Amid the war on Iran, Gulf states and companies find themselves facing a massive repair bill one no less consequential than the immediate losses in exports following Tehran’s targeting of oil and gas facilities across the region.

Preliminary estimates by the U.S.-based firm Rystad Energy suggest that the cost of rehabilitating the Gulf’s energy infrastructure could exceed $25 billion. The figure is likely to rise, as it accounts for extensive damage to LNG liquefaction lines, refineries, storage facilities, ports, and even some power stations.

Yet the central question is not merely the size of the bill, but where the money will go, who will pay it, and whether it will reshape the Gulf’s investment landscape.

Where Does the Bill Lie?

1. Liquefied Natural Gas: Ras Laffan, Qatar as a Case Study

The largest component of the repair bill lies in the liquefied natural gas (LNG) sector. For instance, an Iranian strike on Ras Laffan Industrial City in Qatar destroyed two out of 14 liquefaction trains, as well as a gas-to-liquids (GTL) facility.

The result was a shutdown of 17% of Qatar’s gas export capacity equivalent to 12.8 million tons annually. Repairs and reconstruction are expected to take between three and five years, due to global shortages in the supply of large gas turbines.

The CEO of QatarEnergy estimated annual revenue losses at around $20 billion, confirming that the company would declare force majeure on long-term contracts with Italy, Belgium, South Korea, and China.

It is important to distinguish between market losses (i.e., declining market share) and actual repair costs. The former reflects lost revenues, while the latter concerns rebuilding damaged units.

2. Refineries: Bahrain’s Sitra and Saudi Arabia’s Ras Tanura

The second layer of costs relates to refineries. Iranian drones targeted Bahrain’s Sitra refinery (BAPCO) twice in March just two years after the completion of a $7 billion modernization project.

The attacks damaged new distillation units and a fuel storage tank, forcing the company to bring back international contractors under uncertain wartime security conditions.

In Saudi Arabia, the Ras Tanura refinery (550,000 barrels per day) was also hit. However, the presence of local maintenance teams enabled a relatively swift restart.

These incidents underscore that repair costs depend not only on the scale of damage, but also on each country’s ability to rapidly mobilize contractors and equipment.

3. Storage, Ports, and Supporting Infrastructure

The bill also includes damage to storage facilities, export terminals, and supporting power stations in the UAE, Kuwait, and Iraq.

According to IIR data, attacks led to the disruption of approximately 1.9 million barrels per day of refining capacity across the Gulf, following outages in Kuwait, Bahrain, and Iraq, as well as maintenance-related shutdowns in Ras Tanura.

Additionally, attacks on gas facilities in the UAE and Kuwait caused fires and production cuts. However, sources indicate that the physical damage there is less severe than in Ras Laffan and Sitra, meaning repairs could be completed within months.

Sectoral Breakdown of Costs

According to Rystad Energy, 49% of repair costs will go to engineering and construction, 39% to equipment and materials, while logistics and operations will each account for no more than 6%.

In other words, the bulk of spending will be directed toward rebuilding core infrastructure and commissioning new facilities, while comparatively smaller amounts will be spent on transportation and project management.

This breakdown highlights why engineering is the most expensive segment particularly in LNG projects, which require large turbines and specialized expertise.

It also explains why some assets can be repaired within months (such as refineries with local maintenance teams), while others like complex LNG liquefaction units may take years.

Who Will Actually Pay?

1. Governments and National Oil Companies

Most oil and gas facilities in the Gulf are state-owned or operated by national companies such as QatarEnergy, ADNOC, and Saudi Aramco.

Given that most insurance policies exclude acts of war, governments and national companies will likely bear a significant share of repair costs through their budgets or sovereign reserves.

A report by Fitch Ratings notes that most property damage and business interruption policies exclude war-related events. As a result, claims related to energy infrastructure damage are expected to be limited.

In simpler terms, the burden on global insurers will not primarily stem from property insurance, but rather from sectors such as marine and aviation. Fixed infrastructure losses will largely go uncompensated, forcing governments to directly finance repairs potentially straining budgets and delaying other projects.

2. Insurance Companies and Coverage Limits

Marine protection and indemnity (P&I) clubs including Gard, Skuld, NorthStandard, London P&I, and the American Club announced the cancellation of war risk coverage in Iranian and Gulf waters starting March 5.

Japan’s MS&AD group also suspended issuing war risk policies in the region. Moreover, transit through the Strait of Hormuz now requires mandatory war insurance through Lloyd’s of London.

Fitch reports that marine insurance premiums have surged to 20 times normal levels. Compensation for a single incident can reach several hundred million dollars, with a cap of $500 million per event.

These figures make clear that marine insurance covers ships and cargo not land-based facilities. Coverage for fixed infrastructure against war is virtually nonexistent.

3. External Financing and Contractor Challenges

To mitigate shipping risks, the U.S. International Development Finance Corporation (DFC) launched a $20 billion maritime reinsurance program, led by Chubb, to cover vessel and cargo losses transiting Hormuz.

However, the program focuses on trade flows not on rebuilding refineries or gas plants leaving Gulf states to shoulder most of the burden.

An additional challenge lies not just in financing, but in the availability of contractors and equipment. Security concerns have prompted some international engineering firms to withdraw, while the production of large gas turbines is concentrated among a limited number of suppliers, potentially extending delivery timelines.

Will the Gulf’s Investment Map Change?

1. Delayed Expansion and Reprioritization

The war has already reshaped Gulf priorities. Before the crisis, Qatar, Saudi Arabia, and the UAE had announced plans to expand LNG and petrochemical capacity.

However, the repair bill may delay some expansion projects, redirecting spending toward reconstruction and rehabilitation.

Rystad Energy expects repair spending to take precedence over new growth projects, with engineering service firms shifting focus from developing new fields to maintaining damaged assets.

Meanwhile, global oilfield service companies caution that higher profits driven by rising prices will not necessarily translate into increased investment, as firms typically require five to seven years of price stability before approving new projects.

2. Fortification and Logistical Resilience

Beyond repairs, the war is pushing governments to invest more in fortification and resilience. The targeting of export terminals and refineries has exposed vulnerabilities in key chokepoints such as the Strait of Hormuz and ports in Bahrain and Qatar.

Countries are expected to allocate more resources toward air defense systems around critical infrastructure, building alternative storage facilities, and developing pipelines that bypass high-risk areas.

There may also be greater emphasis on energy efficiency and supply chain redesign to enhance resilience during disruptions. These investments are as crucial as reconstruction, as they reduce the likelihood of similar losses in the future.

3. Revisiting Long-Term Economic Visions

Finally, there is a deeper dimension tied to long-term economic visions. Countries such as Saudi Arabia, Qatar, and the UAE have spent years pursuing diversification strategies away from oil.

However, the high cost of war may strain the resources available to fund such initiatives particularly in countries with more limited financial reserves, such as Bahrain.

Fitch’s decision to place Qatar on negative watch due to damage at Ras Laffan suggests that physical losses can translate into sovereign credit risks, potentially affecting borrowing costs for long-term development projects.

While higher oil prices provide additional revenues, war tends to make investors more cautious, forcing governments to allocate a larger share of income toward security and repairs rather than launching new ventures.

As the United States and Israel struggle to decisively win their war against Iran or bring down its regime, new ideas have begun circulating within the U.S. administration chief among them, the seizure of Iran’s enriched uranium and its removal from the country.

This proposal has surfaced through remarks by American officials and media leaks, framed as part of potential conditions to end the war. Yet it raises difficult questions: Is this merely leverage to push Iran toward renewed negotiations, or a genuine military option targeting the nuclear material itself?

Key Leaks on “Extracting” Uranium

Discussions around seizing Iran’s enriched uranium and transferring it abroad have emerged through several U.S. leaks:

The Wall Street Journal reported in late March, citing American officials, that President Donald Trump is considering a military operation to extract 1,000 pounds (approximately 454 kg) of Iran’s enriched uranium. No final decision has been made.

Officials noted that Trump is weighing risks to U.S. forces but remains broadly open to the idea, as it could help achieve his primary objective: preventing Iran from acquiring a nuclear weapon.

Bloomberg reported earlier in the month, citing three diplomatic sources, that the Trump administration is considering deploying special forces on the ground to seize Iran’s stockpile of highly enriched uranium, given the lack of viable military alternatives. Bombing facilities alone would not suffice if the nuclear material remains intact.

The Washington Post revealed details of a leaked 15-point plan to end the war, including sweeping sanctions relief for Iran in exchange for removing all enriched uranium, dismantling enrichment-processing capabilities, imposing restrictions on Tehran’s ballistic missile program, and halting support for armed groups in the region.

Reuters, citing three sources within the Israeli cabinet, reported that the proposal was conveyed to Iran via Pakistan and includes the removal of Iran’s highly enriched uranium stockpile.

Despite these reports, Prime Minister Benjamin Netanyahu stated at a press conference, 20 days into the war, that Iran was no longer capable of enriching uranium or producing missiles though he provided no evidence.

In contrast, International Atomic Energy Agency (IAEA) Director General Rafael Grossi said that “much of Iran’s nuclear capacity has survived” the attacks, and that the country still retains the knowledge and industrial capability to enrich uranium.

What Do We Know About Iran’s Stockpile?

To understand the current complexity surrounding Iran’s uranium stockpile, one must return to the last verified IAEA assessment before the major strikes on nuclear sites in June 2025.

Prior to the 12-day confrontation, the IAEA estimated that Iran possessed 9,874.9 kg of enriched uranium at various levels, including 440.9 kg enriched up to 60% a level close to weapons-grade. Most of this stockpile was in the form of uranium hexafluoride (UF₆), stored in large steel cylinders.

The report indicated that uranium enriched to 20% and 60% was stored in an underground tunnel complex in Isfahan. The agency observed regular vehicle movement near the tunnel entrance but was not granted access. Following the attacks, the IAEA withdrew and has since been unable to verify the stockpile.

A March 2026 report by the agency’s director confirmed that Iran continues to allow access to undamaged facilities but has denied inspections of bombed sites and the materials within them.

He added that the agency “has not had access to declared stockpiles of low- and high-enriched uranium for more than eight months,” leaving it unable to confirm whether enrichment activities have ceased or whether the stockpile remains intact.

Despite this ambiguity, Grossi stated on March 9, 2026, that most of the uranium enriched to 60%—just over 200 kg—was not destroyed. He noted that these quantities are still located in the Isfahan complex, which did not sustain significant damage, while another portion exists at the Natanz facility, some of which may have been destroyed.

Another Reuters report, citing intelligence sources, indicated that the Isfahan stockpile was stored in tunnels beneath a mountain. Airstrikes may have caused tunnel entrances to collapse, but the steel cylinders likely remained intact explaining Washington’s insistence on removing the material rather than bombing it, as destroying facilities does not eliminate the material itself.

Meanwhile, some U.S. military officials believe Iran may have concealed part of the stockpile in undisclosed locations prior to the attacks.

Why Is This Among the Most Dangerous Military Operations?

Destroying or extracting enriched uranium differs fundamentally from bombing a nuclear facility. The former targets hazardous chemical material stored in sealed cylinders deep underground, while the latter targets infrastructure.

According to a CBS report, UF₆ cylinders contain a substance that turns into toxic gas upon contact with air, meaning a direct strike could cause widespread contamination.

If a foreign power seeks to extract rather than destroy the stockpile, the operation would require multiple complex stages:

1. Reaching the Site:
The Isfahan complex is located in a fortified mountainous area under heavy guard. Military experts cited by CBS suggest that special forces would need to infiltrate or storm the site after neutralizing surface defenses potentially requiring heavy engineering equipment to clear debris and reinforced concrete.

2. Securing the Material:
Once inside, forces must prevent any Iranian attempt to recover or destroy the stockpile. This would require a broad military perimeter and air support to deter missile or drone attacks. Experts estimate that more than 1,000 troops could be needed for security and operational support.

3. Packaging and Transport:
UF₆ cylinders weigh hundreds of kilograms and require specialized equipment for handling and secure transport. For comparison, during Project Sapphire in 1994, the U.S. extracted 600 kg of highly enriched uranium from Kazakhstan in a peacetime mission that took weeks of planning and involved heavy transport aircraft and coordination with Moscow.

Wartime conditions and the possibility of booby-trapped tunnels would make such an operation far more complex.

4. Extraction from Iran:
Even after loading the material, exfiltration poses the greatest risk. CBS reports that once the element of surprise is lost, extraction teams become prime targets. Aircraft or ground convoys would have to traverse long distances under threat from Iranian missiles and drones.

An analysis by the Center for Strategic and International Studies (CSIS) adds further requirements for success, including:

• Precise identification of stockpile locations

• Full air superiority to protect transport aircraft

• Prior coordination with the IAEA for handling nuclear material

• Deployment of hundreds, possibly thousands, of personnel

• Complete control over Iranian airspace and air defenses

The center also warns of chemical risks: uranium hexafluoride can decompose into highly toxic hydrogen fluoride (HF) gas if exposed to air, meaning any accidental explosion could trigger an environmental and public health disaster.

For these reasons, some analysts believe that the threat of seizing enriched uranium may serve primarily as leverage to push Iran toward a deal involving the supervised transfer of its stockpile or its dilution to lower enrichment levels.

Since the outbreak of the U.S.–Israeli war against Iran, the phrase “reopening the Strait of Hormuz” has become a daily refrain, underscoring Washington’s inability to resolve a crisis affecting one of the world’s most critical maritime corridors.

In theory, the U.S. Navy commands the largest naval force in the world, with ships and aircraft deployed across the Gulf, the Red Sea, and the Mediterranean. Yet the reality on the ground suggests that this superiority does not necessarily translate into a rapid restoration of commercial shipping through the Strait of Hormuz.

The equation is not merely about the presence of aircraft carriers and destroyers. It hinges on persuading shipping companies, insurers, and maritime crews that risks have become acceptable and ensuring that the daily passage of dozens of tankers does not trigger another catastrophe that could drive oil prices to record highs.

How Large Is U.S. Naval Power, Really?

The U.S. Navy operates 292 warships and logistical vessels within what is known as the battle force, including 233 combat ships and 59 support vessels.

This fleet includes 11 nuclear-powered aircraft carriers 10 of the Nimitz class and one of the Gerald R. Ford class. Each carrier carries around 60 aircraft capable of launching hundreds of strikes per day.

American submarines form the backbone of nuclear deterrence. The fleet includes 14 Ohio-class ballistic missile submarines armed with Trident nuclear missiles, four converted Ohio-class submarines capable of launching 154 Tomahawk missiles each, and 48 attack submarines from the Virginia and Los Angeles classes, among others.

The surface fleet comprises roughly 90 destroyers and cruisers equipped with air and missile defense systems and land-strike capabilities, alongside smaller vessels such as frigates, coastal patrol ships, and landing craft.

In the Middle East, deployments have surged since January 2026. An analysis by the Center for Strategic and International Studies (CSIS) in Washington noted that the U.S. Navy had assembled:

• Two aircraft carriers, 13 cruisers and destroyers, and three smaller vessels the largest regional deployment since the 2003 Iraq War.

• With the arrival of the USS Gerald R. Ford in mid-February, the total rose to around 20 ships in or near the region more than 40% of U.S. naval assets ready for operations.

• Following the launch of attacks on Iran, Washington dispatched the USS Abraham Lincoln and three destroyers to the Gulf, followed by the Gerald R. Ford and three additional destroyers, bringing the total to 16 vessels, including two carriers, alongside more than 100 fighter jets (F-35, F-22, and F-15).

These forces are supported by forward bases in Bahrain, Qatar, and Djibouti, as well as early warning aircraft and air defense systems such as Patriot and THAAD deployed across the Gulf.

Why Isn’t This Force Enough to Reopen Hormuz Easily?

1. Gradual Deterrence

Despite the massive U.S. naval presence, deploying warships alone appears insufficient to restore commercial navigation—even without Iran resorting to widespread mine-laying or declaring a formal blockade.

Tehran appears to rely on what could be described as a “gradual deterrence” strategy: limited drone and missile strikes against oil tankers and commercial vessels just enough to raise risk levels and disrupt commercial decision-making, without requiring a full, declared closure of the strait.

This approach has proven highly effective. According to an analysis by the UK-based Royal United Services Institute (RUSI), maritime traffic has dropped by 90%, while Iranian and affiliated vessels account for roughly 60% of the remaining movement.

Control of the strait, therefore, is no longer determined solely by who possesses superior military power, but by who can impose an environment of fear that forces much of the market to withdraw.

2. Multiple Threat Vectors

The military challenge lies in the diversity of Iranian threats: drones, missiles, and naval mines, all of which strain U.S. defensive capabilities.

Iran is believed to be capable of producing around 10,000 drones per month and possesses a stockpile of between 2,500 and 6,000 missiles, in addition to 5,000–6,000 naval mines that could be deployed in the strait.

These mines vary between bottom, drifting, and rocket-propelled types. Experts warn that clearing even a portion of them could take months, turning any effort to secure navigation into a prolonged and complex operation rather than a swift military task.

3. High Operational Costs

The problem is compounded by the fact that even the most advanced U.S. destroyer cannot perform all missions simultaneously. A Reuters analysis noted that protecting a single convoy may require around 12 major warships, supported by fighter jets, drones, and helicopters.

A single vessel may intercept missiles but cannot simultaneously clear mines, counter armed boats, and defend against swarms of drones. As a result, theoretical military superiority becomes a heavy operational burden when tasked with securing a narrow and congested waterway like Hormuz.

4. Harsh Geography

The challenge is not just about weaponry, but also geography. The strait, approximately 30 kilometers wide, places large U.S. vessels in a confined space exposed to simultaneous threats, making destroyers highly vulnerable targets.

Even in the absence of evidence of large-scale mine deployment with reports indicating only about ten mines laid as of March 25 the greater risk lies in Iran’s ability to use limited tools to produce a disproportionate impact on shipping decisions.

What Does It Cost to Secure Hormuz?

The cost of “reopening Hormuz” is enormous. Restoring navigation is not simply a matter of deploying more naval assets it also requires reducing risk levels that have driven insurance premiums from around 0.25% before the war to as high as 3% in some cases equivalent to $7.5 million to insure a $250 million tanker.

Major insurers estimate that around 1,000 vessels in the Gulf, worth a combined $25 billion, require separate war-risk coverage. Many have anchored outside the strait, placing the transport of roughly 20 million barrels of oil per day at risk.

Even efforts to reassure the market have fallen short. Despite U.S. insurer Chubb announcing a $20 billion government-backed reinsurance program to enable vessel transit, shipping companies have remained reluctant—highlighting that the issue is not purely financial, but fundamentally security-driven.

The Red Sea offers a cautionary lesson:

• The United States and its partners have spent over $1 billion in operations against the Houthis since 2023.

• Hundreds of drones have been intercepted, yet four ships have been sunk, and most commercial shipping continues to avoid the Bab al-Mandab Strait.

Military escorts alone, therefore, do not automatically restore commercial traffic or reduce insurance premiums as long as core risks persist.

In Hormuz, the challenge is even greater. The risk zone is five times larger than Bab al-Mandab, and the Iranian adversary is more experienced and better armed.

Operational Constraints

The United States also lacks abundant mine-clearing assets in the Gulf:

• Avenger-class mine countermeasure ships were withdrawn from Bahrain and replaced with littoral combat ships adaptable for mine warfare, though two were under maintenance in Singapore as of March.

• A U.S. official acknowledged that the Navy “does not have many options,” with current capabilities limited to four mine countermeasure vessels, unmanned surface vehicles, helicopters, and divers.

Meanwhile, Iran’s Islamic Revolutionary Guard Corps operates fast boats, drones, and anti-ship missiles such as Noor and Qader, deployed from caves and mountainous terrain overlooking the strait.

This imbalance does not imply Iranian naval superiority, but rather highlights the high cost and complexity of neutralizing its dispersed coastal capabilities—particularly in a narrow and strategically vital corridor like Hormuz.

It also explains Washington’s reluctance to act unilaterally and its calls for allies to participate in reopening the strait.

Sending additional ships not only raises financial costs but also increases the risk of human losses. The loss of a single destroyer could mean the deaths of around 300 sailors—an outcome that would significantly affect U.S. public opinion. Moreover, concentrating forces in the Gulf exposes other theaters in the Pacific and Europe.

