Syrian government receiving Iraqi crude, despite sanctions

Shipping and payment documents show that millions of barrels of crude oil delivered to Syria on Iranian ships have come from Iraq, through Lebanese and Egyptian trading companies.

LONDON // The Syrian government has received substantial imports of Iraqi crude oil from an Egyptian port in the last nine months, shipping and payments documents show, part of an under-the-radar trade that has kept president Bashar Al Assad’s military running despite western sanctions.

Mr Al Assad’s government has been blacklisted by western powers for its role in the two-and-a-half-year civil war, forcing Damascus to rely on strategic ally Iran – itself the target of western sanctions over its nuclear programme – as its main supplier of crude oil.

An examination of previously undisclosed commercial documents about Syrian oil purchases shows however that Iran is no longer acting alone. The shipping and payment documents show that millions of barrels of crude delivered to Syria on Iranian ships have actually come from Iraq, through Lebanese and Egyptian trading companies.

The trade, which is denied by the firms involved, has proven lucrative, with companies demanding a steep premium in return for bearing the risk of shipping it to Syria. It also highlights a previously undisclosed role of Egypt, Iraq and Lebanon in Mr Al Assad’s supply chain, despite those countries’ own restrictions on assisting his government.

Both the Syrian national oil company that received the oil, Sytrol, and the Iranian shipping operator that delivered it, the National Iranian Tanker Co (NITC), are on US and EU sanctions lists.

Although firms outside the US and EU are not subject to their sanctions, companies that do business with firms on sanctions lists risk themselves being blacklisted.

At least four firms from third countries that were added to the US treasury’s sanctions list for Iran when it was last updated on December 12 were punished specifically “for providing material support to NITC”.

Many details in the documents describing Syrian oil shipments between March and May this year were corroborated by a Middle Eastern shipping source with long-standing ties to the Syrian maritime industry. Publicly available satellite tanker tracking data confirmed the movements of ships.

The documents refer to at least four shipments by four tankers operated by NITC that carried Iraqi oil from Egypt’s Mediterranean port of Sidi Kerir to Syria.

According to the documents, a Beirut-based trading firm invoiced Syria for arranging at least two of the shipments and was involved in a third, while a Cairo-based firm, was responsible for loading Iraqi oil into at least one.

Syria imported up to 17 million barrels of crude oil between February and October, of which roughly half came directly from Iran and half from Sidi Kerir port, according to the Middle Eastern shipping source. The documents reveal that at least half of the oil from the Egyptian port was Iraqi crude.

The Beirut firm arranged the shipments with Sytrol, which operates the one functioning refinery still under Mr Al Assad’s control. The documents show the firm invoicing Sytrol for almost $250 million (Dh881.5m) for two deliveries of Iraqi crude in March and May to Syria’s Banias refinery. In a letter to Sytrol dated April 4 this year, it asked for an advance of about $50m and detailed previous deals with the Syrian state oil company.

“Our company has and continues to secure the state’s needs in oil and oil derivatives in the recent period and was able to secure this despite major difficulties and challenges,” the letter said, adding that it had already provided Sytrol with almost 5 million barrels of crude, diesel, and cooking fuel. The price for each barrel of Iraq’s Basra Light crude in the invoices is between $15 and $17 above the official Iraqi price at that time, equivalent to an extra $15m for each tanker.

The Cairo-based company, which has brokered deals for the Beirut-based copmpany in the past, loaded at least one cargo of Iraqi crude on to an Iranian tanker that was delivered into Syria at the end of May, according to the documents, which say the oil was delivered to Syria on May 26.

After leaving Iraq, the crude oil was delivered to Sidi Kerir on the 320km pipeline owned by the Arab Petroleum Pipeline Company which runs from the Red Sea to the port west of Alexandria, where it was loaded on to the Iranian ships.

According to satellite ship-tracking data, the four ships each sailed north towards Syria. Each ship switched off its satellite signals just before the delivery date in Syria, then reappeared on satellite tracking shortly after. In some cases the satellite data also contains information about cargo weight which confirm that the cargo was unloaded while the ships’ signals were shut off.

The four NITC-operated tankers involved in the shipments have all been renamed within the past few years and were flying Tanzanian flags at the time they loaded in Egypt, a tactic Iran has used to mitigate the impact of sanctions since 2011.

Both the Beirut- and Cairo-based firms denied any involvement in the Syria trade. Iran’s NITC declined to comment.

There was no evidence that the Iraqi or Egyptian governments were involved in shipping Iraqi oil through Egypt’s port.

* Reuters