Oil markets have exhibited minimal response to the recent collapse of the Syrian regime led by Bashar al-Assad, as traders appear to have assessed Syria's oil production as relatively modest and not a direct threat to broader regional exports.
On Monday, Brent crude oil, the international benchmark, saw an increase of approximately 1 percent, rising to $71.80 per barrel.
Syria holds modest oil reserves, and during his first presidency, President-elect Donald J. Trump mentioned the necessity of securing these reserves. However, the markets largely dismissed the potential risks that escalating conflict in the Middle East could disrupt supply chains. Currently, about 900 U.S. troops are stationed in Syria.
Since Hamas-led militants attacked Israel from Gaza over a year ago, oil and natural gas flows have remained largely uninterrupted, with the primary response being the rerouting of tanker traffic to circumvent Houthi attacks in Yemen.
The focus of the markets has shifted towards the sluggish growth in global demand, which is likely to be satisfied by new supplies from the United States, Brazil, Canada, and other producers not constrained by OPEC Plus agreements.
On Thursday, OPEC Plus postponed plans to increase output until at least the second quarter of next year, marking the third delay in recent months.
Richard Bronze, head of geopolitics at a research firm, noted, “There’s still a residual view that the oil market will be oversupplied next year.” He voiced concerns that Mr. Trump’s policies could drive oil prices lower, whether through increased U.S. production or tariffs that might disrupt economic activity.
Despite his skepticism about these theories, Mr. Bronze indicated that “the market will have to see it to believe it.”
Although Syria is located near major oil producers such as Iraq and Saudi Arabia, its own oil production has been significantly diminished due to a decade of civil war.
In 2023, Syria's oil production was only 40,000 barrels per day, a stark contrast to its output of over 600,000 barrels per day in the early 2000s, which was comparable to mid-sized producers like Azerbaijan or Egypt. This historical performance suggests that, with political stability and improved management, oil sales could become a vital revenue source for a future Syrian government.