For this reason, RUSI experts argue that the most realistic path to restoring safe navigation lies not in military power alone, but in a political settlement with Iran that persuades it to halt attacks.

In his book The Quest: Energy, Security, and the Remaking of the Modern World, energy expert and historian Daniel Yergin reflects on a central paradox of global energy trade: “As energy trade becomes more global, crosses more borders, and expands across land and sea, the security of supply chains becomes more urgent. Ensuring that security requires greater cooperation between producers and consumers.

Strategic chokepoints along maritime routes create vulnerabilities for the transport of oil and liquefied natural gas whether from accidents, terrorist attacks, or military conflict. The most prominent of these vulnerabilities is the Strait of Hormuz.”

Published in 2011, the book predates the current crisis. Yet at a conference on artificial intelligence held on March 23 of this year, Yergin pivoted sharply to energy, dispensing with euphemism. With the strait effectively closed, he declared: “We are witnessing the largest disruption in the global oil sector in history. Nothing of this scale has ever happened before.”

Yergin’s remarks sought to place the present crisis in proper context even when compared with the 1973 oil embargo and the 1979 Iranian Revolution, both of which reshaped the global energy map. Neither, however, involved the outright closure of the world’s most critical strategic waterway, halting the passage of some 16 million barrels of crude oil per day.

Despite the bleak outlook, Yergin pointed to a glimmer of hope: “This crisis is unfolding in a world where the global oil and gas system is more resilient and diversified than it has been in decades. Among the structural differences is that the United States is now the world’s largest oil producer, and Saudi Arabia operates overland pipelines that transport crude to export terminals on the Red Sea, bypassing the strait entirely.”

Yanbu: The Unexpected Surge

Yergin’s observation highlights a maneuver Saudi Arabia has employed since the outbreak of war—one many believe could reshape the future of Saudi oil exports away from Iran’s control over the Strait of Hormuz. On March 4, just days after hostilities began, Saudi Aramco confirmed reports that it had adjusted crude shipping operations by temporarily rerouting volumes to Yanbu port to avoid the strait.

In its coverage, Asharq Al-Awsat noted that this move was made possible by the advanced infrastructure of the East-West pipeline (Petroline), which links oil fields in the Eastern Province to Yanbu on the Red Sea coast. Stretching 1,200 kilometers with a capacity of up to 5 million barrels per day, the pipeline serves as a strategic alternative outlet, granting Riyadh logistical flexibility to manage exports away from volatile maritime routes.

According to estimates by Vortexa, a firm specializing in tracking oil and gas trade, Yanbu’s capacity could theoretically expand to 7 million barrels per day. Since early March 2026, daily throughput has reached 4.5 million barrels far exceeding the previous monthly peak of 1.5 million barrels recorded in April 2020.

Yet these figures offset only part of the roughly 13.4 million barrels per day shortfall in crude exports from the Middle East and Africa pipeline system.

Following the closure of the Strait of Hormuz, Saudi Arabia moved swiftly to recalibrate its Red Sea strategy via Yanbu. It cut production by approximately 2 million barrels per day and redirected remaining output to the Red Sea port. Supertankers lined up to receive the diverted crude, and by March 18, shipments averaged around 4.2 million barrels per day.

However, the operation has not been without disruption. A drone strike on the SAMREF refinery at the port, alongside the interception of a ballistic missile reportedly in response to the bombing of Iran’s South Pars gas field underscored the fragility of the arrangement.

Indeed, this alternative strategic outlet appears far from insulated from regional instability. Iranian missile activity has disrupted loading operations, while the possibility of Yemen’s Houthi movement entering the conflict looms, despite its reportedly limited munitions.

Since the beginning of March, Yanbu has recorded an average loading rate of between 2.5 and 3 million barrels per day. Notably, peak loading reached 5.9 million barrels on March 9, according to the International Energy Agency (IEA). Meanwhile, average tanker revenues from the Red Sea to Asia have surged to their highest level in nearly six years, approaching $270,000 per day.

Yet this surge has been accompanied by skepticism. Aditya Saraswat, head of Middle East and North Africa research at Rystad Energy, cautions that “it remains unclear whether this situation can be sustained over the long term.” He is not alone in this assessment. To understand why, one must first examine the IEA’s broader outlook on global energy distribution.

Asia: The Hardest Hit—But Permanently?

The IEA’s report, issued on March 12, 2026, confirms that the world is currently experiencing the largest disruption in energy supply in history, surpassing even the crises of the 1970s echoing Yergin’s assessment.

One of the report’s most critical focal points is Asia, where the disruption could signal a long-term decline in Gulf energy dominance. With flows through the Strait of Hormuz sharply reduced since the war began, Saudi Arabia was forced to cut exports to Asia by 38.6% in March alone from 7.1 million barrels per day to 4.3 million. This represents a significant gap for a market historically reliant on Gulf oil for nearly 80% of its supply.

The IEA anticipates that the redrawing of supply routes will create a new reality in Asia. The share of Atlantic Basin and American producers is expected to grow, with refineries in China and India already turning more heavily toward oil from the United States, Brazil, Guyana, and West Africa. Although shipments from these regions can take over 40 days to reach Asia—raising freight costs—the shift appears unavoidable.

Compounding the issue is the quality of supply. Exports from Yanbu are limited to Arab Light crude, depriving Asian refineries of the medium and heavy grades for which many are configured. As a result, refiners have been forced to adjust their processing blends and increase reliance on alternative suppliers offering similar grades.

The Yanbu Gambit: Risks Outweigh the Promise

Energy researcher Andrew Logan argues that the expansion of the conflict is not the only threat to Saudi Arabia’s strategy. Even if shipments resume smoothly, it remains uncertain whether the kingdom possesses the technical capacity to fully sustain its export plan or whether shipping crews are willing to accept the heightened risks.

Logan points to a purely logistical challenge: how far can crude from Yanbu realistically reach? Saudi Arabia has allowed clients to receive April allocations via the port, but these volumes remain incomplete and constrained by pipeline capacity.

Further limitations stem from the narrow range of crude offered primarily Arab Light. Despite around 30 tankers anchored near the port as of March 16, traffic through the Suez Canal remains well below peak levels. With instability now spreading into the Red Sea, questions persist about whether tanker traffic can continue uninterrupted.

Shipping costs present another hurdle. According to Vortexa, the Yanbu-to-Asia route is currently the most expensive major VLCC (Very Large Crude Carrier) route on the market. Daily returns run into the hundreds of thousands of dollars, reflecting both vessel scarcity and elevated operational risks. For a VLCC with a 280,000-ton capacity, shipping from Yanbu costs $12 million more per voyage than from the US Gulf Coast and $17 million more than from West Asia.

Returning to Logan’s analysis, even under the most optimistic scenario where Iranian attacks cease and capacity increases the Red Sea pipeline would only marginally offset the deficit caused by the closure of the Strait of Hormuz.

In a worst-case scenario, further attacks by Iran or the Houthis could cripple the pipeline diversion system, which is already highly vulnerable. In 2019, Houthi attacks on Saudi Arabia’s Abqaiq facility a key node feeding the pipeline halted 5.7 million barrels per day of production.

Should the Houthis escalate and close the Bab el-Mandeb Strait, a new crisis would emerge: vessels bound for Asia would be forced to reroute via the Suez Canal, potentially adding weeks or even months to transit times.

Given these constraints, Saudi Arabia does not appear to view Yanbu as a genuine long-term substitute for the Strait of Hormuz. Rather, it is an emergency measure designed to mitigate losses.

Redirecting flows through the Red Sea is no silver bullet especially now that the route itself has become a potential target in the conflict. For Yanbu to evolve into a viable alternative, Saudi Arabia would not only need to push its infrastructure to the limit, but also ensure protection against attacks and convince maritime operators that its port is safe. As Logan suggests, that may prove to be more than a tall order.

For the first time in decades, the world finds itself facing a food shock preceding the oil crisis triggered by the U.S.–Israeli war on Iran. Fertilizers, gas, sulfur, and ammonia passing through the Strait of Hormuz form the backbone of global grain and vegetable production.

Urea prices a key chemical input used in fertilizer manufacturing have surged by more than 40 percent, exceeding $700 per ton. Insurance and shipping costs through the Gulf have increased tenfold, while fertilizer plants in Qatar, India, and Bangladesh have shut down.

This report traces the chain of effects in detail: from the bottleneck in Hormuz to fertilizers, chemicals, and gas, then to agricultural and production costs, and ultimately to food prices on Arab tables.

From Hormuz to Fertilizer

It is not only oil that flows through the Strait of Hormuz. The Gulf accounts for nearly 46 percent of global urea trade and supplies a quarter of the world’s fertilizer production.

With maritime disruption:

• Major urea plants in Qatar have halted operations.

• India has reduced production across three facilities.

• Bangladesh has shut four out of five plants.

• Egypt, which supplies around 8 percent of traded urea, may struggle to sustain output following the suspension of Israeli gas supplies.

Expected exports have dropped from 3.5 million to 1.5 million tons in March, while export prices have nearly doubled to $684–700 per ton.

The fertilizer industry relies heavily on natural gas, with energy accounting for up to 70 percent of production costs. Attacks on gas facilities such as the strike on Qatar’s Ras Laffan complex have driven European gas prices up by 35 percent, raising costs across global supply chains.

Sulfur prices an essential input in phosphate production—have also climbed above their 2022 peak, as the Middle East provides half of global supply. Meanwhile, shipping companies have issued warnings and suspended transit through the strait and Red Sea coasts.

Major shipping lines, including Maersk, Hapag-Lloyd, and CMA CGM, have imposed war risk surcharges on shipments bound for Iraq, Bahrain, Kuwait, Yemen, Qatar, Oman, the UAE, Saudi Arabia, Jordan, Sudan, and Egypt.

These fees could multiply the cost of transporting fertilizers and grains. Ship insurance premiums have risen to about 3 percent of vessel value (roughly $7.5 million for a $250 million tanker), compared to just 0.25 percent before the war. Current rates range between 1 and 1.5 percent depending on vessel type.

How a Fertilizer Crisis Becomes a Food Shock

Nitrogen and phosphate fertilizers are used to produce more than half of the world’s food and account for up to 50 percent of grain production costs. Any shortage therefore has immediate implications for food supply.

Bank of America has warned that the conflict threatens 65–70 percent of global urea supplies, with prices already up 30–40 percent.

The Food and Agriculture Organization (FAO) has cautioned that fertilizer shortages will reduce grain and feed production and, by extension, meat and dairy output. If the war persists, the next agricultural season could see lower yields.

At the farm level, rising costs are forcing farmers to reduce fertilizer use, switch to less nitrogen-intensive crops, or abandon marginal lands altogether.

The International Fertilizer Association expects the impact to be most pronounced in nitrogen-heavy crops such as wheat and corn. With fuel prices up more than 50 percent since the war began and shipping and insurance costs rising operational, transport, and storage expenses are all increasing, pushing up final food prices.

Even air freight has become more expensive: rates on South Asia–Europe routes have risen by 70 percent, and Asia–North America by 58 percent, due to Middle Eastern airspace closures and higher jet fuel costs.

Unlike oil, there are no strategic reserves for fertilizers, making shortages difficult to offset quickly. Even if other producers attempt to increase capacity, building new plants takes years and requires billions in investment.

Warnings have also resurfaced about replacing chemical fertilizers with organic alternatives. Sri Lanka’s 2021 experiment when the government banned chemical fertilizer imports demonstrated that yields can collapse dramatically, triggering economic and political crises.

Which Arab Countries Are Most Exposed?

Egypt, Tunisia, Morocco

Egypt, one of the world’s largest wheat importers, depends on imports for nearly 50 percent of its food consumption. It is also a major urea exporter (around 8 percent of global trade), but its production capacity is threatened by the halt in Israeli gas supplies, forcing it to turn to costly liquefied natural gas.

Cairo raised domestic fuel prices by 14–17 percent in March 2026 due to rising global energy prices, increasing the cost of food transport and subsidized bread production.

Tunisia, heavily reliant on grain imports and facing fiscal constraints, will see rising food subsidy costs especially if global wheat prices increase.

Morocco, the world’s largest phosphate exporter and a major producer of phosphate fertilizers, stands to benefit from higher global prices. However, it imports ammonia a key input meaning production costs will also rise. Analysts at Chatham House warn that higher global energy prices and interest rates will weigh on Morocco’s economy despite export gains.

Other North African Countries

Algeria and Libya, as oil and gas producers, may benefit from higher prices and offset budget losses.

However, disruptions in Hormuz could lead to shortages of chemical inputs particularly sulfur affecting domestic agricultural production.

Jordan, Lebanon, Syria

Jordan produces negligible amounts of gas, covering less than 5 percent of its needs domestically, while importing about 3.6 billion cubic meters annually from Israel, Egypt, and others.

The war has exposed the fragility of this dependence. In June 2025, Israel’s Energy Ministry indicated that most limited exports during the conflict went to Jordan, with only “small quantities” reaching Egypt.

Any prolonged disruption could threaten Jordan’s electricity supply and force it to purchase expensive LNG, increasing food prices through higher irrigation and storage costs.

Lebanon, which imports more than half of its food needs and 87 percent of its wheat, faces a severe foreign currency crisis. Rising fuel and shipping costs will increase import bills, while any slowdown in Gulf economies could reduce remittances—a key source of hard currency.

Reuters has warned that declining remittances from Gulf workers could pressure economies dependent on them, including Pakistan, Lebanon, and Jordan.

The Gulf, Yemen, and Sudan

Gulf states Saudi Arabia, Qatar, Oman, and the UAE are major producers of urea and ammonia. However, shipping disruptions through Hormuz hinder exports and reduce corporate profits, even as gas infrastructure remains under threat. Still, their sovereign wealth-backed economies can absorb the shock for now.

By contrast, countries such as Yemen, Sudan, and Djibouti which rely on imports via Gulf ports face potential fuel and food shortages as ships reroute around the Cape of Good Hope, increasing transit times and costs and creating bottlenecks.

What Are the Consequences?

History shows that rising fertilizer and food prices often lead to social and political unrest. In 2022, the Russia–Ukraine war drove up food and energy prices, worsening food insecurity in many countries.

Today’s crisis is more complex. Markets were already constrained by sanctions on Russia and Chinese fertilizer export restrictions, and the war on Iran has severed another critical artery.

Millions in the Gulf depend on desalination plants, which are energy-intensive. These plants supply 90 percent of drinking water in Kuwait, 86 percent in Oman, and 70 percent in Saudi Arabia. If gas and fuel supply disruptions persist, even access to fresh water could be at risk.

A report by the Council on Foreign Relations estimates that fertilizers account for about 25 percent of agricultural production costs and that the war threatens one-third of global fertilizer trade.

A 19 percent price surge in the Middle East within a single week highlights market fragility and suggests that the shock could extend across multiple seasons.

The report also warns of the potential “weaponization of food and water,” raising the specter of a global humanitarian crisis especially if compounded by climate-related agricultural disruptions and declining grain reserves.

Meanwhile, World Bank and IMF reports suggest that some countries, such as Morocco and Qatar, may benefit from rising fertilizer prices, and that targeted support for farmers through international channels could help mitigate the crisis.

However, long-term solutions require diversifying fertilizer sources beyond the Gulf and developing new infrastructure efforts that will take years and substantial investment. Until then, food security in the Arab world will remain hostage to the Strait of Hormuz and its geopolitical tensions.

March 2026 witnessed a development that unsettled Turkey’s energy market after an Israeli strike targeted facilities in the South Pars field the backbone of Iran’s gas system.

Bloomberg and other outlets reported that Iran had halted gas exports to Turkey via the Tabriz–Ankara pipeline, prompting Ankara to prepare to draw from its reserves to offset a shortfall estimated at around 14% of its imports. However, Turkey’s Energy Minister, Alparslan Bayraktar, responded that flows were continuing and that storage facilities were 71% full.

Accounts diverged between those confirming an actual disruption and others describing a brief “tremor” or a threat that never materialized. Yet this moment is not merely a test of energy supply; it also reflects how Turkey is reshaping its “gas basket” as a long-term energy contract with Iran approaches expiration.

The Weight of Iranian Gas in Turkey’s Energy System

A gas supply agreement between the National Iranian Oil Company (NIOC) and Turkey’s BOTAŞ allows for the delivery of 9.6 billion cubic meters annually, with the contract set to expire on July 31, 2026.

In recent years, however, Ankara has not drawn the full contracted volumes. Data from Turkey’s Energy Market Regulatory Authority (EPDK) indicate that Turkey imported 52.2 billion cubic meters of gas in 2024, of which 7.04 billion cubic meters came from Iran about 13.4%.

In 2025, imports rose slightly to 8.17 billion cubic meters, according to Iranian statistics, but Iran’s share remained between 13% and 14% of Turkey’s total gas imports. While significantly lower than Ankara’s reliance in the 1990s, Iranian gas still represents a vital artery for sensitive sectors.

Turkey’s total gas consumption reached 60–61 billion cubic meters in 2025, including 21.5 billion for households, 16–17 billion for power plants, and 14–15 billion for industry.

If the Tabriz–Ankara pipeline were to halt for weeks, the industrial sector and gas-fired power plants would be most exposed to contraction, while households could be shielded through flexible pricing mechanisms used by the government to mitigate market volatility.

The importance of this pipeline was evident in January 2022, when Iranian gas supplies were cut due to a “technical fault” at a compression station. Turkey was then forced to request a 40% reduction in electricity generation at power plants and to scale back industrial gas supplies.

At that time, dependence on Iran stood at around 16% of imports, storage capacity was only 3.2 billion cubic meters, and floating LNG units were not operating at full capacity.

Today’s situation whether a short disruption or a serious threat is more of a political and security test than a technical malfunction.

It also comes at a time when storage capacity has expanded to 6.3 billion cubic meters, LNG regasification capacity has increased to 161 million cubic meters per day, and domestic gas production has begun making Turkey less vulnerable and more resilient.

How Turkey Is Building Shock Absorption Capacity

1. Underground Storage

Turkey operates two main gas storage facilities: the Silivri site on the Sea of Marmara and salt caverns in Tuz Gölü (Lake Tuz) in Aksaray, central Anatolia.

The Silivri facility has been expanded to 4.6 billion cubic meters, with a daily withdrawal capacity of 75 million cubic meters.

The Tuz Gölü caverns can store about 1.2 billion cubic meters, bringing total capacity to roughly 6.3 billion cubic meters by the end of 2025.

Official reports confirmed that these facilities were 71% full in March 2026—around 4.5 billion cubic meters.

However, with daily consumption nearing 230 million cubic meters, these reserves would cover only a few weeks if used alone.

2. Liquefied Natural Gas (LNG)

One pillar of Turkey’s strategy is LNG. The country operates three floating storage and regasification units (FSRUs) and three onshore terminals, giving it a daily regasification capacity of 151 million cubic meters targeted to reach 200 million.

The floating unit Ertuğrul Gazi in Hatay on the Mediterranean can inject 28 million cubic meters per day into the grid. Plans are underway to add a second unit of similar capacity, doubling output.

Another project envisions building an additional FSRU on the Mediterranean coast with a capacity of 28 million cubic meters per day, meaning that three major units could meet more than half of daily demand.

On the contracting front, BOTAŞ has signed a series of short- and long-term agreements since 2024 with Oman, Algeria’s Sonatrach, ExxonMobil, Shell, TotalEnergies, and others. These deals total about 15.8 billion cubic meters annually and could rise to 25 billion by 2027.

Unlike the Iranian contract, these agreements are indexed to gas benchmarks such as Europe’s TTF or the U.S. Henry Hub, giving Ankara greater pricing flexibility.

3. Domestic Production from the Black Sea

The launch of the Sakarya gas field in 2023 marked a turning point. By April 2025, output reached 9.5 million cubic meters per day around 3.5 billion cubic meters annually enough to supply four million households.

In January 2026, the energy minister announced that production would double within the year, meeting the needs of eight million homes. By 2028, output is expected to reach 40 million cubic meters per day, covering roughly 30% of national demand.

While not an immediate solution to a March 2026 disruption, this development will significantly reduce Turkey’s dependence on Iranian and Russian imports in the coming years.

