Policy & Regulation

29 Mar 2021

Syria Rations Fuel Supplies Amid Suez Canal Blockage

29 Mar 2021  by Sarah Raffoul   

Syria's oil ministry has begun rationing the distribution of oil products after fuel shipments to the country were disrupted by the ongoing blockage of the Suez Canal.

The Suez Canal has been blocked since the container ship Ever Given ran aground on 23 March. Efforts to free the vessel have been ongoing since, but as of today there is still little clarity on how long it could take.

In a statement issued late yesterday, the oil ministry said a tanker carrying "oil and oil products" to Syria has been delayed as a result of the Suez blockage.

Until a resolution is found, the ministry is "rationing the distribution of available quantities of petroleum derivatives, mainly diesel and gasoline" in order to assure the continuity of vital sectors like bakeries, hospitals, water stations and other essential services.

The war-torn country has been suffering from an economic crisis and persistent fuel shortages ever since the imposition of harsh western sanctions on it shortly after the start of the civil war in early 2011. A deepening of the crisis in the second quarter of last year prompted the government to reduce road transportation fuel subsidies.

Syria has been forced to depend on fuel imports from abroad to meet domestic demand since the war slashed its domestic output. Syrian production has fallen to below 100,000 b/d from 383,000 b/d before the start of the civil war.

But with it being sanctioned, much of Syria's import needs have been met by Iran, which has also been under crippling US sanctions since mid-2018.

Iranian deliveries to Syria came into focus when the UK seized the VLCC Grace 1 near Gibraltar in July 2019 on the grounds that it was fully laden with Iranian crude and headed for the 140,000 Baniyas refinery in Syria, and therefore in breach of EU sanctions against Damascus.

Former US President Donald Trump's administration introduced sanctions on numerous Iranian entities it alleged to be exporting fuel to Syria, including the Mostazafan Foundation and its affiliates in late 2020.

Traffic through the Suez Canal has been halted since the incident last week. BSM, the ship's technical management company, said late on 27 March that re-floating attempts are continuing after "significant progress was made" the prior night. However, the ship remains in place and continues to block the critical waterway.

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