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How much does supporting Syria's Assad cost Iran?

There is no dispute that Iran provides critical support to Syrian President Bashar al-Assad. But how much Iran spends to prop up his regime is a matter of much dispute.

Of course, it isn't disputed inside Iran, where the topic is not open to public discourse.

Estimates of Iran's largesse vary considerably. The United Nations' special envoy for Syria, Staffan de Mistura, believes Iran spends about $6 billion annually propping up the Assad regime. Others believe that when you factor in Iran's support for Hezbollah, which provides fighters to Assad, the number gets closer to $15 billion or even $20 billion a year.

All one can say with certainty is that it involves multiple billions each year--and has been continuing despite the throttling of Iranian revenues resulting from sanctions for three full years. A major concern of US critics of any nuclear settlement with Iran is that it will automatically free up billions of dollars in frozen assets that Iran could use to further prop up Assad and further help feed conflicts elsewhere in the Islamic world.

A key component of Iran's support for Assad is crude oil shipments. Syria once had a surplus of crude and even exported small amounts from its oil fields in the east. The civil war that broke out in 2011 has ravaged Syria's crude production, which fell from about 400,000 barrels a day to roughly 20,000 barrels, according to recent estimates from the US Department of Energy.

Iran has long acknowledged providing Syria with oil on credit. It has not, however, said anything about the amount of oil it sends.

A new analysis of tanker movements by Bloomberg News suggests Iran has sent about 10 million barrels of crude to Syria so far this year--or about 60,000 barrels a day. With oil prices averaging $59 a barrel over the past six months, that's about $600 million in oil aid alone since January. Iran also supplies Assad with weapons and a continuing flow of ammunition. So far this year, according to the Bloomberg analysis, 10-tankers have sailed from Iran to the Syrian port of Banias, which is still controlled by the Assad regime. The tankers appear to sail from two Iranian island terminals, Kharg and Sirri.

Bloomberg says Iran is using just three tankers to send oil to Syria, all of them classified as Suezmax tankers capable of hauling 1 million barrels each. These are the biggest class of ships that can get through the Suez Canal with a full load. The most recent delivery appears to have been made May 26, when the tanker Amin delivered about 1 million barrels to Banias. A second ship, the Tur 2, arrived in Banias June 16 and was anchored last week just offshore with an apparent delivery of crude.

With most of Syria's oil and gas producing regions controlled by either the Kurds or Islamic State, these crude shipments from Iran are vital to the Assad regime's ability to hang on to power, says Andrew Tabler, a senior fellow at the Washington Institute for Near East Policy. This crude is likely being processed into fuel oil at the Banias refinery, he says, where it can be used for home heating oil, for power generation, and as fuel for Assad's military.

"Iran is basically fueling the entire country," Anthony Cordesman of the Center for Strategic and International Studies in Washington, told Bloomberg. Cordesman and Tabler believe it's unlikely Syria is paying for this oil. Given the state of its economy after four years of intense civil war, and Assad's dwindling currency reserves, it's doubtful Syria has the money to pay.

Iran long ago announced a credit line for Syria and recently added a new line of credit. The implication is that Syria is paying nothing for the oil now but is expected to pay at some point in the future. Syria, however, had a very bad record for repaying its many debts to the Soviet Union.
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Publication:Iran Times International (Washington, DC)
Date:Jul 10, 2015
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