4. Russia, Azerbaijan, and Turkmenistan

Russian gas remains the backbone of Turkey’s supply, with imports reaching 21.16 billion cubic meters in 2025. Contracts for the Blue Stream and TurkStream pipelines have been extended for one year through the end of 2026 to allow negotiation flexibility.

Azerbaijani gas arrives via the TANAP pipeline, supplying about 10 billion cubic meters annually. While expansion is under discussion, it requires time and investment.

Turkmen gas, delivered through a swap arrangement involving Iran and Azerbaijan, amounts to roughly 2 billion cubic meters annually insufficient as a standalone alternative if disruptions occur within Iran’s network.

Scenarios of Disruption and Their Impact

If the March 2026 incident proves to be a brief disturbance in the Tabriz–Ankara pipeline, Turkey’s energy system can compensate through limited storage withdrawals and increased LNG imports.

If the pipeline were to halt entirely for several weeks, Turkey would rely on its 4.5 billion cubic meters of stored gas, using only enough to offset the missing Iranian volumes (around 8–9 billion cubic meters annually). This could sustain supply for roughly five to six weeks, assuming reserves are not diverted elsewhere.

A disruption lasting months considered unlikely by officials and experts would fundamentally alter the equation. Ankara would need to deploy a full mix of tools: drawing down reserves, maximizing LNG imports up to 200 million cubic meters per day, increasing reliance on Russia, and accelerating production from Sakarya.

The exposure of the Tabriz–Ankara pipeline comes just months before the Iranian contract expires, but the availability of alternatives gives Ankara unprecedented negotiating leverage.

First, Turkey now possesses substantial LNG import and regasification capacity, along with growing domestic production, providing greater room for maneuver.

Second, newer contracts have shifted from oil-indexed pricing to gas-based benchmarks, while the Iranian contract remains tied to Brent crude and long-term formulas making Iranian gas comparatively more expensive.

Nevertheless, other considerations may prevent Turkey from fully abandoning the pipeline. Geographically, Iranian gas remains the closest source, directly supplying eastern Anatolia and reducing transportation costs compared to LNG delivered via coastal terminals.

Moreover, increased output from Sakarya and additional Russian or Azerbaijani imports may not fully meet peak winter demand during cold spells.

As a result, Turkey may seek to reduce contracted volumes, convert the agreement into a seasonal arrangement, or demand more flexible pricing terms. Ankara could also leverage its political rapprochement with Tehran to negotiate larger volumes of Turkmen gas transiting through Iran.

For years, the Gaza Strip has endured a suffocating blockade and repeated closures of its crossings by Israeli authorities conditions that have profoundly strained the economy and driven up poverty and unemployment among young people. Despite scarce opportunities and an unstable labor market, many graduates have sought a foothold through short-term contracts or part-time work, while a small minority secured more stable positions though these remained limited.

But the war that erupted on October 7, 2023, pushed an already fragile economy into a far harsher phase. Widespread destruction of productive sectors and the loss of income for thousands of workers have drastically reduced opportunities. The question is no longer how young people can find suitable employment, but how they can secure any source of income that guarantees the bare minimum for survival in an economy staggering under the weight of war.

A Fragile Labor Market Before the War… Total Collapse After

Mahmoud Mansour (26), a computer engineering graduate from the Islamic University, was displaced with his family from Jabalia refugee camp to the Al-Nasr neighborhood after their home was destroyed. Describing the labor market before the war, he says: “Finding work in Gaza was already difficult and complicated but with the onset of the war, the problem multiplied many times over.”

Speaking to Noon Post, Mahmoud continues: “As a computer engineering graduate, I once envisioned my professional future working as an engineer in a government office or a major company. But the scarcity of opportunities forced me early on to work outside my field. I became a sports media presenter at a radio station and for Namaa Sports Club.”

When the war began, everything Mahmoud had built collapsed at once. “The club and the radio station were destroyed in the early months of the war, and their owners were killed,” he says, explaining that his professional life came to a complete halt not only because he lost his job, but also because of the overwhelming sense that death had become more imminent than any plans for the future.

As the war dragged on and the illusion of it being short-lived faded, Mahmoud’s perception of reality shifted dramatically. He no longer asks himself what he wants to become, but how he can endure. “We now face life not to achieve our dreams,” he says with sorrow, “but to secure a livelihood that preserves our dignity and spares us from asking for help.”

Mahmoud was eventually forced to take on a range of different jobs working on filming reports and documentaries capturing the devastating reality in Gaza, and participating in a water desalination project. But that work abruptly ended due to a lack of funding, leaving him unemployed once again. He later found a job in accounting at a newly opened cafe despite having never studied accounting.

He concludes bitterly: “We live in a state of job insecurity. We could lose our work at any moment, and the income barely covers basic needs.” Between exhausting labor and meager returns, Mahmoud sees temporary work no longer as an option, but as the norm in Gaza while waiting for a reality that may one day offer stability.

Chasing Stability in a Volatile Labor Market

Suha Sukkar (28), a media graduate from Al-Azhar University, shares a similar story. Displaced with her family from Shuja’iyya to the Saraya area, she had worked on temporary contracts within her field. Her most recent nine-month contract with a local media organization had offered a rare opportunity for relative stability until the war upended everything.

The shutdown of most institutions after the war broke out placed Suha, like many others, in an even more difficult professional reality, pushing her to search for any available job. “I’ve been forced to work in any field I can find to avoid being unemployed,” she tells Noon Post.

She describes her journey in search of job stability since graduation as arduous akin to “chasing a mirage.” With limited opportunities, many young people find themselves compelled to accept temporary work or jobs far removed from their ambitions, simply to maintain an income that allows them to continue living.

Along the way, Suha has moved between various roles, leveraging her media background in digital storytelling while also working outside her specialization facilitating psychosocial support sessions and participating in relief efforts.

Working under wartime conditions, however, has been anything but easy. Daily challenges, she says, begin with the basics of life: “Every day brought a new obstacle whether it was transportation difficulties or power and internet outages at home, which forced me to search for places with connectivity to submit my work, in addition to the dangers of moving around.”

Suha admits to feeling exhausted due to a lack of recognition. “I put in a great deal of effort but don’t receive adequate moral or financial appreciation,” she says, noting that some of her work has gone unpaid. Still, she refuses to give up, hoping that the days ahead may offer the stability she—and many of Gaza’s youth—have long awaited.

Psychological Pressures Beyond Endurance

Aya Al-Muqayyad, a psychology specialist, explains that constant job changes create a sense of disorientation and loss, increasing psychological pressure in the absence of professional stability. Many are pushed into jobs they neither enjoy nor identify with, leading to a profound sense of lost professional identity.

She notes that this disconnect can manifest as internal psychological conflict, particularly when individuals are forced to accept jobs that do not match their abilities simply to meet basic needs. The ongoing absence of job security also affects family relationships, heightening tension and irritability while reinforcing feelings of helplessness at a time when people most need stability and reassurance.

Al-Muqayyad also links this reality to what she describes as “engineered starvation” caused by Israel during the war. The middle class has shrunk, while the gap has widened between a small minority with resources and a majority increasingly dependent on aid a dynamic that continues to cast a long shadow.

She adds that these transformations have reshaped young people’s awareness and aspirations. Some have turned toward temporary initiatives or quick-income opportunities instead of investing in skill development or building sustainable projects contributing to a decline in productivity and a rise in consumerist tendencies, driven by fear of losing any new venture.

Al-Muqayyad emphasizes the importance of supporting youth both psychologically and professionally by providing safe spaces for expression, counseling programs, and training to help them develop skills and realign their ambitions toward realistic paths, enabling them to adapt without losing their professional identity.

A War Economy Reshaping the Labor Market

In the same context, economist Ahmed Abu Al-Qamar, a board member of the Gaza Economists Syndicate, says the war has triggered deep structural changes in the labor market following widespread destruction across economic sectors. According to the Palestinian Central Bureau of Statistics, the industrial sector has lost more than 80% of its facilities, while approximately 95% of agricultural land has been destroyed leading to widespread paralysis in productive sectors.

Abu Al-Qamar adds that remote work once a viable option under blockade has been severely disrupted by electricity and internet outages. Although some workers have attempted to gradually resume their jobs, recovery remains difficult amid job losses and worsening conditions.

He notes that unemployment has exceeded 80%, according to UNCTAD, while 95% of the population now relies on aid, according to UNRWA statistics reflecting a shift toward a survival economy imposed by war. He adds that the war has created new professions, some temporary and others likely to persist, such as electronic payment services, while others—like selling firewood—are tied to the crisis and may disappear once conditions improve.

Abu Al-Qamar explains that the collapse of productive sectors has pushed the economy from a structured system into a survival economy. This pattern, he suggests, could recede with the reopening of crossings and the entry of raw materials allowing factories to resume operations, reviving agriculture and livestock farming, and stimulating service sectors.

He concludes that stabilizing the labor market requires a stable political environment, the full reopening of crossings, enabling exports, strengthening vocational education to match market needs, and expanding remote work opportunities measures that could help reduce unemployment and mitigate the effects of the blockade.

Caught between economic analyses and mounting psychological pressures, Gaza’s youth remain trapped between a reality that forces them into a daily struggle for survival and deferred dreams of stable employment that might one day restore a measure of long-awaited security.

The US-Israeli war on Iran is entering its most dangerous and sensitive phase, as it shifts into direct contact with the global economy through the energy market and oil supplies passing via the Strait of Hormuz. From the earliest days of the assault, maritime traffic in the strait has faced mounting disruptions at a geographic chokepoint through which roughly one-fifth of global oil consumption and its derivatives flows making any disturbance there immediately felt across international markets.

As tensions move toward maritime geography, the logic of confining the crisis to a single chokepoint is giving way to a broader and more complex escalation path. The triangle formed by Kharg Island, the Strait of Hormuz, and Bab al-Mandab is emerging as a connected theater of conflict, where military considerations intersect with energy and trade calculations.

This places the war within an expanded regional framework, reshaping the map of engagement across the Middle East.

Within this shift, a new escalation trajectory is emerging one that extends beyond direct military strikes to target the arteries of global trade. As pressure mounts on the Strait of Hormuz, control over shipping lanes and oil flows is becoming a central tool in managing the confrontation.

Transport routes are thus turning into multifaceted battlefields, blending the legacy of the “Tanker War” with what might now be called a “War of Straits,” amid stalled military resolution options and the absence of a political horizon capable of containing the conflict before it penetrates deeper into the global economy.

The Strait of Hormuz: A Detonator or a Gateway to Resolution?

The Strait of Hormuz remains one of the world’s most critical energy corridors, channeling oil and gas flows from the Gulf to international markets. It is a central node in global trade, handling approximately 11% of total global trade volume, over a quarter of seaborne oil trade, and nearly one-fifth of global oil consumption equivalent to around 20 million barrels per day alongside roughly 20% of global liquefied natural gas trade, according to US Energy Information Administration data for 2024 and early 2025.

Historically, the strait has been closely tied to major regional conflicts, evolving since the 1980s into a space where regional and international interests converge and a strategic pressure point in global energy equations.

With the outbreak of war on Iran, the strait has once again become a focal point of tension. The navigation crisis effectively began with warnings issued by the Islamic Revolutionary Guard Corps to commercial vessels, alongside restrictions on some ships, leading to a noticeable decline in transit activity and driving shipping and insurance costs to unprecedented levels.

In this context, Iran treats the Strait of Hormuz as one of its most critical strategic assets—not merely as a waterway, but as a tool for managing conflict and reshaping its costs. Iranian doctrine is based on “flexible control” of maritime traffic, avoiding a full closure while disrupting flows and sustaining uncertainty in energy markets.

This approach allows Tehran to convert any escalation against it into direct pressure on the global economy, expanding the battlefield beyond a narrow military dimension into a broad international economic arena.

To reinforce this equation, Iran has developed an asymmetric deterrence system designed to complicate any attempt to forcibly reopen the strait without its consent. This system includes fast-attack craft operating in swarm tactics, low-cost yet high-impact naval mines, coastal anti-ship missiles, and surveillance and strike drones.

The aim is to transform the strait into a complex and hazardous operational environment that is difficult to fully secure, raising the cost of military intervention to potentially prohibitive levels.

Rather than seeking conventional naval superiority, this approach focuses on disorienting and exhausting the adversary by targeting vulnerabilities in ships and maritime systems whether by damaging critical infrastructure or disrupting command-and-control systems sufficient to disable vessels without necessarily sinking them. This reflects a doctrine of “maximum impact at minimal cost.”

At the same time, Iran maintains a calibrated international narrative that the strait remains “open,” while linking its stability to the broader context of the war. It frames any disruption to navigation as a direct consequence of what it describes as US and Israeli aggression.

Through a policy of “edge maneuvering,” Tehran balances gradual escalation with avoiding a declared full closure, keeping the strait as a calibrated pressure tool to impose new political and security equations while attempting to delay reaching a point of no return, unless existential threats emerge.

Limited US Options

In contrast to Iran’s flexible-control doctrine, the US approach appears marked by hesitation and inconsistency in defining both objectives and the trajectory of the war. Despite US President Donald Trump’s assertion that joint US-Israeli strikes have neutralized Iran’s naval capabilities, this assessment overlooks the essence of Iran’s strategy, which does not rely on conventional naval confrontation but on low-cost, high-impact tools capable of disrupting navigation without achieving naval superiority.

To overcome this dilemma, Washington has moved to internationalize the Strait of Hormuz crisis by pushing for a multinational maritime coalition. Trump explicitly stated that “countries will send warships in coordination with the United States to ensure the Strait of Hormuz remains open and secure,” indicating that states affected by Iranian restrictions on navigation would participate.

This reflects a US effort to share the burden of confrontation, strip it of its bilateral character, and confer international legitimacy on any potential military action in the vital corridor.

However, this approach quickly encountered its limits amid widening international divergences. Washington sought to draw in major powers such as China, Japan, South Korea, and European states given their reliance on energy flows through the strait but Beijing’s call for de-escalation and cessation of military operations underscored its reluctance to embrace a military approach. China reaffirmed that maritime stability depends on ending the war, not expanding it.

Simultaneously, under US pressure, a joint statement signed by 21 countries provided political cover for this approach, describing Iranian threats to navigation in the Strait of Hormuz as a threat to international peace and security, calling for an end to attacks and mine-laying operations, and affirming readiness to contribute to ensuring safe passage.

On the ground, the US has bolstered its military presence by deploying Marine units to the region, expanding its operational options while escalating political rhetoric. Trump has threatened to target Iranian energy facilities warning they would be “wiped out” if the strait is not reopened within a specified timeframe.

Yet this escalation combining military pressure with economic threats ultimately reflects a structural shortcoming in the US approach: an inability to effectively address the asymmetric nature of Iran’s strategy. Rather than imposing control over the strait, Washington appears caught between costly escalation and an internationalization strategy that has failed to generate genuine consensus granting Tehran greater room to wield the strait as a strategic lever tied to global economic interests.

What Does History Tell Us?

The current scenario evokes a recent historical parallel: the “Tanker War” of the 1980s during the Iran-Iraq War (1980–1988). Over four years, the Gulf became an open battlefield for targeting oil tankers, with nearly 200 vessels subjected to direct attacks using missiles and naval mines one of the most impactful phases of the conflict on global energy markets.

Both sides employed tactics similar to those seen today, from mining vital waterways to deploying anti-ship missiles such as Exocet and Silkworm, leading to a significant escalation in attacks on maritime traffic.

These developments ultimately prompted direct US intervention, including the deployment of dozens of naval vessels to escort tankers. Kuwaiti ships were even reflagged under the US flag to ensure protection. Although oil flows were not halted, they continued at significant human and material cost in a highly hazardous maritime environment.

Invoking this experience highlights the potential trajectory of the current conflict. While there are similarities in tools, today’s context differs in the scale of actors involved and the degree of global dependence on these routes making any disruption more impactful and complex.

A drift toward a prolonged, low-intensity war of attrition characterized by reciprocal strikes and partial disruption of navigation rather than full closure could recreate a long-term scenario that resists decisive military resolution. Such a dynamic would expand the scope of damage while giving Iran a relative advantage in leveraging its asymmetric tools to prolong the confrontation.

The tanker war experience suggests that using military force to impose the reopening of the strait does not necessarily resolve the crisis; rather, it may trigger a prolonged cycle of attrition that keeps energy markets under pressure and turns the Gulf into a persistent conflict zone.

Global Energy as a Weapon

The Strait of Hormuz stands at the center of Iran’s broader battle over the global economy and the use of energy as a strategic weapon. As tensions rise, signs of disruption are already evident. Maritime estimates This indicates the accumulation of hundreds of tankers in the Gulf waters, with many unable to depart due to heightened security risks illustrating the degree of congestion affecting one of the world’s most vital energy arteries.

This reality has directly impacted shipping and insurance markets. Insurers have moved to cancel or sharply increase war-risk premiums, while London’s marine insurance market has expanded high-risk zones to include most Gulf ports.

Meanwhile, oil tanker charter rates have surged dramatically: some have doubled in cost, and the Argus index for crude transport rose to around $10.39 per barrel per day its highest level since tracking began in 2010. Some supertanker voyages have reached costs of approximately $29.5 million per trip, reflecting the scale of the spike in transport costs.

The impact extends beyond shipping costs to global supply chains, as cargo is rerouted along longer, more expensive routes placing additional pressure on international markets and raising the specter of a new wave of energy- and transport-driven inflation.

In this context, Iran’s strategy becomes clearer: leveraging energy as a central pressure tool through a simple equation “If Iran is prevented from exporting its oil, the region’s oil will not flow smoothly.” This strategy does not necessarily aim for total closure but rather sustained disruption that raises costs to a level where continued flows depend on political agreements rather than military enforcement.

Yet this approach is not without constraints. Despite wielding energy as a weapon, Iran remains dependent on its revenues, requiring a calibrated balance between escalation and maintaining minimal flows. Meanwhile, growing international discussions regarding navigation insurance reflect increasing recognition that the Hormuz crisis has evolved into a complex challenge affecting the stability of the global economic system.

A War of Straits and Expanding Fronts

Maritime tensions are no longer confined to the Gulf and the Strait of Hormuz. Signs of expansion are emerging in the Red Sea, with increasing indications that the Bab al-Mandab Strait is being drawn into the conflict equation.

The US deployment of the aircraft carrier USS Gerald Ford to the Red Sea carries significant strategic implications, prompting a direct Iranian response. The Revolutionary Guard indicated that logistical hubs in the Red Sea could become potential targets, signaling an expansion of the conflict beyond its traditional geography.

Iran’s Tasnim News Agency quoted a military source warning that “insecurity in Bab al-Mandab and the Red Sea is among the options on the table if Kharg is targeted.”

This coincides with rising international concern, reflected in a joint Gulf-UK statement condemning threats to navigation in both the Strait of Hormuz and Bab al-Mandab, emphasizing the importance of protecting maritime routes, supply chains, and energy market stability.

This convergence of military movements and political messaging reflects growing awareness that the conflict is entering a more complex phase, where maritime geography—from the Gulf to the Red Sea—forms a single interconnected theater of operations.

Bab al-Mandab, in particular, gains heightened importance as a critical link between Asia and Europe and a key route for global trade and energy flows. With the potential involvement of Yemen’s Ansar Allah (Houthis) in maritime pressure tactics, the trend toward shifting part of the confrontation to this strait is becoming more pronounced.

Ultimately, these developments suggest that continued escalation may push the crisis beyond the Strait of Hormuz into a broader “War of Straits,” where global energy corridors intersect within a single conflict arena.

In such a scenario, confrontation evolves into a complex pattern combining wider tanker targeting with threats to vital maritime passages from the Gulf to the Red Sea amplifying the impact on global energy markets.

This trajectory points toward a prolonged conflict that is difficult to control or resolve through conventional military means alone, given the overlapping geography, multiplicity of actors, and the expanding economic cost of disruption.

Over the past several years, the Kirkuk–Ceyhan oil pipeline had effectively faded into irrelevance. The aging federal line, which once connected the oil fields of this northern Iraqi city to the Mediterranean via Turkey, was shut down in 2014. Northern exports were subsequently rerouted through the Kurdistan Region’s pipeline network, which is linked to Turkey’s port of Ceyhan.

