Brian Downing

The Price of Oil and the Future of Syria

The world, it would be fair to say, is in disarray. Most economies are sluggish, political paralysis and decay are everywhere, and appallingly brutal militant groups are on the march. Nonetheless, despite fighting near vital oil fields in the Gulf region, the price of oil - inordinately shaped by skittish traders - has been falling. Key benchmarks have plunged 18% since early September.

The fall has been made possible by slumping demand from the United States as new drilling techniques have boosted domestic production from 5 million barrels per day to 8.4 million in only the past six years. Neither the Saudis nor their allied producers in the region are countering the fall by cutting production - a standard response since the cartel began to exert influence in the early seventies.

Oil is down, but what's up?
Saudi Arabia is boosting oil supplies to advance long-term geopolitical interests at the expense of short-term economic ones. Riyadh wants to increase its power in the Middle East by forcing a settlement to the Syrian war over the objections of Iran and Russia, both of which support the Assad government, both of which rely on oil revenue.

Two years ago, the Assad government was about to fall. Beset by various rebel forces, the government had to abandon large swathes of the country. The government's fortunes improved, however, as arms and money came in from Russia and Iran - the latter sending in advisers that trained militias, which along with Hezbollah fighters were critical in solidifying control along the Mediterranean region.

No one is winning now, except for Islamist militant groups such as the al Nusrah Front and the Islamic State. Their numbers have grown as Arab youth see serving with them as heroic, redemptive, and divinely ordained. Countries in and out of the region worry of Islamist fighters returning home and the war inspiring lone-wolf imitators.

The need for an international settlement is clear. The combatants are unlikely to arrive at settlement on their own, hence a settlement imposed by various backers is the only option to continued war. Saudi Arabia and Iran - chief backers of the rebels and government, respectively - met last spring to begin discussions, but the meetings went nowhere. Saudi Arabia is now working with fellow Sunni oil-producers.

Oil as a weapon
The Saudis are well practiced in using their oil in world politics. They embargoed oil in 1973 to protest US support for Israel. In the mid-eighties, amid the Afghan War, they boosted production to drive down prices and slash Soviet export revenue upon which the state heavily relied. Today, the Saudis and their fellow Sunni oil-producers are seeking to slash the export revenues of Russia and Iran - Syria's principal supporters. In that both countries are already hurt by sanctions, falling oil prices are all the more problematic.

The Saudis realize that Tehran and Moscow will not abandon Assad altogether; Syria is too important to them and their credibility with other allies would suffer. Riyadh is damaging the Iranian and Russian economies to get them to accept an unpalatable settlement.

Three scenarios
The oil weapon may lead to negotiations but the nature of a settlement is unclear, though Riyadh has one in mind. Americans will want to bring disparate factions into a bargaining process then hold elections. After so much killing and destruction, however, a fair election is improbable at best. A spirit of reconciliation is years away. A Sunni majority would undoubtedly win and the Shi'ite-Alawite minority would fear the new government - as well they might.

An alternative is a federation: the Shi'ite-Alawite population along the Mediterranean coast, the Sunni Arabs in the center and east, the Kurds in the east. The prospects for a Syrian federation, amid so much mistrust and bloodshed and without a shared identity and national economy, are unpromising. The Kurds will look more to their Iraqi kin than to Syrian oppressors. Warring Sunni groups are unlikely to work together.

Another alternative is a miscellany of statelets, much as Central Europe was for many centuries. (As a Prussian king once quipped, you could walk across one and much of the country would stick to the bottom of your boots.) The Sunni region is presently ruled by dozens of militia commanders, Islamist visionaries, and tribal elders. Most are backed by foreign powers, from Washington and London to Riyadh and Doha.

The Saudi scenario - and opposition to it
The Saudis want to create, through diplomacy and disbursements, a unified polity out of Sunni Syria which will be beholden to them. Sunni Syria could one day align with the Sunnis of western Iraq who wish to be rid of the Shi'ite government - a goal Riyadh has been aiding for years.

This would greatly expand Saudi influence in the emerging Middle East. Riyadh has already ousted the Muslim Brotherhood government in Egypt and supported the new military government. A similarly beholden Sunni region straddling eastern Syria and western Iraq would greatly enhance Saudi political and military clout.

Opposition to the Saudi plan will be strong. Syrian president Assad will not willingly preside over the dissolution of his country. However, he is not in a fiscal or military position to rebuff pressure from Tehran and Moscow should their hands be forced by failing export revenues and restive populations.

Iran has more to lose than does Russia. A Sunni region will sever lines of communication with Shi'ite parts of Lebanon and Syria, and constitute a step toward marginalizing Iran and weakening Shi'ite aspirations throughout the Gulf.

Israel prefers to keep Syria weak, fragmented, and unable to pose a threat. It has tried to convince the Druze population of southern Syria to break with Damascus and became a buffer state under Israeli aegis. Thus far, the Druze have not shown great interest. Qatar and its Muslim Brotherhood allies will also oppose rising Saudi influence in the region.

The oil weapon has risks for Saudi Arabia and fellow Sunni states. They themselves depends on oil revenue to run their governments and keep their populations reasonably content. Further, so obvious an attempt to weaken Shi'ite power will exacerbate already strained sectarian tensions in the Sunni princedoms.