Disclosure: I am short USO. (More…)
The scuttlebutt (talk around the water cooler) says that an impending war with Syria will endanger the world’s oil supply. Many people are assuming that this is because Syria’s oil will go offline to the rest of the world. This is a mistaken impression. Syria’s oil production is only estimated at about 50,000 bopd. All of this is refined domestically. It is true that prior to sanctions it produced about 370,000 bopd (about 0.4% of the world’s oil supply). However, the sanctions have been in place for some time (since 2011 – 2012). Plus Syria only exported 150,000 bopd before the sanctions. In other words Syria is not now supplying the outside world with any oil; and it has not been for a year or more. In fact Syria is a net importer of oil products. A war in Syria by itself would have NO IMPACT on the world’s oil supplies.
Some worry that the Syrians would send missiles to destroy neighboring countries’ oil fields. However, this seems unlikely. Iraq is a near neighbor. However, if Syria attacked Iraq, it might find itself facing a massive U.S./UN force able to stage its offensive safely from Iraq. Attacking Iraq would be strategically foolish. Iran and Lebanon (at least Hezbollah militants) are Syria’s closest allies, so they are out. Israel would counter attack strongly, so a direct, unjustified attack on Israel is unlikely. Saudi Arabia is well armed with U.S. technology. Plus it would again allow staging of U.S./UN forces if it was attacked directly. This only leaves Jordan, Turkey, and Kuwait that could be attacked. Syria probably would like to maintain at least a semblance of friendly relations with Jordan and Turkey, which share long borders with Syria. Kuwait probably falls into the same category as Iraq. All told, unless the governing body of Syria goes completely insane, they will not try to destroy neighbors’ oil infrastructure, especially since they are current net importers. Neighboring countries may be the cheapest place for Syrians to get oil.