In March 2023, flows to Turkey came to a halt following an international arbitration ruling that required Ankara to pay approximately $1.5 billion to Baghdad for exports conducted without its consent. Until February 2026, the bulk of Iraqi oil continued to flow southward to the gulf, while exports from the Kurdistan Region persisted at around 200,000 barrels per day.

But with the outbreak of the U.S.-Israeli war on Iran, the Kirkuk–Ceyhan pipeline shifted from a stalled legal and political dispute into a potential lifeline reshaping the balance of power between Baghdad and Erbil, and reopening the door for Turkey to reclaim a central role.

Why Has Ceyhan Returned Now?

The equation was upended with the closure of the Strait of Hormuz in March 2026. The disruption of exports via the gulf dealt a heavy blow to southern Iraq, where the majority of the country’s oil is produced and exported. Output from southern fields dropped by roughly 70 percent to 1.3 million barrels per day, while total Iraqi production fell to around 1.4 million barrels.

This came as Standard & Poor’s warned that the continuation of such conditions would place severe pressure on Iraq’s public finances, given that oil accounts for roughly 90 percent of state revenues.

As a result, the Kirkuk–Ceyhan file is no longer merely a legacy dispute over authority and transit fees. It has become a pressing question of how to secure an alternative outlet to mitigate the shock.

Baghdad has therefore moved along two parallel tracks:

The first was immediate and emergency-driven: in early March, the Oil Ministry requested that Erbil allow at least 100,000 barrels per day of Kirkuk oil to be pumped through the region’s network to Ceyhan.

The second was more strategic. On March 16, Oil Minister Hayan Abdul Ghani announced that Iraq had begun inspecting a 100-kilometer segment of the old federal pipeline, in preparation for resuming direct exports from Kirkuk to Ceyhan without passing through the region. The initial capacity is projected at 250,000 barrels per day, potentially rising to 450,000 if Kurdish oil is included.

In this sense, Hormuz has revived Kirkuk–Ceyhan not as a single pipeline, but as a set of routes and a set of negotiating tools.

How Should This Return Be Understood?

To grasp the current complexity, one must first distinguish between the routes.

The Iraqi–Turkish pipeline is governed by a 1973 agreement and has a historical capacity of around 1.5 to 1.6 million barrels per day.

However, the direct federal line that Baghdad is now seeking to revive has remained offline since 2014 following attacks by the Islamic State group.

By contrast, in 2013 the Kurdistan Region built a parallel network linking its fields to Fishkhabur and onward to Turkey, enabling it to export oil independently. This triggered a long-running dispute with Baghdad over who holds the authority to sell, load, and manage revenues.

When the arbitration ruling was issued in March 2023, it halted northern flows via Turkey to the port of Ceyhan not Iraq’s entire exports.

At the time, around 450,000 barrels per day were suspended, including 370,000 from the Kurdistan Region and 75,000 of federal oil, according to Reuters.

Here lies the crux: the “return of Ceyhan” today does not refer to a single route, but to two parallel tracks. The first is an emergency political agreement to resume exports through the region’s network. The second is a federal project to revive a direct Kirkuk–Ceyhan line that bypasses Erbil.

How Did Hormuz Shift the Balance Between Baghdad and Erbil?

The closure of Hormuz exposed Baghdad’s heavy reliance on the south, prompting the federal government to use the crisis to reassert control over northern oil policy.

It therefore requested that the Kurdistan Region facilitate exports through its network, but later accused Erbil of imposing “arbitrary” conditions on the pipeline’s use.

Erbil rejected this characterization, arguing that Baghdad had failed to address the underlying security and economic challenges facing the region’s oil sector from protecting fields and companies to easing trade and financial restrictions.

The dispute has thus evolved beyond export rights into a broader question of who sets the terms of resumption and who bears the risks.

Under the pressure of war, the two sides reached an agreement on March 17, 2026, establishing a joint committee to prepare for the resumption of exports via the regional pipeline to Ceyhan. Revenues would return to the federal treasury, alongside new security measures to protect fields and ensure operational continuity.

Yet this agreement, in itself, does not equate to reviving the direct federal pipeline that Baghdad is simultaneously working to restore.

In other words, Erbil accepted an exceptional step under extraordinary circumstances, but did not abandon its conditions. Nor did Baghdad relinquish its longer-term objective: reducing its dependence on the region as an indispensable transit corridor.

What Does Turkey Want?

Turkey is not merely a transit point in this story. Since flows stopped in 2023, the Kirkuk–Ceyhan pipeline has remained idle, depriving Ankara not only of transit fees but also of geopolitical leverage in Iraq’s energy sector.

In July 2025, Turkey announced that the existing agreement governing the pipeline would expire in July 2026, while presenting a draft of a broader new deal encompassing oil, gas, petrochemicals, and electricity.

In essence, Ankara is not simply seeking to resume flows it aims to redefine its energy relationship with Iraq.

Energy Minister Alparslan Bayraktar made this clear, stating that any new agreement must include a mechanism to ensure full utilization of the pipeline’s capacity, estimated at around 1.5 million barrels per day. He also floated the possibility of extending the line to southern Iraq.

From this perspective, the closure of Hormuz strengthens Turkey’s argument: if the Gulf can be disrupted or closed, diversifying export routes via the Mediterranean is no longer a luxury, but a necessity.

Turkey’s position therefore goes beyond receiving oil it seeks to transform Ceyhan into a cornerstone of a broader energy corridor linking Iraq to Turkey and the Mediterranean under new terms.

A Temporary Fix or a Lasting Reconfiguration?

So far, the numbers suggest that while Ceyhan offers a critical outlet, it cannot replace the الجنوب. Iraq has lost roughly 2 million barrels per day in exports, and markets view the pumping of 100,000 barrels per day via Ceyhan as “not a major shift,” even if it buys time.

Even Baghdad’s projected capacity between 250,000 and 450,000 barrels per day if Kurdish oil is included remains far below pre-war southern export levels, which formed the backbone of Iraq’s economy.

Ceyhan alone will not rescue Iraq, but it alleviates the bottleneck and provides a strategic lever that did not exist weeks ago. More importantly, the March 17 agreement appears less like a final settlement and more like a war-imposed truce.

Erbil has agreed to resume exports through its network under “exceptional circumstances,” while tying this to continued negotiations with Baghdad over trade constraints and security guarantees for companies.

Meanwhile, Baghdad is pressing ahead with rehabilitating a direct federal route to reduce reliance on the region, and Turkey is preparing to leverage the impending expiration of the current legal framework to push for a broader deal.

The revival of Ceyhan, therefore, is neither a decisive victory for Baghdad nor a clear defeat for Erbil. Rather, it represents a reshuffling of the cards among three actors, each seeking to turn crisis into negotiating advantage.

Since the outbreak of the U.S.–Israeli war on Iran, hundreds of oil tankers and cargo vessels have piled up at the entrance to the Strait of Hormuz, waiting in an open queue tied directly to the trajectory of the conflict. At the same time, several European countries most notably France and Italy have initiated separate negotiations with Tehran to guarantee safe passage for their ships.

Meanwhile, the number of vessels that have been targeted while attempting to cross the strait has risen to 16, according to open-source investigations.

With every crisis in this maritime corridor, the long-standing question of global energy and trade security resurfaces. The strait is widely considered one of the most sensitive chokepoints in the international economy.

In Sudan, the effects of these tensions are emerging in a different form. In several cities—chief among them the capital, Khartoum—fuel lines have begun to stretch outside service stations. Supplies arriving through the Red Sea are closely tied to the stability of supply chains in the Gulf and to shipping costs. Any disruption in those chains quickly reverberates in local markets.

Sudan therefore finds itself navigating an exceptionally complex geography. Fuel routes pass through the Gulf and the Strait of Hormuz, while goods and commodities travel through the Bab al-Mandeb Strait before reaching Port Sudan from the Indian Ocean and the Gulf of Aden. As a result, any instability in the region ripples through Sudan’s ports and markets before gradually affecting the broader economy and food supply.

Hormuz: Oil and Fertilizers

When discussions turn to the possible closure of the Strait of Hormuz, attention usually focuses on oil. The narrow waterway that connects the Gulf to the Sea of Oman carries roughly 20 percent of the world’s oil supplies, making it one of the most critical chokepoints in global energy markets. As tensions in the Gulf have escalated, oil prices have jumped rapidly on global markets.

Major investment banks have raised their forecasts, with Goldman Sachs analysts estimating prices at around $110 per barrel, while JPMorgan has lifted the ceiling to about $130 if the strait remains closed.

These fluctuations reach Sudan quickly. The country relies almost entirely on imported fuel shipped through the Red Sea. Sudan’s diesel imports are estimated at roughly 60,000 to 70,000 tons per month—about 720,000 to 840,000 tons annually—most of which arrives through Port Sudan after passing through maritime routes from the Gulf. Any rise in global oil prices or disruption to tanker traffic therefore directly affects import costs and the country’s ability to secure energy supplies.

Yet oil is not the only commodity passing through the strait. Roughly one-third of global fertilizer trade also moves through Hormuz. Qatar is the world’s largest exporter of urea, while Gulf states account for around 45 percent of the global market for this essential agricultural input. Urea is a key nitrogen fertilizer with few viable substitutes for many crops and remains central to agricultural production across vast parts of the world.

As global markets have grown more volatile, the price of urea has jumped from around $450 per ton to more than $600 in just one week an increase exceeding 37 percent. Unlike energy markets, which maintain strategic reserves that can be tapped during crises, fertilizer markets lack similar mechanisms. As a result, any disruption to trade routes quickly translates into direct pressure on agriculture and food security.

Bab al-Mandeb: An Imminent Threat

Tensions in the Gulf do not stop at the Strait of Hormuz. In recent days, Al Jazeera quoted a senior Iranian military official warning that any strategic miscalculation by the United States could push another strait into a similar situation a clear reference to the Bab al-Mandeb Strait, the southern gateway to the Red Sea and one of the most vital maritime links between Asia and Europe.

The significance of this threat is tied to the military reality in Yemen. The Iranian-backed Houthi movement has previously carried out attacks on commercial vessels in the Red Sea, at times disrupting navigation and forcing international shipping routes to divert away from the corridor. These precedents have made Bab al-Mandeb part of the region’s pressure dynamics, where any escalation could quickly affect ship traffic through the strait.

For Sudan, Bab al-Mandeb holds direct importance. Many ships bound for Port Sudan pass through the strait before reaching Sudan’s coast. Fuel shipments from the Gulf follow the same route, as do commercial goods and food supplies. The two straits are not alternatives to one another; rather, they resemble the two blades of a pair of scissors, gripping Sudan between them.

Sudan: Three Factors Increasing Vulnerability

The potential closure of the Strait of Hormuz would not affect only one country. Major industrial economies depend—at varying levels—on energy supplies from the Gulf. Japan imports roughly 75 percent of its oil through this route, while China, India, and South Korea also rely heavily on it. These countries possess economic tools and reserves that allow them to absorb part of the shock if supplies are disrupted.

Sudan’s situation is markedly different for several reasons:

The first factor is the weakness of its foreign currency reserves. Fuel imports depend on hard currency, which has been scarce in Sudan’s economy for years. Any rise in global prices intensifies pressure on the import bill and reduces the government’s ability to secure supplies in time. Shifting to alternative routes or new suppliers requires financial capacity that is difficult to muster under current conditions.

The second factor is the ongoing internal war. The conflict that erupted in mid-April 2023 has drained state resources and weakened economic institutions. Managing the energy sector has become increasingly fragile at a time when the country urgently needs forward-looking policies and long-term planning.

Former Sudanese Energy Minister Adel Ali Ibrahim previously noted that war and corruption had weakened the fuel import and distribution sector, while private companies have expanded their influence within the industry.

The third factor relates to Sudan’s logistical geography. Most of the country’s imports arrive through Port Sudan on the Red Sea, the primary maritime outlet for a nation of Sudan’s size and population. The lack of alternatives means that any disruption to navigation in the Red Sea or in the maritime corridors leading to it immediately affects the flow of supplies.

Under these conditions, Sudan finds itself under dual pressure: an internal conflict draining its resources and regional crises shaping the trade routes on which it depends.

Fertilizers and the Agricultural Season

In the immediate calculations of the crisis, discussions tend to focus primarily on fuel. Sudan’s Ministry of Energy says current fuel stocks may last until the end of April 2026, while the finance minister has hinted at greater pressures on both supply and financing. These estimates reflect uncertainty in the energy market, yet they do not capture another issue of equal importance to Sudan’s economy.

That issue is fertilizers. Sudan is preparing to enter its summer agricultural season in the coming months, a period that depends heavily on the timely availability of production inputs. In remarks to Sudan Tribune, economic analyst Abdelazim Al-Mahal warned that the repercussions of tensions in maritime corridors will not stop at fuel but will also affect the prices of urea, fertilizers, and agricultural pesticides.

Global markets have already begun registering these pressures. Fertilizer prices have risen sharply in recent weeks amid escalating tensions in the Gulf, from which most nitrogen fertilizers originate. In a country like Sudan where large segments of the economy rely on agriculture any increase in the cost of agricultural inputs will directly affect production volumes in the following season. The pressure on farmers will eventually reach local markets months later, affecting food availability.

This agricultural dimension is particularly significant for Sudan, which imported about 450,000 tons of fertilizers annually before the war. During the conflict, imports dropped to roughly 50,000 tons to meet the needs of the agricultural sector.

These developments come at a time when Sudan is already facing high levels of food insecurity. Reports from the World Food Programme place the country among those most vulnerable to the most severe levels of hunger globally, alongside Yemen, the Democratic Republic of the Congo, Nigeria, Palestine, and Haiti.

A Missed Opportunity Amid Disaster

From another perspective, some economic analysts point to a different angle in the shifting patterns of global trade routes. Disruptions in navigation through certain corridors may push part of global shipping traffic to search for alternative routes through the Red Sea. In such a scenario, Port Sudan could gain greater logistical importance as a potential hub for redistributing goods to markets in East and Central Africa.

This possibility stems from Sudan’s geographic position along one of the most important maritime trade routes linking Asia and Europe. Yet transforming geography into economic gain requires effective infrastructure, capable port administration, and a stable political environment that encourages investment and trade.

Under current conditions, however, these prerequisites remain distant. The internal war and mounting economic pressures make it difficult for Sudan to capitalize on any opportunities created by shifts in global shipping routes.

Saudi Arabia has emerged as the leading foreign investor in Syria, with investments worth billions of dollars across a wide range of sectors.

After signing around 47 agreements and memoranda of understanding on July 24, 2025, valued at approximately $6.4 billion, the kingdom significantly expanded its economic presence in the country. The deals involved more than 100 Saudi companies operating in sectors including energy, real estate, industry, infrastructure, financial services, healthcare, agriculture, telecommunications, information technology, construction, and education.

Saudi Arabia further intensified its engagement when Saudi Minister of Investment Khalid Al‑Falih (who was later relieved of his position) announced on February 7, 2026, a $10 billion investment package for Syria. The initiative covers aviation, telecommunications, energy, water, industry, real estate, and development finance, and involves both public and private Saudi entities. The move comes as Riyadh positions itself as a key supporter of Syria’s new leadership.

As Saudi investments in Syria expand, questions are emerging about the kingdom’s motivations and the potential long-term implications. Analysts are asking whether these investments could affect Syrian sovereignty in the future, especially given that Syria remains a high-risk transitional market with limited short-term profitability compared with more stable regional economies.

Strategic Objectives for Saudi Arabia in Syria

Riyadh has reportedly requested that Syria—rather than Israel—serve as the transit country for a fiber-optic cable linking Saudi Arabia to Greece through the Mediterranean as part of the “East to Mediterranean Data Corridor” (EMC) project, according to regional officials cited by Middle East Eye.

Recent agreements also include upgrading Syria’s telecommunications infrastructure through the “Silk Link” project, which aims to connect the country regionally and internationally through a fiber-optic network extending more than 4,500 kilometers. The project, estimated at around $1 billion, will be implemented in two phases over 18 to 48 months, with gradual operational rollout.

A Western official familiar with Riyadh’s investment efforts told Middle East Eye:

“For Saudi Arabia, Damascus represents the heart of regional connectivity. The Saudis want roads, cables, and railways to pass through Syria.”

Saudi Arabia’s attempt to integrate Syria into such projects highlights how the kingdom is leveraging its wealth to support regional allies while competing with the United Arab Emirates and Israel for influence in the region. It also signals a broader regional vision from Riyadh.

According to Mulham Al‑Jazmati, a researcher at Karam Shaar Advisory, the strategy aligns with Saudi Arabia’s domestic transformation. Saudi companies supported by institutions such as the Public Investment Fund are increasingly seeking to expand regionally and export their expertise in energy, infrastructure, and large-scale project management.

Political economy researcher Yahya Al‑Sayed Omar believes Saudi investment in Syria reflects strategic considerations that extend beyond immediate financial returns.

He told Noon Post that the decision is not based on a conventional comparison between stable and high-risk markets. Instead, it reflects the belief that early presence in an economy undergoing restructuring provides advantages that are difficult to replicate later.

Economic expert Mohammad Alabi similarly argues that investing in Syria could give Saudi Arabia long-term structural influence through financial tools, which are more sustainable and less costly than military or ideological instruments. Such investments could fill the economic vacuum in Syria that historically attracted interest from Turkey, Iraq, and Iran.

A Shift in Tools and Saudi Reassertion

Saudi Arabia’s approach to the Syrian file has undergone a notable transformation. The kingdom has shifted away from reliance on military tools toward economic instruments that are quieter but potentially more effective.

After years of backing armed factions, Riyadh is now focusing on investment, financing, and participation in reconstruction projects as alternative channels of influence.

Economic expert Younes Karim told Noon Post that success in managing the Syrian file could open the door for Saudi Arabia to address more complex regional issues in Iraq and Yemen. A breakthrough in Syria could facilitate broader Saudi engagement across the region and possibly reshape Riyadh’s approach to the Lebanese file as well.

Yahya Al-Sayed Omar stressed that the political dimension remains clearly present behind the economic engagement. Strengthening economic ties reinforces political alignment as Arab states reassess their relations. A stable Syrian economy, he argued, would contribute to broader regional stability—an outcome that aligns with Saudi interests in reducing conflict and expanding cooperation.

Investment therefore serves a dual function: it is both an economic instrument and a long-term mechanism of influence that positions Riyadh as a direct participant in Syria’s reconstruction phase.

Could Investments Affect Syrian Sovereignty?

Syria’s geographic location makes it a crucial logistical hub, sitting at the crossroads linking the Gulf to the Eastern Mediterranean and serving as a natural extension toward the markets of Iraq, Turkey, and Europe.

Any investment in Syria therefore provides access to broader transportation and energy networks while enhancing investors’ ability to benefit from shifts in regional trade routes.

According to Yahya Al-Sayed Omar, establishing a foothold in this location fits within Saudi Arabia’s long-term strategy of diversifying economic partnerships and securing flexible supply chains.

One of the most prominent recent deals is the agreement between Saudi low-cost carrier Flynas and the Syrian Civil Aviation Authority to establish a new airline called Nas Syria. Under the arrangement, the Syrian side will hold 51% of the company, while the Saudi partner will own 49%.

Al-Sayed Omar argues that the impact of Saudi investments on Syria’s economic sovereignty will ultimately depend on the institutional framework governing those investments. Large investment volumes alone do not necessarily undermine national decision-making if contracts clearly define state rights, oversight mechanisms, and revenue shares.

The real risk, he said, lies not in partnerships themselves but in weak legal structures or a lack of transparency. Properly managed agreements could transfer expertise and modernize the economy, while poorly regulated deals could restrict economic decision-making in the future.

Alabi echoed this view, stating that sovereignty is not stripped away through investment but lost when state institutions lack capacity and negotiations are conducted without oversight.

He also noted that Syria’s transitional government has amended the investment law through a presidential decree without a legislative framework, granting extensive exemptions and concessions while lacking parliamentary oversight and an independent judiciary conditions that could transform foreign investments into what he called a “sovereign constraint.”

Growing Reliance on Saudi Investments

The Syrian economy could benefit not only from Saudi capital but also from the accumulated expertise of Saudi companies in managing large projects and structuring public-private partnerships.

