AOT Trading AG has provided a steady supply of gasoil to Syrian ports with the most recent shipment arriving only days ago, surprising rival European trading houses that have dropped trade with Syria’s increasingly unpopular government.
AOT declined to comment. Supplying Syria with refined oil is legal as the European Union (EU) stopped short of banning deliveries for humanitarian reasons.
The Arab League has given Syria a day to sign a protocol allowing monitors into the country or the regional body will press ahead with plans to impose economic sanctions, Egypt’s envoy to the League said.
“Respectable firms would find it ethical to supply the Syrian people with fuel as it’s a necessity. Taking other action would be a punitive measure against ordinary Syrians and not the government,” said Eurasia Group analyst Ayham Kamel.
But even Europe’s largest trading houses have abandoned trade with Syria due to complications over payment and worries about associating with its government.
A trader at a major trading house which competes directly with AOT said his company would not touch business with Syria at present.
“We are not dealing with Syria for now,” said the trader.
AOT has provided a stream of gasoil from the Black Sea and storage in the Mediterranean, with the most recent shipment reaching the port of Banias over the weekend, traders said.
Deliveries have also been steady from BB Energy, a trader active in the Mediterranean, and other smaller traders operating out of Cyprus and Lebanon, according to traders.
“Around 4-6 cargoes per month are going to Syria, a mix of 10ppm (parts of sulphur per million), 0.1, 0.2 and 0.3 gasoil. Mainly 0.2, high-sulphur from the Black Sea. (It is from) AOT and BB Energy,” said another gasoil trader operating in the Mediterranean.
Some analysts said that the lack of suppliers willing to provide fuel could indirectly add pressure on the Assad government, by increasing the strain on the economy already suffering from the loss of crude oil revenues.
Oil firms that usually sell to Syria have not participated in recent crude oil sell tenders issued by the Syrian Petroleum Company, starving the government of a key revenue stream and forcing international oil firms to cut production.
“We are already seeing significant inflation on (fuel oil) and, taken with other economic woes, this could fatally undermine the regime, especially as the cold winter months approach,” said Barnes-Dacey of London-based Control Risks.
European Union governments agreed on Sept. 2 to ban imports of Syrian oil, allowing only deliveries under contracts signed before Sept. 2 to continue until Nov. 15.
