deteriorated because of Syria, said Helima Croft, an analyst at Barclays.
“Syria has deepened Iraq’s sectarian fault lines, with Prime Minister Maliki’s mainly Shiite government widely seen as siding with the Assad regime and Iraq’s Sunni opposition leaders with the Syrian rebels,” she said.
* A Syrian war also has the potential to further exacerbate tensions in large producing countries with significant Shiite populations such as Saudi Arabia and Kuwait, Croft said.
* Complicating the standoff is the involvement of other major players including support from major oil producer Russia for Assad’s government.
“Syria has been at the front of a proxy war between regional powers, and siding with one party or the other in Syria is effectively getting drawn into this proxy war between Iran, Russia, Saudi Arabia, Kuwait,” Amrita Sen, from consultancy Energy Aspects, said.
* Petromatrix’s Jakob added that Syria could pose a risk to the shipment of crudes out of Iraq and Azerbaijan.
“The Bay of Iskenderun, in Turkey off a few miles from the border with Syria, is a major export route for crude oil out of Iraq and Azerbaijan,” he said.
He estimated oil flows running through the bay at 1.2 million bpd or over 1 percent of global supply.
Reporting by Dmitry Zhdannikov in Moscow and Christopher Johnson in London; editing by Jason Neely and Jane Baird