Over the past decade, Saudi firms have developed contracting models that tie financing to implementation and clear performance indicators. If these models are introduced in Syria, Al-Jazmati argues, the result would not simply be an inflow of money but the introduction of modern management and operational tools capable of addressing long-standing institutional gaps.

However, knowledge transfer is not automatic it depends on contractual design. Investments can easily become long-term concessions that generate little local value unless agreements include clear requirements such as local employment, training, local content, and transparent reporting.

At a time when the Syrian government struggles to pay public-sector salaries in line with rising living costs, the promotion of projects worth billions of dollars highlights a stark gap between announced ambitions and actual capabilities.

According to Younes Karim, this contradiction reflects the transformation of the Syrian economy into one driven by promises and unrealistic projections, undermining effective and sustainable planning.

The government, he argues, increasingly looks to Saudi Arabia for financial backing, logistical support, and technical assistance for exports, rather than pursuing domestic solutions or independent national strategies.

This dynamic could create new centers of influence within state institutions as networks of investors, advisers, and stakeholders align their decisions with Saudi priorities. Over time, such dependency could weaken institutional autonomy and push the state closer to administrative paralysis.

Karim warns that when Saudi Arabia declines to finance certain projects, the result is often not the search for alternative partners but a lowering of ambitions and a retreat from declared goals deepening policy fragility.

Yahya Al-Sayed Omar, however, sees Saudi investment as a calculated bet on geography, political alignment, and Syria’s recovery phase. Its success will depend on careful management by both sides: Riyadh must balance risks and returns, while Damascus must establish a transparent legal environment that protects national interests. If this balance is achieved, investment could become a genuine pillar of economic stability rather than merely deferred financial commitments.

Why Have Announced Projects Not Yet Been Implemented?

Despite the strategic importance of Saudi investment in Syria, many projects announced in July 2025 have yet to move forward.

The head of Syria’s Investment Authority, Talal Al‑Hilali, told Reuters during the World Governments Summit in Dubai that the new investment wave represents the largest since the United States lifted a strict sanctions package on Syria in December 2025. He added that most potential investments would be structured as ready-to-implement contracts rather than non-binding memoranda of understanding.

The lack of implementation reflects the gap between announcements and execution. Memoranda of understanding are often non-binding statements of intent, and implementation faces obstacles including an evolving legal framework, complex property issues, and an undercapitalized banking sector.

Investors also require clearer mechanisms for dispute resolution and guarantees for profit repatriation—elements that remain incomplete in Syria.

Financial transfer complexities and currency volatility also slow the flow of funding, pushing companies to adopt a gradual investment approach tied to measurable stability indicators.

Alabi argues that the delay should not be interpreted as a Saudi retreat but rather as a reflection of Syria’s challenging environment. Like any sovereign fund or multinational company, Saudi investors do not release funds immediately after signing memoranda.

Many previously announced agreements also carried symbolic political significance, serving as signals of support and openness rather than fully prepared projects backed by completed feasibility studies and financing arrangements.

Once technical and financial reviews began, numerous gaps emerged ranging from unprepared infrastructure and unreliable economic data to legal risks and a lack of monetizable sovereign guarantees, aside from limited gold reserves.

New Agreements Announced in 2026

Among the additional agreements announced in February 2026:

• The launch of a $2 billion investment fund in Syria to develop two airports in the city of Aleppo in multiple phases, including runway upgrades, expanded passenger terminals, and logistics facilities transforming the northern city into a regional transport and cargo hub.

• An agreement between Syria’s Ministry of Water and ACWA Power, one of the world’s largest desalination and renewable energy companies.

• Completion of a deal to operate and manage the Modern Syrian Cables Company in partnership with Riyadh Cables Group and the Syrian sovereign fund.

• Three additional agreements for major real estate developments aimed at expanding residential and commercial infrastructure under the supervision of the Saudi-Syrian Business Council.

In a major shift poised to reshape the contours of global trade, India and the European Union announced on Tuesday, January 27, 2026, the conclusion of a comprehensive trade agreement culminating two full decades of negotiations at a moment of unprecedented geopolitical sensitivity on the international stage.

Dubbed “the mother of all deals” by Reuters, the agreement carries extraordinary weight due to its demographic and economic scale. It spans a market of nearly two billion people approximately 1.4 billion in India and around 500 million in EU member states. Together, they represent nearly 25% of global GDP and about a third of international trade, making this one of the most consequential trade agreements in the modern global economic system.

This alignment is not limited to commerce. In parallel, the European Union also announced a security and defense partnership with India, a direct response to mounting strategic challenges and escalating global uncertainty.

According to an official statement, this partnership establishes a comprehensive framework that outlines both sides’ strategic ambitions and governs cooperation in peace, security, and defense, signaling a transition to a deeper and more integrated relationship.

This dual-track partnership economic and security-oriented emerges against the backdrop of growing geopolitical turbulence, disrupted global supply chains, and a fractured trade landscape, aggravated in large part by the protectionist policies of former US President Donald Trump. These policies upended global trade balances and reopened debates about the future of the multilateral trading system.

A Historic Deal: What Are the Details?

European Commission President Ursula von der Leyen described the deal as a historic moment, writing on X (formerly Twitter): “Europe and India are making history today,” adding that the two parties had reached “the most significant agreement ever,” creating a free trade zone encompassing nearly two billion people, with mutual benefits.

Indian Prime Minister Narendra Modi echoed the sentiment, calling it “the most important deal globally,” and asserting that it would open vast economic opportunities for India’s 1.4 billion citizens and millions more across EU countries.

Both sides expect the agreement to significantly boost bilateral trade by slashing tariffs across numerous sectors. According to estimates from Brussels, reduced Indian tariffs on EU imports could save the bloc up to €4 billion annually.

The Financial Times reported that the deal would remove approximately €4 billion ($4.75 billion) in tariffs on EU exports, with expectations that shipments to India could double as a result.

Under the agreement, around 96.6% of EU exports to India will see tariffs reduced or eliminated altogether, leading to lower prices on a range of European goods including automobiles, alcoholic beverages, and machinery.

India is expected to cut import duties on European-made cars from 110% to 10%, and on wine from 150% to 20%. Tariffs on goods such as pasta and chocolate, currently at 50%, will be scrapped entirely, according to the EU.

During her recent visit to India, von der Leyen affirmed that the EU anticipates “the highest level of market access ever granted by India to a trade partner,” noting that India has long been a highly protected market. She projected that the deal would lead to a doubling of EU exports.

In 2024, bilateral trade in goods reached about €120 billion ($142 billion), an increase of nearly 90% over the past decade, with another €60 billion ($71 billion) in services, according to EU data.

Brussels is pinning hopes on India’s vast market the most populous country in the world which recorded strong year-on-year growth of 8.2% in the last quarter of 2025.

According to the International Monetary Fund, India is expected to overtake Japan this year to become the world’s fourth-largest economy, trailing only the United States, China, and Germany. Indian government projections suggest the country could break into the top three global economies before 2030.

The formal signing of the agreement is scheduled after the completion of legal reviews a process expected to take five to six months. Implementation could begin within a year, paving the way for a new phase of economic integration and cooperation.

Countering U.S. Policy

This move cannot be separated from its geopolitical context. It forms part of a broader set of political and economic maneuvers designed to hedge against U.S. policies, amid rising tensions between Washington and both Brussels and New Delhi.

The agreement represents more than bilateral cooperation it marks a strategic realignment aimed at reducing dependency on the United States and redistributing centers of gravity in the international system.

Tensions escalated following threats by Donald Trump to impose tariffs on EU nations, sparked by European opposition to his plan to annex Greenland. His repeated warnings that transatlantic partnerships would be “stress-tested,” coupled with a combative tone that alarmed Western allies, heightened frustration within the EU.

These developments have prompted EU leaders to seek rapid alternatives and mechanisms to strengthen their strategic and economic autonomy, as far removed from Washington’s shadow as possible.

Similarly, ties between Washington and New Delhi have been strained. The Trump administration imposed 50% tariffs on Indian goods, and failed attempts at reaching a bilateral trade deal last year due to stalled communications pushed India to expedite alternative partnerships that would bolster its global economic position and shield it from U.S. pressure.

In this context, mutual interests between the EU and India both adversely affected by American protectionism converged. The result is a multi-dimensional partnership leveraging demographic power, economic influence, and global political clout to form a new bloc capable of weathering shocks from deteriorating U.S. ties and reshaping the emerging global order.

This convergence goes beyond economics. The security and defense partnership suggests a profound realignment, potentially redrawing the map of traditional alliances. It cannot be divorced from the growing concerns surrounding NATO’s future, as Trump’s antagonistic approach to the alliance has cast doubts on its cohesion and role within the Western security architecture.

Redrawing the Global Trade Map

The creation of an economic bloc that accounts for nearly 25% of global GDP, encompasses a third of international trade, and serves a population of about two billion roughly a quarter of humanity represents a structural transformation of the global economic order. It signals a reconfiguration of trade flows and the beginning of a new era of unconventional alliances that defy rigid ideological molds.

As protectionism rises and the predictability of traditional economic relationships erodes, major nations and blocs are compelled to seek out more balanced and stable partnerships.

These new partnerships are no longer bound by shared ideologies. The India–EU alliance exemplifies this shift: India, with historic ties to the Eastern bloc, joining forces with Europe—the cradle of Western liberalism in a multifaceted economic and security pact.

This trend is evident elsewhere. The EU recently finalized a key agreement with the Mercosur bloc in South America and concluded trade deals last year with Indonesia, Mexico, and Switzerland.

India, for its part, signed trade agreements with the United Kingdom, New Zealand, and Oman, underscoring a global race to restructure trade networks and insulate them from geopolitical shocks.

In the same vein, UK Prime Minister Keir Starmer is set to begin a three-day official visit to Beijing on Wednesday, January 28, accompanied by Treasury Secretary Rachel Reeves and Business Secretary Peter Kyle, along with a large delegation of business leaders and economic officials. The visit framed explicitly around economic cooperation—aims to open new opportunities for British firms and strengthen trade ties with China.

Together, these developments point to a comprehensive reevaluation of the global economic and trade architecture. The world appears to be moving toward a more multipolar and interconnected system. Should other major economies join these new coalitions, the process of reshaping the global economic order could accelerate dramatically beyond the reach of either unilateral or bipolar dominance.

And What About Washington?

Unsurprisingly, this deal has rattled Washington, which may see it as a threat to the unipolar system that underpins its global dominance. It could reduce U.S. influence and accelerate the emergence of a powerful new political and economic bloc capable of challenging American hegemony.

As of this writing, there has been no official statement from President Trump. However, U.S. Treasury Secretary Scott Peasant criticized the EU for proceeding with the deal, citing ongoing U.S. tariffs of 25% on Indian goods as a consequence of New Delhi’s continued purchases of Russian oil.

Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri told CNBC that U.S.-India relations remain positive and expressed optimism about a future trade agreement. He emphasized India’s commitment to a multilateral trading system.

In his analysis of the deal, Hosuk Lee-Makiyama, Director of the European Centre for International Political Economy, said it stands as one of the best deals for both sides especially given their protectionist approaches in sensitive sectors such as agriculture and automotive manufacturing. He noted that Europe has grown accustomed to recurring U.S. tariff threats.

Meanwhile, European Parliament member and Foreign Affairs Committee Chair David McAllister called for greater European sovereignty and competitiveness, while maintaining transatlantic relations grounded in respect and trust. He insisted that Europe is fully capable of defending its interests amid current geopolitical shifts.

Ultimately, President Trump’s second term appears likely to trigger sweeping changes not only in politics and security, but also in the structure of the global economic order. The realignment of traditional alliances is now a distinct possibility, as the old international system nears its end and a new, still-undefined balance of power begins to take shape.

This complex and unsettled reality presents an existential challenge especially for mid-sized nations. As Canadian Prime Minister Mark Carney bluntly warned during his address at the recent Davos Forum: “Middle powers must act together because if you’re not at the table, you’re on the menu.”

As Syria enters the post-liberation phase, its economy faces a formidable challenge: reviving activity and laying the groundwork for sustainable growth. In this context, the role of Syrian expatriates armed with capital, expertise, and expansive economic networks has come to the forefront.

The map of Syrian presence in neighboring countries reveals that exile has long since evolved beyond a humanitarian refuge. Over the past decade, it has become a wide-ranging human and economic presence, varying in character from one country to another, yet unified in its potential as an asset for rebuilding Syria’s economy.

Syrians in Exile: The Map of Displacement and Economic Potential

Turkey: The Largest Bloc of Human and Economic Capital

Approximately 2.37 million Syrians reside in Turkey, nearly half of whom fall within the productive age group (18–64), highlighting their significant presence in the labor market. Educationally, Syria ranks as the top country of origin for international students in Turkey, hosting over 60,000 Syrian university students more than 18% of the total international student body. An additional 17,000 Syrians have graduated from Turkish universities, forming a highly skilled human capital base.

Economically, Syrians founded 10,332 companies in Turkey between 2010 and 2023, with a combined capital of around $632 million, according to the Union of Chambers and Commodity Exchanges of Turkey. Other estimates place the value of Syrian investments at approximately $10 billion, largely concentrated in small and medium-sized enterprises (SMEs) in sectors such as trade, restaurants, services, and light manufacturing.

These investments have generated around 500,000 jobs, with Syrians prominently active in the textile, ready-made clothing, construction, agriculture, logistics, and food industries particularly in southern Turkey transforming them into a vital economic actor, far beyond a mere refugee population.

Lebanon: High Population Density and a Parallel Economy

Lebanon hosts one of the densest concentrations of Syrians worldwide. As of December 2024, local authorities estimate the population at around 1.12 million Syrians, including the unregistered, compared to 636,000 officially registered refugees with the UNHCR as of September 2025.

This demographic weight has directly impacted Lebanon’s labor market. Studies estimate over one million Syrian workers are employed across sectors like agriculture, construction, and services primarily in the informal economy.

Despite the lack of precise data on Syrian-owned businesses, Syrian investments are estimated at $26 billion, reflecting a significant yet largely unregulated economic footprint.

Egypt: A Model for Investment and Entrepreneurship

Egypt is home to around 1.5 million Syrians, according to the International Organization for Migration (IOM), and their presence is distinctly investment-oriented. Data from the General Authority for Investment and Free Zones reveals that Syrian nationals own 21.3% of all foreign companies established in Egypt as of June 2025, totaling 16,323 firms.

Syrian investments are estimated at around $23 billion, primarily in trade, food industries, services, and restaurants. This has positioned the Syrian community as one of the most dynamic foreign investor groups in Egypt over the past decade.

Jordan: A Productive and Integrated Community

Roughly 1.3 million Syrians have lived in Jordan since 2011, with 557,783 officially registered with the UNHCR as of March 2025, according to the Social Protection Observatory at Tamkeen. Syrians have emerged as entrepreneurs and investors, with total investments estimated at $25 billion across multiple sectors.

According to the Companies Control Department, over 4,100 Syrian-owned companies are registered in Jordan, operating in industry, trade, and services an indication of genuine economic integration beyond simple labor participation.

Iraq: A Regional Base for Reviving Syrian Trade

In Iraq particularly in the Kurdistan Region more than 300,000 Syrian refugees reside, according to UNHCR data. Their economic activity centers on labor, small enterprises, services, restaurants, construction, and cross-border trade.

This presence is strategically significant, given the geographic proximity and the region’s potential role in reviving overland trade routes and fostering economic integration between Iraq and Syria in the post-conflict era.

Across neighboring countries, Syrians have built up diverse human and economic capital from labor and field experience to entrepreneurship and investment forming a foundation that can be mobilized to jumpstart the Syrian economy and reintegrate it into the regional system.

Syrians in Wealthier Nations

Syrians in wealthier countries represent a powerful economic force—not merely due to their numbers, but because of their financial resources, quality of investment, and degree of integration into advanced economies. Unlike in neighboring states, their presence in the West is marked by professional, structured engagement, albeit with limited official data.

Europe: A Concentration of Syrian Human Capital

Europe particularly Germany and Sweden is home to one of the largest Syrian diasporas, both in size and depth of professional integration. Germany hosts around 973,000 Syrians as of the end of 2023, with approximately 712,000 seeking protection, according to the Federal Statistical Office (Destatis). In Sweden, 244,000 Syrians reside, making them one of the largest foreign communities.

Syrians are active in sectors experiencing labor shortages such as mechanical engineering, automotive manufacturing, public transport, nursing, heavy logistics, and auxiliary health services.

Notably, Syrians are the largest group of foreign doctors in Germany, with 6,120 Syrian physicians working in the German healthcare system as of the end of 2023. This level of professional integration and human capital positions the Syrian diaspora as a significant conduit for transferring knowledge and expertise back to Syria in the future.

Gulf Countries: Large-Scale Investments, Sparse Data

No comprehensive official data exists on the size of Syrian investments in the Gulf, as most countries do not disaggregate investment figures by nationality. Nevertheless, economists estimate Syrian investments in the region in the billions, especially in real estate, tourism, industry, and financial services.

Saudi Arabia hosts approximately 449,000 Syrians. According to Khalid Al-Khathaf, CEO of the Saudi Investment Promotion Authority, Syrian investments in the Kingdom totaled 8.4 billion SAR (roughly $2.24 billion) in 2023, primarily in industry, construction, trade, and professional services.

In the UAE, over 242,000 Syrians live and work, according to the Associated Press. While no official figures are available, the Syrian community is visibly active in services and entrepreneurship within one of the region’s leading financial and commercial hubs.

In Kuwait, 146,000 Syrians reside, most having arrived before 2011 suggesting long-term economic stability in sectors such as services and freelance business.

In Qatar, the Syrian population has grown from 35,000–39,000 in 2011 to over 64,000 by 2024, according to the Syrian embassy. They are mainly active in education, construction, hospitality, and food services.

United States and Canada: Financial Power and Investment Networks

In the United States, the Syrian diaspora wields substantial financial influence. Issam Greewati, president of the Damascus Chamber of Commerce, told Independent Arabia that Syrian wealth and investments in the US amount to roughly $25 billion.

This financial muscle could play a pivotal role in future infrastructure projects. Complementing this is the formation of the Syrian-American Business Council, established by the Ministry of Economy and Industry to foster trade ties and economic cooperation between the two countries.

While no exact figures exist for Canada, estimates suggest tens of thousands of Syrians reside there, many of them highly educated, including entrepreneurs and investors providing another potential link for knowledge transfer and investment.

How Can Expatriates Support Syria’s Economy?

In recent years, remittances from Syrians abroad have served as a crucial lifeline, helping to stabilize local consumption amid economic collapse and widespread poverty. According to the news outlet Al-Hasriyya, remittances have totaled nearly $4 billion since the regime’s fall providing vital liquidity and stimulating demand.

However, this support has largely remained short-term and consumption-driven, without evolving into sustainable developmental leverage.

The next phase requires a qualitative shift from remittances for daily needs to productive investment and long-term economic stability. One of the most impactful pathways is relocating businesses (in part or full) to Syria or gradually returning to the country. The resettlement of even a segment of the diaspora would increase local demand for housing, goods, and services revitalizing domestic markets.

Moreover, the creation of small and medium-sized enterprises (SMEs) factories, workshops, service firms would directly boost domestic production, reduce import dependency, and build a more robust industrial and service base. This, in turn, would generate new employment opportunities, both directly and across supply chains, playing a key role in reducing unemployment and fostering social stability.

Beyond capital, expatriates can also transfer knowledge and skills acquired abroad from modern management and technology to quality standards, institutional culture, and work ethics. These can be brought in through direct return or via remote partnerships, training, and virtual management, without requiring immediate mass repatriation.

The Role of Business Councils

Business councils serve as vital organizing platforms. Entities such as the Syrian-Saudi Business Council, the Syrian-American Business Council, and counterparts in France, Turkey, Britain, and Canada do more than facilitate networking. They also play a strategic role in:

• Channeling remittances and capital into productive ventures

• Easing business transfers and minimizing investment risks

• Building trust between domestic and diaspora stakeholders

• Linking Syria’s economy to international markets and partners

Ultimately, remittances alone do not fulfill the diaspora’s potential. Only through investment, knowledge transfer, and eventual resettlement can Syrian expatriates become a genuine engine for economic revival and a cornerstone of rebuilding the country’s economy on sustainable, balanced foundations.

What’s Needed?

Despite the diaspora’s vast financial and human capital, their contribution to Syria’s recovery hinges on a clear and reliable legal and institutional environment. Legal reform is thus an essential prerequisite to unlocking these opportunities.

Talal Hilali, head of Syria’s Investment Authority, stated that the country is drafting a new investment law to protect foreign investors’ rights and offer broad incentives including full tax exemptions in some sectors.

If implemented transparently and consistently, this could be a game-changer in encouraging Syrians abroad to bring back their businesses or launch new ventures, especially in high-value sectors.

Equally important are administrative simplification and streamlined investment oversight. No matter how much capital an investor possesses, they need a clear and efficient pathway to register their business, secure ownership rights, and repatriate profits without falling into bureaucratic traps or regulatory confusion.

Beyond capital, returning talent and skilled labor is vital. Creating a stable work environment, offering professional incentives, and easing the return of experts in fields like industry, technology, management, and healthcare would boost productivity and accelerate knowledge transfer.

Another viable model is establishing investment funds or joint-stock companies to spread risk and enable wider participation. These vehicles could open share offerings to both domestic citizens and diaspora investors helping pool resources into strategic sectors like infrastructure, agriculture, and manufacturing.

Finance Minister Mohammad Yasser Bernia has also hinted at restructuring public-sector enterprises into shareholding companies, with unviable ones to be merged or liquidated. This approach opens the door to new partnerships between the state, the private sector, and the diaspora allowing expatriates to play a direct role in reshaping Syria’s economy, rather than simply supporting from afar.

The resumption of operations along the Kirkuk–Ceyhan oil pipeline marks a pivotal moment in the regional energy landscape. It comes at a time when Iraq’s economy is facing structural challenges, and its impact extends far beyond oil and commerce—it is reshaping political and security dynamics among Baghdad, Erbil, and Ankara.

For more than half a century, the Kirkuk–Ceyhan pipeline has been more than a conduit for crude; it has mirrored the shifting tides of regional politics—from nationalizations and wars to sanctions and internal divisions. Despite repeated shutdowns, sabotage, and revivals, the pipeline has stood as a testament to how geography and economic necessity can impose continuity in one of the world’s most volatile regions.

An Economic Lifeline

The renewed flow of oil through Kirkuk–Ceyhan provides critical support to Iraq’s revenue stream, especially given the state’s heavy reliance on oil to finance its national budget. It also eases pressure on southern export routes and gives Baghdad greater flexibility in managing its oil exports.

For the Kurdistan Region, the pipeline’s return is a double-edged sword. On one hand, it enables the resumption of oil exports after a crippling halt that damaged the local economy and hampered the region’s ability to pay salaries and fund public services. On the other, it recalibrates the legal and political relationship with the federal government, reducing the autonomy that Erbil had enjoyed in recent years.

Turkey, meanwhile, views the pipeline’s reactivation as an opportunity to cement its role as a key hub in the regional energy network. It also boosts its negotiating leverage with Iraq, the EU, and global energy firms. Internationally, the restart reflects growing concern over securing energy supply amid geopolitical turbulence.

Political and Economic Origins of the Kirkuk–Ceyhan Pipeline (1958–1979)

The Kirkuk–Ceyhan pipeline was never merely a technical venture it was born of sweeping political and economic shifts in Iraq and Turkey starting in the late 1950s. Following Iraq’s 1958 revolution, Baghdad pursued greater sovereignty over its oil resources.

At the same time, Turkey was grappling with repeated failures to find domestic oil and felt isolated, particularly after the U.S. response during the 1964 Cyprus crisis. These pressures drove Ankara to seek stable energy sources, drawing it closer to oil-rich neighbors chief among them, Iraq.

This rapprochement culminated in a 1965 trade agreement that made Iraq a key market for Turkish exports, and Turkey a primary buyer of Iraqi oil. After Syria shut down the Kirkuk–Baniyas pipeline in 1967 amid the war, Baghdad reassessed its export options and viewed a direct route through Turkey as a safer, politically less costly alternative.

In 1967, Iraqi President Abdul Rahman Arif visited Ankara, resulting in a preliminary agreement to construct a pipeline linking Kirkuk to the Mediterranean port of Ceyhan. Exports began via rail in 1968, and by the early 1970s, Iraq was supplying nearly 75% of Turkey’s oil imports. However, political instability in both countries delayed pipeline construction.

Iraq’s nationalization of the Iraq Petroleum Company’s concessions on June 1, 1972, revived the project. It granted Baghdad greater control over its resources and motivated it to accelerate efforts to find export routes outside the grip of Western firms or regional alliances. Turkey, in turn, supported the move and entered direct talks.

On May 1, 1973, Iraq’s National Oil Company and Turkey’s state oil firm signed a protocol to build a pipeline with an initial capacity of 500,000 barrels per day (bpd), expandable in the future.

Stretching nearly 600 miles, the pipeline runs from Kirkuk through Diyarbakir to the port of Ceyhan. Baghdad agreed to pay a transit fee of 35 cents per barrel and supply Turkey with preferentially priced oil for domestic use.

But the 1973 Yom Kippur War and the ensuing Arab oil embargo upended expectations. Oil prices quadrupled, Turkey couldn’t afford the new costs, and Iraq, needing funds, refused to grant concessions. Disputes over pricing and transit fees led to a temporary halt.

The project resumed in April 1975. Iraq completed its portion in September 1976, and Turkey followed in December. The line officially opened in January 1977, though flows remained below capacity just 160,000 bpd compared to the planned 500,000 due to financial disputes, Turkey’s delayed payments, and disagreements over water rights on the Euphrates.

In December 1977, Iraq suspended pumping entirely over Turkish debts of roughly $230 million. The impasse lasted until August 1978, when the two sides reached a barter deal involving cash payments and agricultural and industrial goods. This salvaged the oil relationship just as prices spiked after Iran’s revolution.

The Pipeline’s Golden Decade (1980–1990)

Despite the Iran–Iraq war’s early strains, the Kirkuk–Ceyhan pipeline performed strongly after 1981, as global oil prices declined. By 1982, with Iraq’s Gulf export terminals under Iranian blockade, Kirkuk–Ceyhan became Baghdad’s primary indeed, only export outlet.

Baghdad and Ankara invested in doubling capacity. A parallel line was built, boosting total throughput to 1 million bpd, later raised to 1.5 million bpd by 1988, making it the largest pipeline system in the Middle East at the time.

Sanctions and Slow Decline (1990–2003)

From 1977 to 2003, Kirkuk–Ceyhan enjoyed remarkable continuity, facing only one total shutdown between 1991 and 1996, when Turkey enforced UN sanctions following Iraq’s invasion of Kuwait.

Exports later resumed under the Oil-for-Food Program but never returned to pre-sanctions levels. The real rupture came after the 2003 US-led invasion. Coalition forces bombed Iraq’s IT2-A pumping station north of Baiji, and insurgents launched repeated attacks on oil infrastructure.

Erbil’s Independent Exports and Baghdad’s Backlash

After 2003, legal deadlock over a national hydrocarbons law allowed the Kurdistan Regional Government (KRG) to exert de facto control over northern oil. In 2007, the KRG passed its own oil and gas law, formed local companies, and signed dozens of contracts with foreign firms without Baghdad’s approval. The central government deemed these moves unconstitutional.

Starting in 2013, the KRG began exporting oil independently through Turkey. This revenue stream was crucial for the region, but it sparked a constitutional and political crisis. Baghdad accused Ankara of violating the 1973 Kirkuk–Ceyhan treaty, which mandates federal oversight of exports through Turkish territory.

The rise of ISIS in 2014 further disrupted development projects and foreign investment. Divisions deepened within the Kurdish political landscape, with the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) accusing each other of mismanaging oil revenues.

The 2023 Shutdown and Legal Dispute with Turkey

Despite Baghdad’s objections, the KRG continued its independent exports. Tensions peaked in 2022, when Iraq’s Supreme Federal Court annulled the KRG’s 2007 oil law, invalidating contracts with international companies.

This led to a legal battle in the International Chamber of Commerce, where Baghdad sued Turkey in 2014 for facilitating unauthorized exports. In March 2023, the court ruled in Iraq’s favor, ordering Turkey to pay $1.5 billion in damages. Oil flows through the Kirkuk–Ceyhan line were halted.

At the time of closure, the line was transporting about 500,000 bpd—far below its 1.5 million bpd capacity. The halt cost the KRG billions, paralyzed salary payments, and hurt SMEs. Baghdad, less dependent on the line due to southern ports, suffered less. According to the Kurdistan Oil and Gas Association, Iraq’s total losses exceeded $35 billion.

After negotiations involving Baghdad, Erbil, Ankara, and international oil firms, Iraq resumed exports through Kirkuk–Ceyhan in September 2025, ending a two-and-a-half-year hiatus.

Under the new framework, Iraq’s SOMO now manages exports, with the KRG receiving a share of revenues. Turkey, in turn, tied future deals to expanded cooperation on gas, electricity, petrochemicals, and possibly water resources.

Initial flows restarted modestly at 200,000 bpd. Still, the political symbolism was significant. Turkish Energy Minister Alparslan Bayraktar called it the dawn of a new energy partnership with Iraq and set July 2026 as the deadline for a comprehensive agreement.

Iraqi Oil Minister Hayan Abdul-Ghani emphasized the goal of boosting revenues and stabilizing flows. KRG Prime Minister Masrour Barzani called the gas resumption a historic achievement.

Economic Implications of the Kirkuk–Ceyhan Restart

Resuming the pipeline has broad economic implications. It not only increases export volume but also reshapes Iraq’s economic architecture and federal-regional relations, intertwining local, Turkish, and international interests.

Iraq: Export Flexibility and Revenue Stability

Economic pressure drove Baghdad and Erbil toward compromise. Between September and December 2025, more than 13 million barrels flowed through the line. Iraq currently exports 4 million bpd, mostly via Basra. Kirkuk–Ceyhan offers an alternative route to Europe, relieving southern pressure and enhancing Baghdad’s flexibility.

Political analyst Yassin Aziz called the restart a breakthrough after 18 years of stalled negotiations. While flows currently hover at 200,000 bpd, there is optimism about rising to 400,000. Aziz stressed the need for a national energy law to clarify jurisdiction and prevent future disputes.

Kurdistan: Recovery Under Federal Oversight

The years-long shutdown dealt a major blow to the KRG, crippling salary payments and shrinking activity in agriculture, industry, and tourism. It also fueled illegal oil smuggling.

Now, the region can resume paying overdue salaries and fund essential services. Yet the KRG can no longer manage exports independently. It must channel revenues to the federal treasury a historic shift toward unified oil policy after two decades of constitutional disputes.

Turkey: From Transit Fees to Strategic Leverage

For Turkey, the pipeline’s return is both financially lucrative and geopolitically valuable. Economically, Ankara benefits from transit fees—about $1.5 per barrel—netting $250–300 million annually. Port operations at Ceyhan add another $365 million. Turkey has invested billions in rehabilitating pipeline infrastructure and is now pushing for a more comprehensive and profitable deal.

Strategically, Kirkuk–Ceyhan cements Turkey’s role as a key conduit between Middle Eastern oil producers and European markets. It enhances Ankara’s leverage in dealings with the EU and energy giants while reinforcing its regional influence. Though Turkey consumes only a fraction of Kirkuk oil, the pipeline mainly serves European nations like Italy, Spain, and Greece.

Ankara’s eagerness to reopen the line reflects its awareness of its strategic importance, especially after a two-year closure amid Erbil–Baghdad tensions.

Regional and Global Reactions

Amid volatile prices and global competition over secure export routes, Kirkuk–Ceyhan’s resumption has wider geopolitical implications. Its 40- and 46-inch twin lines have a combined capacity of up to 1.5 million bpd about 2.5% of global oil demand.

Iran has responded with tactical caution. While it doesn’t oppose higher Iraqi exports outright, Tehran is wary of arrangements that could expand Turkey’s role.

Washington, in contrast, welcomed the agreement, viewing it as a blow to Iran’s access to discounted Kurdish oil, which Tehran resold at inflated prices. The pipeline also enables international firms to operate under Iraq’s federal legal framework, avoiding regional entanglements.

The US State Department praised the Baghdad–Erbil–Turkey–IOC accord, noting US facilitation.

Russia, meanwhile, aims to bolster its role in Iraq’s energy sector. Russian firms are reactivating operations in Kurdistan and seeking investment opportunities.

Researcher Hamzeh Haddad emphasized the American interest in curbing illegal Kurdish oil flows to Iran and revitalizing halted oil projects. The US sees the pipeline as a tool to counter Iran’s regional clout.

Nonetheless, obstacles remain from financial and legal uncertainties to ongoing drone attacks on Kurdistan’s oilfields, reportedly by Iran-backed militias.

Federal courts have also questioned the validity of KRG-signed deals with majors like Total, QatarEnergy, BP, Chevron, and Hong Kong-based firms deals worth tens of billions. These companies now seek legal clarity.

Ultimately, the Kirkuk–Ceyhan restart reflects a shared desire among Baghdad, Erbil, Turkey, and international stakeholders to stabilize oil exports and rebuild trust. The move may mark a turning point in Iraq’s energy saga, and a step toward overcoming decades of political discord.

Reforestation campaigns have emerged as a central feature of Syria’s environmental response, representing one of the most prominent local efforts to restore green cover after years of extensive ecological degradation. Syria’s forests and trees were among the casualties of war, subjected to repeated wildfires, widespread deforestation, drought, and a sharp decline in irrigation and maintenance.

Following the collapse of Bashar al-Assad’s regime, several Syrian regions launched a variety of tree-planting initiatives under banners such as “Our Countryside is Green,” “A Tree for Every Soldier,” and “Together to Restore Idlib’s Greenery.”

These campaigns have spanned cities including Damascus, Quneitra, Deir ez-Zor, Hama, Aleppo, and Latakia, aiming to plant hundreds of thousands of saplings.

Overseen by a diverse mix of government bodies, ministries, provincial authorities, environmental directorates, civil society organizations, local associations, volunteer teams, and grassroots initiatives, these efforts have mainly targeted forest areas, city entrances, and highway medians.

According to the data accompanying these projects, the campaigns seek to improve the local environment, restore ecological balance, expand green spaces, and enhance forest cover.

This report examines the state of Syria’s reforestation efforts in terms of sapling varieties, overseeing bodies, types of land targeted, the campaigns’ environmental impact, the challenges they face, and their potential to revive the country’s green cover.

A Depleted Ecosystem

Over the past 14 years, Syria’s vegetation has experienced a steep decline, particularly its forests and trees. This deterioration stems from a complex combination of factors: drought, illegal logging, frequent wildfires, government neglect, overgrazing, and military operations. Fruit-bearing trees, especially olive trees, have suffered the most.

In Daraa Governorate in the south, olive trees numbered around six million across 30,000 hectares in 2010. By 2023, the number had halved to three million, with cultivated land shrinking to approximately 22,901 hectares. In Idlib, an estimated 1.5 million olive trees have been lost in recent years.

A report by the Conflict and Environment Observatory (CEOBS) revealed that Syria lost about 3,505 hectares of forest in 2020 alone a 159% increase compared to 2019. Nearly 20% of the country’s forests have disappeared since 2000.

The coastal provinces of Latakia and Tartus, which together contain over three-quarters of Syria’s forested areas, have seen repeated fire outbreaks. Between 2010 and 2018, wildfires consumed over a quarter of Syria’s forests, with more than 2,000 fires recorded, affecting over 100,000 hectares along the coast. From 2021 to 2024, 83% of the tree cover in Syria’s natural forests was lost, amounting to roughly 6,100 hectares.

In July 2025, wildfires once again swept through Latakia and Tartus, directly and indirectly affecting about 50,000 people and 127 villages. More than 18,000 hectares of farmland and forests were damaged, along with 117 irrigation systems and 202 beehives, while over 150,000 trees were lost.

Reforesting Syria’s War-Scarred Terrain

Over the past two months—and continuing still—reforestation activities have intensified, aligning with Syria’s tree-planting season, which typically begins with the first rains and stretches from November to February. During this window, moist soil and moderate temperatures offer optimal conditions for saplings to take root. However, these dates vary depending on local climate, frost severity, and plant species.

According to a survey by Noon Post, the most notable reforestation campaigns across Syria include:

• Rural Damascus – “Our Countryside is Green”: 500,000 saplings

• Idlib – “Together to Restore Idlib’s Greenery”: 350,000 saplings

• Multiple governorates – “A Tree for Every Soldier”: 200,000 saplings

• Damascus – “Damascus is Green and Will Remain So”: over 100,000 saplings

• Aleppo: 50,000 saplings

• Latakia (Basit and Beit Halibiyeh sites): 10,000 saplings

• Quneitra: 7,000 saplings

• Hama – “Our Streets are Green”: 7,000 saplings

Other tree-planting activities were organized to coincide with public events and community-driven initiatives, with saplings planted along city roads, in parks, schools, and universities. These involved volunteer teams, students, faculty, and local residents. In Hama’s countryside, the Al-Ghab Development Authority continued its work on the afforestation of Karakat Forest, though the number of trees planted remains undisclosed.

Idlib’s Director of Agriculture, Engineer Mustafa Al-Muwahhid, stated that by December 28, 2025, the reforestation campaign had planted around 120,000 olive saplings and 2,000 forest saplings, with a goal of reaching 200,000 olive trees and 150,000 forest trees across areas like Kafr Nabl, Khan al-Sabil, Harem, Khan Sheikhoun, and the Idlib-Saraqib road.

Rural Damascus Governor Amer al-Sheikh explained that the “Our Countryside is Green” campaign aims to beautify city entrances, plant both forest and fruit trees, and distribute saplings to farmers, thereby supporting the national economy and improving the province’s environmental conditions.

Campaign director Abdulrahman Ghabis noted that the initiative seeks to plant 500,000 saplings in 45 days across much of Rural Damascus. However, he acknowledged that this remains “a small part” compared to the extensive environmental damage, with losses estimated at 8 million seedlings. The campaign relies on collaboration with local communities, farmers’ associations, and municipalities for sapling distribution.

The Syrian Ministry of Defense’s media office told Noon Post that the “A Tree for Every Soldier” campaign uses carefully selected forest and native species tailored to each region’s climate and environmental conditions to ensure high survival and sustainability rates. The campaign spans the country, with particular focus on areas devastated during the war, especially damaged forests, in an effort to restore vegetation and ecological balance.

In this phase, the campaign aims to plant over 200,000 trees as part of a broader effort to rehabilitate nature destroyed by the former regime, raise environmental awareness, and link military service with national and humanitarian responsibility.

The Defense Ministry, in coordination with the Agriculture Ministry, oversees the care and sustainability of these plantings, under the direct supervision of Defense Minister General Marhaf Abu Qasra. The campaign launched from the hills of Kabina symbolic of destruction and rebirth as the starting point for a nationwide journey to restore life to the land and affirm that protecting the homeland includes safeguarding its environment and future.

According to Majd Suleiman, Director of the Forestry Department at the Agriculture Ministry, the campaigns primarily plant bay laurel, stone pine, eucalyptus, and carob, alongside species adapted to local conditions. They target fire-damaged and encroached areas, as well as city entrances and main roads.

He identified key challenges: protecting newly planted trees from trespassing, wildfires, and overgrazing, as well as water scarcity and harsh climate conditions. Reforesting remains a priority due to forests’ environmental, industrial, climatic, and aesthetic value.

Forest Rehabilitation and Campaign Viability

Amid Syria’s ongoing humanitarian crisis, concerns persist about the continued logging and deforestation, casting doubt on whether current reforestation campaigns can meaningfully address the vast ecological damage or restore destroyed forests.

The Ministry of Agriculture told Noon Post that the campaigns contribute to restoring damaged areas and increasing vegetation density. It outlined several steps to rehabilitate degraded forests:

1. Full protection for areas affected by medium-intensity fires, allowing natural regeneration via seeds or underground parts like bulbs and rhizomes.

2. Intervention in severely burned areas through dispersal of native seeds from nearby regions to restore dominant species.

3. Expert assessment of burned sites by technical committees to determine best rehabilitation methods, including whether to protect without intervention or proceed with reforestation, while preventing soil erosion and promoting vegetation recovery.

4. Prevention of invasive species in forest sites per forestry regulations.

5. Seed collection from burned and nearby sites to preserve Syria’s native genetic traits.

To combat illegal logging, the Ministry is increasing the number of forest guards and enforcement officers. It also provides citizens with about 80% of the firewood produced from forest thinning and development at subsidized rates, and has issued permits and licenses to ease legal wood harvesting, helping curb illegal activities.

Agricultural engineer Anas Abu Tarboush told Noon Post that for reforestation campaigns to succeed and meaningfully revive Syria’s green cover particularly in forested and damaged areas they must be integrated into a national plan.

This includes supporting farmers with fruit trees, rebuilding forests, fostering environmental education in schools and universities, and establishing long-term plans to protect new plantings.

He stressed that selecting the right timing and climate-compatible species is essential, along with community involvement and consistent technical and financial support. He also recommended learning from neighboring countries’ unconventional reforestation methods, such as aerial seed dispersal in mountainous regions, and called for stricter measures to prevent illegal logging.

The deployment of South Sudanese forces in the Heglig oil field based on an agreement between the Sudanese army and the Rapid Support Forces (RSF) has stirred controversy. But the implications extend far beyond the immediate uproar: this development could set a precedent for neighboring countries to intervene directly in Sudan’s affairs.

The forces were deployed in Heglig, located near the border between Khartoum and Juba, after the RSF seized control of the area on December 8, following a full withdrawal by the Sudanese army, which relocated with all its equipment to South Sudan.

Juba relies on a central processing facility in Heglig that handles 130,000 barrels of oil produced in South Sudan and exported via pipelines owned by Sudan to the port of Port Sudan in the east for which Sudan receives transit fees. The Heglig field contains about 75 oil wells.

The agreement allowing South Sudanese troops into Heglig stipulates the neutralization of the field from military operations, protection of the oil infrastructure from destruction, and uninterrupted oil flow without specifying a timeframe for the presence of foreign forces on Sudanese soil.

This deployment, coupled with the quiet overlooking of South Sudan’s past ambitions having occupied the region briefly in 2012 marks a pivotal moment in Sudan’s ongoing conflict. It constitutes the first overt foreign intervention that shifts control of national resources from the central government to the forces dominating the ground.

This initial erosion of Sudan’s sovereignty through an agreement to safeguard oil installations could pave the way for similar concessions to other neighboring countries with vested interests such as Egypt, Ethiopia, and possibly Chad and the Central African Republic under pretexts ranging from securing economic assets and borders to protecting national security.

From Secrecy to Open Intervention

While neither the Sudanese army nor the RSF has publicly disclosed the details of their agreement with South Sudan, their tacit approval highlights a shared interest in safeguarding revenue sources despite the ongoing battles in regions like West Darfur and South Kordofan.

This approval, however, does not signify political rapprochement or an attempt to rebuild trust. The Sudanese government still insists on the complete withdrawal of RSF fighters from urban areas, their disarmament under international supervision, and their regrouping in agreed-upon camps ahead of disarmament and reintegration alongside holding perpetrators of crimes accountable. Thus, the agreement seems focused purely on securing financial lifelines.

The United Nations has criticized both the army and the RSF for prioritizing revenue preservation over civilian protection. It has also voiced concern over the growing instability along the Khartoum-Juba border due to militia movements, warning that the conflict’s increasingly complex and regionalized nature could draw Sudan’s neighbors into the fray if left unaddressed.

The silence surrounding the South Sudanese troop deployment may suggest it is seen as the lesser of two evils. RSF control over oil fields producing 20,000 barrels per day strengthens its hand. But more significantly, Sudan’s resources from oil to water and borderlands are now bargaining chips, pushing foreign intervention into the open, no longer hidden or officially denied.

The UAE has consistently denied providing support to the RSF, including shipments of advanced weaponry and equipment delivered via Nyala airport, makeshift airstrips in Darfur, Chad, and eastern Libya despite extensive investigative reporting supported by concrete evidence.

Ethiopia’s Calculated Involvement

Ethiopia’s initial foray into Sudan’s conflict began with its allowance of military training for RSF fighters and SPLM-North forces loyal to Abdelaziz al-Hilu its ally within the “Tasis” coalition, which includes armed, political, and civil groups. These trainings occurred on Ethiopian soil with a continuous supply line.

The SPLM-North is positioned in a narrow strip of Blue Nile State bordering both South Sudan and Ethiopia. After suffering military defeats, the RSF regrouped in this area, turning it into a staging ground for future offensives.

According to Sudanese sources cited by Al Jazeera, Ethiopia established training camps for the RSF and foreign mercenaries from South Sudan and Colombia to launch attacks on Blue Nile. Addis Ababa is reportedly coordinating with the RSF through regional allies, managing supply lines, constructing training camps, and building airstrips.

Sources indicate intelligence coordination between the Ethiopian military, the RSF, and SPLM-North forces led by Joseph Tuka along the Sudan–South Sudan border. Weapons, combat gear, and logistics support flow to the RSF and its allies via Ethiopia’s Benishangul region, the site of the Grand Ethiopian Renaissance Dam (GERD).

These developments suggest that Ethiopia is preparing the RSF to open a new front in Blue Nile to protect its interests around the GERD, putting pressure on both Khartoum and Cairo. Any threat to the nearby Roseires Dam in Sudan, critical to Egypt’s water security given the Blue Nile’s role as a key Nile tributary, raises serious concerns in Cairo.

Egypt perceives any Ethiopian-backed RSF advance into Blue Nile as a direct threat to its water security. This has prompted increasingly stern rhetoric and a declared readiness to act if necessary.

During Sudanese army chief Abdel Fattah al-Burhan’s visit to Cairo on December 18, Egypt released a statement asserting its right to take “all measures permitted under international law and the Joint Defense Agreement” with Sudan to protect its red lines.

These red lines include preserving Sudan’s territorial integrity and unity, preventing any secession, and safeguarding the state’s institutions.

Signed in 1976, the Egypt–Sudan Joint Defense Agreement aims to coordinate military efforts and ensure mutual security. It was updated in 2021 to include joint training, border security, and military cooperation, according to Mada Masr.

The Future of Foreign Intervention

The entry of South Sudanese forces under the guise of infrastructure protection without a clear political framework or a timeline underscores how Sudan’s war has ceased to be a purely domestic matter. Countries are no longer reluctant to intervene openly.

Similarly, Ethiopia’s ambitions go beyond defending its dam project, as it seeks near-total control over the Blue Nile through its local allies preparing for a fresh offensive. This dynamic will likely prompt Egypt to escalate its support for the Sudanese army, potentially leading to direct intervention.

In the past, RSF leader Mohamed Hamdan Dagalo (“Hemedti”) accused Egypt of bombing his forces in Jabal Muya, where the RSF had set up a base to launch an attack on Sennar a city hosting the Sennar Dam. Though he soon recaptured the area, the RSF’s rapid collapse in Blue Nile, Gezira, and Khartoum followed.

Egypt is now expected to continue supporting the army with political backing, intelligence, weapons, and limited airstrikes paving the way for a formal military intervention should Ethiopia persist in hosting RSF forces and allowing its territory to be used for attacks on Blue Nile.

Sudan has already become a battleground for competing factions, with control of cities and economic resources increasingly fragmented. The conditions are now ripe for the legitimization of regional intervention, as the state steadily loses its grip on border regions, oil fields, and even some gold mines that fuel the conflict.

None of Sudan’s actors military or political appear willing to set aside their disputes, even temporarily, to preserve the country. As the war continues, Sudan risks becoming an open arena for regional power plays, with little regard for the humanitarian cost.

Now that foreign intervention has shifted from covert to overt, and with no signs of peace in sight, neighboring countries are redrawing the map of influence potentially redrawing borders as well.

Tensions between the United States and Venezuela have entered a new phase of escalation, as Washington moves from threats of economically suffocating Caracas to concrete measures on the ground. This comes amid the Trump administration’s accusations that President Nicolás Maduro’s government is operating as a “foreign terrorist organization” posing a threat to American security and stability.

On December 16, former President Donald Trump announced a sweeping blockade on all sanctioned oil tankers entering or leaving Venezuela. In a post on his platform “Truth Social,” Trump claimed Venezuela is now “completely surrounded by the largest naval fleet ever assembled in South American history.”

He insisted the blockade would remain in place until Caracas returns “all the oil, land, and other assets,” marking an unprecedented intensification in Washington’s rhetoric toward the Venezuelan government.

The U.S. measures imposed in the Caribbean, along with the deaths of more than 100 Venezuelans accused of drug trafficking, have given rise to what some are calling “Venezuelan oil traps.” These actions haven’t only impacted targeted vessels but have also sent shockwaves through the entire maritime shipping system, disrupting supply chains, paralyzing trade routes, and triggering widespread logistical paralysis.

In response to this logistical stranglehold threatening Venezuela’s economic lifeline, the Maduro government is being forced to adopt alternative tools and strategies to weather the blockade raising growing questions about its ability to escape Washington’s tightening grip.

Oil Traps: Crippling Maritime Movement

Washington is fully aware of oil’s central role in Venezuela’s economy. The country holds the world’s largest proven oil reserves estimated at 303 billion barrels, roughly 17% of the global total. Oil accounts for more than 90% of Venezuela’s export revenues and 80–90% of its foreign currency inflows, rendering the economy highly vulnerable to price fluctuations and external shocks.

Recognizing this, the Trump administration built its strategy on the premise of freezing Venezuela’s oil sector to erase it from the country’s economic map. This approach stems from a firm belief that cutting off this resource would destabilize the country internally and spark public unrest.

In practical terms, this strategy has led to a qualitative shift in Washington’s pressure tactics since August. Targeting oil has now taken precedence over conventional economic, financial, and administrative sanctions. December saw an unprecedented wave of interceptions targeting Venezuelan oil tankers in the Caribbean. U.S. authorities announced the seizure of a fully loaded supertanker carrying Venezuelan crude, along with two additional interception attempts over the past weekend.

Reuters described the seizure as the harshest blow dealt to Venezuela’s national oil company, PDVSA, since sanctions were tightened in 2019. Echoing this sentiment, U.S. Secretary of Homeland Security Kristi Noem said in a December 21 post on X that Washington would continue pursuing “illicit” oil movements that violate sanctions, claiming these activities fund “narcoterrorism” in the region.

The escalation didn’t stop there. Two days later, in an interview on “Fox & Friends,” Noem emphasized that Washington was not merely intercepting ships—it was “sending a message to the world that Maduro’s illegal activity is unacceptable and he must go,” reaffirming the U.S. commitment to defending its interests and people.

Counter-Strategies to the U.S. Blockade

To withstand mounting U.S. pressure, Venezuela through its national oil giant—is implementing a suite of tools and strategies aimed at keeping the Maduro government afloat. These efforts focus on sustaining oil production and circumventing sanctions. Three primary tactics stand out:

1. Tankers as Floating Storage Units
As Washington seeks to paralyze Venezuela’s oil exports, storage facilities are reaching capacity. This threatens to force PDVSA to shut down mature oil wells, a costly and risky move that could permanently damage output. To avert this, Venezuela has turned its tankers into high-cost floating storage units anchored in territorial waters. This allows production to continue, with the intent of eventually exporting oil via clandestine maritime routes.

2. The Shadow Fleet
Perhaps the most critical tool in Caracas’s arsenal is the so-called “shadow fleet”—a flotilla of aging, often unregistered tankers that flout international regulations. These vessels disable tracking systems and conduct ship-to-ship transfers in international waters to obscure the oil’s origin. The Venezuelan crude is often blended with other types to erase its fingerprint. Similar methods are used with Russian and Iranian oil.

Most of this crude ends up in China, taking advantage of vast oceanic routes that are difficult to monitor. Despite repeated seizures, some tankers manage to slip through. Data from Kpler, a firm that tracks energy shipments, shows that while exports haven’t ceased entirely, they’re experiencing severe logistical bottlenecks. Shipments are delayed, inventories are piling up, and sailing speeds have slowed dramatically.

3. Cryptocurrency Payments and International Support
Beyond maritime tactics, Venezuela increasingly relies on stablecoins like USDT to receive oil payments. This method bypasses the traditional banking system, reducing the risk of frozen assets and undercutting the U.S. dollar’s dominance in energy trade. While digital transactions are swift and cost-effective, they carry regulatory risks and market volatility.

Meanwhile, political and economic backing from countries like China and Russia remains vital. These nations see continued Venezuelan oil flows as strategically important, both for economic reasons and as a means to counterbalance U.S. influence in South America. They assist in re-exporting or blending the crude and falsifying documentation.

Targeting Internal Collaborators

In tandem with its international maneuvering, the Venezuelan National Assembly recently passed a new law criminalizing piracy, maritime blockades, and any form of support for such actions. Officially titled the “Law for the Protection of Navigation and Trade Freedoms Against Piracy, Blockades, and Other Unlawful International Acts,” the legislation aims to defend national sovereignty and economic interests from foreign interference.

The law stipulates prison sentences of 15 to 20 years for anyone involved in or facilitating maritime piracy, blockades, or surveillance of shipping activity. It also imposes fines of up to one million euros and allows for the confiscation of assets. Analysts view the legislation as primarily targeting opposition forces that support U.S. sanctions and regime-change efforts figures like María Corina Machado, who was recently awarded the Nobel Peace Prize.

In sum, while Caracas may be managing to resist the American blockade through a diverse array of creative strategies, it remains vulnerable to escalating risks and international scrutiny. The key question now is: how long can Venezuela sustain this resistance and what will be the long-term cost of its defiance?

As Israel celebrated what it described as a historic gas agreement with Egypt valued at $35 billion and hailed by Prime Minister Benjamin Netanyahu as a milestone another player was watching closely. Not as a distant observer, but as the deal’s biggest beneficiary.

That player is the American energy giant Chevron, which holds a dominant stake in the Leviathan gas field, the main supplier under the agreement. The deal guarantees the delivery of 130 billion cubic meters of Israeli gas to Egypt through 2040, further entrenching Chevron as one of the key power brokers shaping Israel’s energy landscape.

The Egyptian–Israeli agreement, concluded under American sponsorship, support, and pressure, once again cast the spotlight on Chevron as a major force in the global energy market. It also revived scrutiny of the company’s dense network of ties within Israel, particularly amid accusations of its involvement in the “genocidal war” waged by the occupation against the Gaza Strip over the past two years.

A Global Energy Giant

Chevron is a US-based multinational corporation and one of the world’s largest energy conglomerates. Headquartered in San Ramon, California, it operates in more than 180 countries. Its activities span the entire energy value chain, from oil and natural gas exploration and production to refining, marketing, and transportation, in addition to chemical manufacturing and power generation.

Founded in 1879 under the name Pacific Coast Oil Company by Charles N. Felton, Lloyd Tevis, and George Loomis following the discovery of oil in California, Chevron’s history has been marked by a series of major mergers. It merged with Standard Oil in 1900, Gulf Oil in 1984, Texaco in 2005, and most recently Noble Energy in 2020.

In 1984, the name Chevron was officially adopted following the breakup of Standard Oil under the Sherman Antitrust Act. The company became part of what was historically known as the “Seven Sisters” Exxon, Royal Dutch Shell, BP, Total, Gulf Oil, Eni, and Chevron which dominated the global oil industry in the early twentieth century.

By March 2020, Chevron ranked fifth on the Fortune 500 list, with annual revenues of $146.5 billion and a market valuation of $136 billion. It also placed 61st among the world’s largest publicly traded companies.

Chevron’s operations are divided into two main segments: exploration and production averaging around 3.1 million barrels per day in 2024 and refining and marketing of fuels and lubricants. Its key assets include oil and gas fields around the world, most notably Leviathan and Tamar in Israel, Tengiz in Kazakhstan, Gorgon in Australia, and the Permian Basin in the United States.

Close Ties to Trump

Former US President Donald Trump has maintained a close relationship with Chevron, despite occasional tensions in recent years over operating licenses in Venezuela. Several indicators point to the strength and mutual influence of this relationship.

Extensive financial support for the inauguration: Chevron was among the leading fossil fuel companies that contributed millions of dollars to finance Trump’s 2017 inauguration. It spearheaded an energy-sector fundraising drive totaling nearly $2 million, with Chevron alone contributing $525,000, making it one of the largest donors in the oil industry.

The company also participated in a broader fundraising campaign involving more than 1,500 corporations and individuals, raising a total of $107 million for the presidential inauguration committee more than double the amount raised for former President Barack Obama’s inauguration in 2009, which stood at $53 million.

Uninterrupted political backing: Multiple reports have documented Chevron’s involvement, alongside other oil companies, in financing US presidential elections from 2016 through 2024. The oil and gas sector, including Chevron, has overwhelmingly favored Republican candidates and Trump-aligned entities, reflecting a tightly interwoven network of interests.

During the 2023–2024 election cycle, Chevron donated $951,500 to Republicans, compared with $90,500 to Democrats. Indirect support for Trump’s campaign through the oil sector reached $14.1 million.

Backroom deals: According to an October 2024 investigation by The Guardian, the Trump administration struck direct deals with Chevron. During a dinner at Mar-a-Lago in Florida, Trump reportedly asked more than 20 executives from major oil companies, including Chevron, to raise $1 billion. In return, he promised—if re-elected—to roll back drilling restrictions, restore gas export approvals, and abolish vehicle pollution regulations. Democrats described the move as “the definition of corruption,” prompting a congressional investigation.

The Venezuela issue: In a subsequent move, Trump revoked Chevron’s license in Venezuela, portraying it as a concession to Venezuelan President Nicolás Maduro. He later restructured the license to limit cash transfers and imposed restrictions on oil tankers, significantly affecting Chevron’s operations. Eventually, however, the administration reached a compromise with the company to mitigate the fallout.

Israel’s Largest Gas Producer

Chevron owns roughly 40 percent of the Leviathan gas field and a quarter of the Tamar field, in addition to holding operational control over both. This effectively gives the company control over nearly 90 percent of gas reserves in the occupied entity, making it Israel’s largest gas producer.

Chevron supplies around 70 percent of Israel’s energy needs, including those of military bases and settlements. It fully operates both the Tamar field, which contains an estimated 10 trillion cubic feet of gas, and the Leviathan field. The company pays hundreds of millions of dollars annually in fees to Israel, with total payments reaching $820 million in 2023.

In February 2024, Chevron and its partners in the Tamar field announced a $24 million investment to boost natural gas production capacity from the offshore field. The investment is part of a two-phase plan aimed at increasing Tamar’s output to approximately 1.6 billion cubic feet per day, to meet Israel’s energy needs and supply gas exports to Egypt.

Financier of the Genocide in Gaza

According to reports, Chevron controls nearly 90 percent of gas reserves in Israeli fields and supplies about 70 percent of the occupied entity’s energy needs, including settlements, the military, and various political and security institutions.

On this basis, the global Boycott, Divestment, and Sanctions (BDS) movement has classified Chevron as a financier of “genocide and apartheid,” citing its role in supporting the occupation through energy supplies. The Israeli military and settlements rely on gas extracted by Chevron to target, kill, and displace millions of Palestinians.

Dozens of human rights organizations have accused Chevron of directly contributing to the financing of Israeli occupation policies and violations of Palestinian rights, particularly in Indigenous and marginalized communities across the developing world.

As the main extractor of natural gas in the eastern Mediterranean, the company generates hundreds of millions of dollars annually for Tel Aviv through licensing fees revenues that bolster Israel’s military budget and fund its apartheid system, settlement expansion, and military occupation.

In addition, Chevron supports Israel’s efforts to pressure Europe into constructing the EastMed pipeline, a massive fossil fuel infrastructure project backed by the European Union that is expected to exacerbate the global climate crisis.

Human rights groups also argue that the US energy giant is complicit in depriving Palestinians of sovereignty over their natural resources, including through the naval blockade on Gaza and the transfer of originally Palestinian gas to Egypt via pipelines that illegally traverse Palestine’s occupied exclusive economic zone.

These practices, they say, cost Palestinians millions of dollars in transit fees, in addition to losses resulting from Israel’s theft of this critical economic resource.

Despite Chevron’s public commitments to human rights and sustainability, organizations insist that the company is implicated in serious violations of Palestinian rights and in fueling apartheid and genocide, while simultaneously worsening the global climate crisis.

They have called on the international community to hold Chevron accountable for its role in supporting the Israeli occupation and deepening environmental catastrophes.

In July 2025, reports and UN-affiliated organizations listed Chevron among companies complicit in the occupation and the war on Gaza. The UN Special Rapporteur on the occupied Palestinian territories, Francesca Albanese, issued a report detailing the role of corporations—including Chevron—in supporting the occupation and the war on Gaza.

The report asserted that these companies form part of the mechanisms enabling Israel to displace Palestinians and commit grave violations of international law, and urged the international community to hold them accountable for their involvement in human rights abuses.

In March of this year, the global BDS movement, alongside several UN-linked organizations, called for a worldwide boycott of Chevron across all its operations, as part of a broader campaign targeting companies that support Israel.

It is worth noting that in September 2024, during a well-known annual cycling race held every summer in Portland, Oregon and attended by thousands of participants, one of the event’s organizing groups, known as “Molly,” accused Chevron not only of exacerbating the climate crisis and air pollution but also of contributing to what it described as genocide in Palestine.

“The community has remained silent on issues like Palestine,” the group said, “but it is not a distant place everything is connected to what you care about.”

All of this makes clear that Chevron has gone well beyond its traditional role as a global energy corporation. It has openly become an instrument of Trump, his administration, and the Republican Party in advancing US influence in the Middle East and securing exceptional advantages on the global energy map.

At the same time, Chevron has emerged as one of the main suppliers to the occupying entity, supporting it in a war of genocide and in settlement schemes carried out against the Palestinian people. In doing so, Chevron is no longer merely an economic partner it has become complicit in one of the most brutal genocides of the modern era.

Syria is undergoing a series of tax reforms encompassing income tax, sales tax, and customs duties, as part of a broader restructuring of fiscal policy aligned with the country’s economic recovery phase. These reforms seek to strike a delicate balance between securing sustainable public revenues and stimulating economic activity and investment.

This article examines Syria’s new tax system by comparing the new legislation with previous laws, placing it within a regional context, and analyzing its capacity to broaden the tax base and support recovery and reconstruction.

A New Tax Framework

Syria’s revamped tax framework reflects a broader shift toward rebuilding the financial system on simpler and more transparent foundations. It involves a simultaneous overhaul of income tax laws, sales tax legislation, and customs duties.

A holistic reading of these laws reveals that the reforms go beyond adjusting rates they extend to the very philosophy of taxation, collection mechanisms, exemption thresholds, and the central role of digitization in regulating economic activity.

Income Tax Law: Simplified Rates and a Broader Base

The new income tax law governs the taxation of natural and legal persons’ income from various economic activities in Syria including employment income, commercial, industrial, and service activities, as well as capital gains. The law introduces a more streamlined and unified approach compared to previous legislation, notably reducing the number of tax brackets and rates.

For employment income, a simplified progressive tax is applied:

• 6% on the first SYP 5 million of annual income,

• 8% on income exceeding that amount.

As for businesses and corporate entities, a 10% tax is levied on core productive and service sectors such as industry, education, healthcare, consulting, training, technology, and aviation as well as income from capital assets. Other sectors are taxed at a 15% rate.

This simplification is accompanied by a significant increase in the tax exemption threshold:
SYP 60 million of net annual income is exempt, for both individuals and legal entities. This shift is aimed at easing the burden on low- and middle-income earners while focusing the tax obligation on higher earners.

The law also introduces key economic exemptions, including:

• Agricultural income in all its forms,

• Dividends distributed by resident companies,

• Certain types of capital gains,

• Exports of locally produced goods and services,

• Income earned by non-resident investors from foreign sources.

A vital component of this framework is the institutionalization of electronic invoicing and digital linkage, intended to improve the accuracy of tax declarations and enhance financial documentation. Implementation mechanisms will be detailed in executive regulations.

Sales Tax Law: Organizing Indirect Taxation and Linking It to Invoicing

In parallel with income tax reform, the new sales tax law establishes a general tax on the sale of goods and the provision of services in Syria, whether domestic or imported. The tax burden is applied at the point of sale or service delivery.

Instead of a flat rate, the law adopts a tiered rate system, imposing:

• 5% on a wide range of essential goods and services,

• Higher rates of 10%, 15%, and up to 45% on luxury items or specialized goods and services.

Certain services such as air transport, hotels, restaurants, telecommunications, financial services, and insurance are taxed at varying rates depending on their nature.

Sales tax applies to:

• Locally produced goods at the point of sale,

• Imported goods at customs clearance,

• Services provided domestically or linked to the domestic market.

Electronic invoicing and digital integration are central tools for enforcement. The law aims to standardize accounting practices, enhance collection accuracy, and directly tie taxes to invoicing. It also abolishes previous sales tax legislation and takes effect at the beginning of the fiscal year following its issuance.

How Has Syria’s Tax Framework Changed?

A review of older Syrian tax laws versus the newly proposed drafts reveals a fundamental shift in the philosophy and mechanisms of taxation. The former system was marked by complexity, fragmented classifications, and inconsistent rates. The new framework seeks to establish a more simplified, consistent, and transparent structure—one based on lower rates, digital linkage, and an expanded tax base. This shift is evident in three main areas: income tax, sales tax, and customs duties.

Income Tax: From Multi-Tiered Complexity to a Clear, Streamlined Model

Under the old law (Law 24 of 2003 and its amendments), income tax operated through numerous brackets and categories. For wages and salaries, rates ranged from 5% to 15%, with many intermediate levels based on monthly income. In contrast, the new draft adopts a highly simplified model with only two brackets:

• 6% on income up to SYP 5 million annually,

• 8% on income exceeding that amount.

This marks a clear effort to lower rates, ease compliance, and reduce complexity.

For corporate tax, the previous system differentiated between partnerships and corporations, with progressive rates ranging from 10% to 35%, depending on legal structure and profit size.

The new draft shifts to an activity-based classification, imposing a 10% flat rate on key sectors like industry, education, healthcare, consulting, technology, and aviation, and 15% on other activities.

This shift from legal form to economic function reflects a move toward clarity, legal stability, and administrative ease.

The tax exemption threshold has also risen dramatically from SYP 3 million to SYP 60 million annually signaling a desire to reduce pressure on lower income groups and shift focus to higher earners.

Electronic invoicing, once a supplementary tool, now plays a central role. The new system mandates the use of approved accounting software and immediate digital connection with the tax administration to monitor liabilities and curb evasion.

Sales Tax: From Scattered Fees to a Unified, Structured Tax

Previously, Syria’s consumption tax system (under a 2015 decree) relied on disparate fees imposed on selected goods and services, collected at various stages customs clearance, domestic sales, or service provision with specific charges for gold, vehicles, and travel tickets.

The new draft introduces a unified sales tax model applied across most goods and services, at production, importation, or sale. It employs a rate structure ranging from 5% on essentials to 45% on luxury items. This makes taxation more predictable and aligned with modern international practices.

The new system also gradually replaces paper invoices and field audits with full digital integration. Electronic invoicing and real-time accounting linkage are now embedded in the law, enhancing traceability and reducing evasion.

Customs Duties: Simplified Calculation and Standardized Metrics

In tandem with tax reforms, Syria has overhauled its customs tariff structure. The updated schedule includes over 6,000 tariff items, and several additional fees previously imposed via internal circulars have been eliminated.

The old method of calculating duties based on a percentage of price in Syrian pounds has been replaced with a fixed dollar amount per unit (ton, liter, kg), using standardized codes.

According to the General Directorate of Customs, the new system has reduced duties by 50% to 60% compared to the previous structure, minimizing subjective assessments, simplifying compliance, and reducing the risk of corruption.

Syria’s Tax Rates Compared to Neighboring Countries

Evaluating Syria’s new tax system requires a regional lens. Comparing it to Lebanon, Jordan, Turkey, and Iraq offers context for assessing the competitiveness of its income and sales tax rates.

Syria’s new personal income tax applies:

• 6% on the first SYP 5 million in income,

• 8% on any excess.

These are considerably lower than in neighboring countries:

• Lebanon: up to 25%,

• Jordan: around 30%,

• Turkey: up to 40%,

• Iraq: around 15%.

For corporate taxes:

• Syria: 10% for core sectors, 15% for others,

• Lebanon: ~17%,

• Jordan: ~20%–35%,

• Turkey: ~25%,

• Iraq: ~15% with higher rates for the oil sector.

Syria’s sales tax, which could serve as a precursor to a VAT, begins at a 5% rate on essential goods lower than:

• Lebanon’s 11% VAT,

• Jordan’s 16% VAT,

• Turkey’s 20% VAT.
  Iraq lacks a comprehensive VAT system and applies selective taxes.

These comparisons reveal that Syria’s new tax structure leans toward lower-than-average regional rates, aiming to enhance economic competitiveness and reduce the tax burden during the recovery phase, with a focus on broadening the tax base instead of raising rates.

Will the New Tax System Succeed?

A legitimate debate exists over whether lowering and simplifying tax rates can actually increase public revenues. But this approach is rooted in the economic logic of broadening the tax base rather than overburdening a narrow segment.

From High Burden to Broader Compliance

The old system featured high nominal rates but low compliance due to widespread evasion, administrative corruption, and unpredictable assessments. This created a narrow tax base and unstable revenue.

The new system reduces rates and the cost of compliance in terms of time, legal risk, and administrative friction which improves voluntary declaration and expands the taxpayer pool, even if the per-person tax decreases.

This tax policy is part of a broader strategy to stimulate economic activity, enhance investment appeal, and increase fiscal predictability, encouraging both domestic and foreign investments in reconstruction. Syria’s Ministry of Finance has pledged to allocate a quarter of sales tax revenues to supporting industry and exports, linking tax reform to development rather than mere revenue generation.

Exemptions, Fairness, and the Social Contract

Another parallel debate surrounds tax exemptions and whether they shrink the tax base. In theory, yes but in practice, low-income groups were often already outside the effective base due to their inability to pay or symbolic assessments.

Exempting them today doesn’t significantly reduce real revenues; instead, it builds trust and enhances perceptions of fairness, which are vital in a post-war society facing deep socio-economic challenges.

The real tax base lies in the middle class and small and medium enterprises from freelancers and workshops to small businesses who represent most economic activity and employment. These groups were previously the least compliant.

Tax evasion was not always a moral failure; it was often a rational response to an unjust, arbitrary system with little service return and high administrative corruption. When compliance costs exceed the cost of evasion, the latter becomes a logical choice.

The new system seeks to reverse that logic by lowering compliance costs, increasing digital and legal risk for evasion, and enhancing perceived fairness.

This aligns with well-known economic principles, particularly the Laffer Curve, which posits that beyond a certain point, higher tax rates reduce total revenue by discouraging compliance.

Therefore, reducing excessively high or unfair tax rates may actually boost revenue by expanding the base, improving voluntary compliance, and formalizing economic activity. This reflects a view of taxation as a social contract, not merely a coercive extraction of resources.

Still, legitimate concerns remain. If these reforms are not implemented effectively due to digitization failure, ongoing corruption, or the continued exclusion of informal sectors—the reform goals could be undermined.

Finally, the system’s success hinges on fiscal viability: ensuring revenues cover planned public spending during the recovery and reconstruction period. Without that, lower rates may create funding gaps that will later be filled by regressive taxes or indirect fees. The key to success lies in balancing a broader base with fiscal sustainability, not in rate cuts alone.

The question of whether Syria qualifies as a “resource-rich country” has sparked ongoing debate across economic and public spheres alike. While Syria indeed possesses a diverse range of natural resources, a deeper economic analysis is required to understand what “resource richness” truly means and what factors determine a country’s ability to convert these resources into real financial value.

By examining production data, revenues, and consumption figures objectively, it becomes possible to assess Syria’s actual position relative to rentier states, and to form a clear picture of its economic prospects.

Natural Resources and the Population Factor

In public discourse, the term “resource-rich country” is often misunderstood and reduced to merely having oil, gas, or mineral reserves. In economic terms, however, resource wealth is not defined by what lies underground but by the market value these resources can generate when extracted and sold. A natural resource only becomes valuable if there is global demand for it and if it can be sold at a price significantly higher than its production cost.

Even this factor alone, however, does not suffice to classify a country as resource-rich. Economically, what matters is not the absolute value of the resource, but its per capita share the resource income relative to population size and financial needs. A resource that generates substantial revenue in a sparsely populated country may be entirely insufficient for a nation with a large population.

Thus, the notion of resource richness hinges on a balance between two elements: the realizable market value of a country’s resources and the population size it needs to support. The higher the market value and the smaller the population, the greater the state’s capacity to fund its expenditures using those resources.

This is what enables countries like Qatar or Kuwait to finance their governments almost entirely through oil and gas revenues despite having smaller reserves than other nations with far larger populations.

On the other hand, a country may have diverse and even valuable resources but still not be considered resource-rich if the market value generated per capita is too low to meet public spending needs through natural resources alone.

Diverse Resources, But Limited Abundance

A look at Syria’s natural resources prior to 2011 offers a detailed picture of its oil, gas, phosphate, and agricultural sectors not just in terms of their presence, but their actual market value.

By analyzing production, consumption, and net revenue, one can understand the real role each resource played in supporting the Syrian economy at that time.

These figures form the necessary foundation to evaluate whether Syria can compete or build a rentier economy comparable to resource-rich states.

Oil: Capacity and Revenues

Before 2011, Syria’s oil sector operated near its natural capacity and served as a major pillar of the national economy. Proven reserves stood at about 2.4 billion barrels, which, based on a price of $58.5 per barrel, equates to a present-day value of $140.4 billion.

Production averaged roughly 350,000 barrels per day or 127.75 million barrels annually with a market value close to $7.47 billion. Of this, around 200,000 barrels per day were refined domestically in the Homs and Baniyas refineries to supply the local market with gasoline, diesel, and fuel oil. This allowed Syria to export about 150,000 barrels daily generating an annual revenue of around $3.2 billion.

Domestic consumption, however, hovered at 300,000 barrels per day, necessitating the import of about 70,000 barrels daily due to limited refinery capacity. At the same price, this translated to an annual import bill of approximately $1.49 billion. The net annual oil income was thus around $1.71 billion, highlighting the sector’s vital role before the conflict.

Gas: Reserves and Revenue Potential

Natural gas also played a key role in Syria’s energy structure, complementing oil. Proven gas reserves were estimated at 240 billion cubic meters, with a market value of around $72 billion at an assumed price of $0.30 per cubic meter.

Syria produced about 30 million cubic meters of gas per day roughly 10.95 billion cubic meters annually with an estimated yearly value of $3.285 billion. Of this, domestic consumption was around 18 million cubic meters per day (6.57 billion annually), valued at $2 billion.

The exportable surplus around 12 million cubic meters per day amounted to 4.38 billion cubic meters annually, generating approximately $1.314 billion in yearly export revenues.

Phosphate: Vast Reserves, Underused Potential

Syria holds substantial phosphate reserves exceeding 1.8 billion tons, valued at about $234 billion based on a price of $130 per ton.

Annual production before 2011 was around 3.5 million tons, with only 600,000 tons used domestically. The country still had to import 40% of its fertilizer needs reflecting weak local manufacturing capabilities.

Nearly the entire phosphate output was exported in 2010, yielding about $455 million in revenue. Current plans aim to raise production to 6 million tons by 2026 and 10 million tons by 2027, potentially generating up to $1.3 billion annually, with markets such as China and India being key targets.

Agriculture: A Foundational Sector with Export Power

Before 2011, agriculture was a cornerstone of the Syrian economy, contributing about 17.6% to the country’s GDP in 2010 a testament to its role in employment, income generation, and economic activity.

In foreign trade, agriculture was crucial in supporting the balance of payments. Agricultural exports accounted for about 30% of total Syrian exports. With overall exports valued at roughly $8.8 billion in 2010, agricultural exports brought in around $2.6 billion annually.

This made agriculture not only a vital source of hard currency but also key to food security and rural employment a strategic sector that could serve as a foundation for future economic recovery.

The Numbers: A Non-Rentier Reality

These data points reveal that, despite their significance, Syria’s natural resources before 2011 lacked both the volume and market value to underpin a rentier economy. Combined net revenues from oil and gas amounted to no more than $3 billion annually, while phosphate and agricultural exports added only a few billion more placing total resource-driven income at about $6–7 billion per year.

Syria vs. the Gulf: An Unbridgeable Gap?

The stark contrast between Syria’s and the Gulf’s resources becomes evident when comparing production value per capita the key metric in assessing whether natural resources can fund a state’s budget.

Even with diverse resources, Syria’s output, value, and population size prevent it from following a Gulf-style rentier model.

In Saudi Arabia, with a population of 35 million, oil revenues in 2024 reached $223.3 billion — or roughly $6,400 per person. This is thanks to the Kingdom’s capacity to produce 3.277 billion barrels per year, backed by massive reserves of 259 billion barrels sold at high global prices. Oil alone covers Saudi Arabia’s government spending and produces significant fiscal surpluses.

Qatar, with just 3.3 million people, earned $132 billion from gas in 2024 about $40,000 per capita based on its vast reserves of 843 trillion cubic feet and annual production of 179.5 billion cubic meters.

By contrast, Syria’s oil and gas revenues before the war stood at $1.71 billion and $1.31 billion respectively, with phosphate adding $455 million and agriculture contributing $2.6 billion. Altogether, these resources generated under $7 billion an amount insufficient to cover the needs of a country with 20–22 million people, giving Syrians less than $300–350 per capita annually from all natural resources combined.

That figure is a far cry from the thousands or tens of thousands seen in the Gulf underscoring why Gulf states can fully fund their budgets through resources, while Syria, due to the nature and value of its resources and population size, cannot.

The core difference is not about having resources but about the wealth they generate per person. Gulf resources are high-value, high-yield, and low-cost. Syria’s, by contrast, are modest in value, limited in output, and unable to produce the necessary revenues to fund a large state budget.

Can Syria Fund Itself Through Resource Revenues?

A review of Syria’s 2010 state budget which stood at $16.55 billion shows just how limited the role of natural resources was, even in peacetime. Oil, gas, and phosphate revenues together did not exceed $4.3 billion annually, covering only about 26% of the total budget. The government thus had to rely heavily on taxes and other revenues to meet its obligations, demonstrating that Syria never operated a true rentier model.

The contrast grows sharper when comparing with oil states. In 2024, Saudi Arabia’s total revenues reached 1.259 trillion riyals ($335.7 billion), of which 756.62 billion riyals ($201.7 billion) came from oil alone more than 12 times Syria’s entire 2010 budget helping fund government spending that exceeds $366 billion.

In Qatar, projected 2024 revenues were 202 billion riyals ($55.48 billion), with $43.67 billion from oil and gas. These figures vastly outstrip Syria’s total resource income and allow Doha to fund nearly all of its $55.18 billion in spending.

In this context, it becomes clear that Syria’s challenge lies not only in the quantity of resources it holds, but in their limited market value and inability to match the needs of a sizeable population. While Saudi Arabia and Qatar fund most of their spending through energy exports, Syria even in its most stable years lacked the structural capacity to do so.

This proves that Syria’s future economic model cannot rely on natural resources alone, as some might imagine.

Toward a New Economic Model: Investing in People

Syria’s economic experience shows that natural resources despite their importance lack the market power and scalability to sustain a population-rich country. As such, they cannot serve as the cornerstone for a sustainable development strategy.

The urgent task now is to transition toward a new economic model based on human and knowledge capital the most renewable and scalable resource available.

This alternative model calls for major investments in education, research, technology, digital skills, and innovation. As seen in the experiences of South Korea and Singapore, countries can become economic powerhouses even without abundant natural resources.

To make this possible, Syria must improve its business climate, attract investment, and develop infrastructure especially in energy, transport, and communications. This would open space for high-potential sectors such as pharmaceuticals, IT, agro-industries, cultural and medical tourism, and specialized agriculture.

This transformation also requires modern fiscal policies: operating budgets should be funded by stable, predictable revenues such as taxes, while resource-based revenues which are volatile and exhaustible should be directed toward long-term investments like rebuilding infrastructure and improving the business environment.

Such a distinction between revenue types can protect public finances from volatility and lay the groundwork for a productive economy built on value creation through knowledge and skills not simply resource extraction.

In this vision, Syria’s real wealth lies not in oil or gas, but in its people.