In the wake of the Arab Spring that spread through the Middle East and parts of North Africa from 2010 onward, Syria emerged as the focal point, ultimately descending into a civil war that continues to rage, with various opposition groups fighting to displace current President Bashar Al-Assad’s regime. Now, with the rise of the Islamic State (IS) in Iraq and Syria, the situation in the region has taken a radical turn, with some even raising existential questions over the current geography of the region itself.
The Islamic State has taken to using regional oil reserves, predominantly in Syria, to finance its acts of violence and the expansion of its announced “caliphate.” According to estimates, Islamic State until recently was earning up to $1 million per day by selling oil produced from makeshift refineries on the black market. Incidentally, the Kurdish Peshmerga are also relying on smuggled oil for funding. Over the past month, the ability of Islamic State to sell oil has diminished due to increased air strikes by the US-led coalition.
India has had good relations with Damascus throughout its post-Independence history. As part of its policy of forging strong ties with the Middle East, even though Syria does not have significant natural resource wealth to offer, New Delhi maintained close links with the Ba’ath Party that has presided over the country since the 1960s. Even during the current crisis, New Delhi has maintained its stance of supporting a solution only via dialogue.
As the Syrian civil war intensified during 2012-2013, New Delhi diplomatically sided with its ally Moscow against any Western military intervention. During this period, Syrian diplomats made trips to India to try and garner support not just from the Indian government, but from all the BRICS countries. Damascus looked for New Delhi’s support to stall any incoming large-scale military assistance for the now largely fractured opposition forum known as the Syrian National Coalition (SNC). On her visit to New Delhi, Assad’s political advisor Dr. Bouthaina Shaaban said that India was “an important country for the political process on Syria.”
The Deir Ez-Zor region of Syria became the site of tussles within opposition alliances and independent Islamist groups after the ouster of government control. Syria’s oil infrastructure, which is not as extensive as neighboring Iraq’s, began to fall under rebel control as early as November 2012.
In April 2013 India’s ONGC Videsh (OVL) lost control of its oil investments in Deir Ez-Zor, as the oil field where India was part of a conglomerate that had invested along with China and others was overrun by rebel fighters, suspending all exploration and production activities in the area. Contrary to popular assumptions, India and China have in the past invested together in the Middle East and Africa without political or economic fallout. In fact, this trend of joint-investment could be expanded in the future as Asian economies become more reliant on Middle Eastern oil.
Even though the loss of production from the fields was not especially significant to the partners (roughly 30,000 barrels per day), this does offer both New Delhi and Beijing first-hand experience of losing energy assets abroad to non-state actors, a situation that may become more common in the future. Access to Syria’s modest oil fields by groups such as the Jabhat al-Nusra, an offshoot of al-Qaeda, Islamic State, and other fringe elements is fuelling a war within a broader civil war, as provinces that hold these natural resources experience “overwhelming chaos.” These groups reportedly sell crude oil to middlemen who then pass on the supplies to various buyers, including those across the border in Turkey and even forces aligned with Assad’s regime, which are as desperate for energy today as the rebel-held strongholds in Syria. These groups are also using revenue from the illicit sale of oil to buy better weapons for themselves, ensuring the civil war funds itself from within the Syrian borders.
The takeover of such natural resources in Deir Ez-Zor, Hasaka, Raqqa, and so on is a valuable example for countries such as India and China, who are looking to invest and build facilities in the region. The question of securing facilities in the region can clearly not be taken for granted simply on the back of a host country’s influence and the investing country’s political heft. Even as the United States exerts a near hegemonic foreign presence in the region, the situation that has developed in Syria showcases the political complexities at play.
With the expected increase in Indian and Chinese energy projects in the Middle East, combined with the possibility of the construction of larger, more expensive and target prone facilities such as major oil refineries, New Delhi and Beijing (along with other major investors such as Tokyo and Seoul) should start devising security plans to protect their installations along with host governments, including the waterways that sustain them. The loss of the Deir Ez-Zor fields represents a learning curve on asset protection for Asian economies abroad, which are already the world’s biggest importers of oil and gas. The increase in bilateral and multilateral agreements on such investments, as they pertain to a country’s national security and irrespective of whether the companies involved are in the private or public sector, will perhaps need to be addressed through policy in the very near future.
The security of such installations is going to be a fundamental test for Asian governments as their thirst for fossil fuels increases over the next 40 more years at least. Ideas are already being floated by analysts, diplomats and officials for a new forum consisting of major Asian importers such as India, China, Japan and South Korea to offer an alternative platform in the East for discussions between various power centers in the Middle East, as an alternative to the role of the West. It is in the interests of countries like China and India to move forward with this process. The problems of the Middle East are not going to go away anytime in the near future, and it will not be easy to create an “Eastern forum,” considering the strong geopolitical challenges among the Asian economies themselves. However, a serious attempt would be timely and well worth the effort.
Kabir Taneja is a journalist covering Indian foreign affairs and energy sector for The Sunday Guardian, The New York Times (India Ink), Tehelka, The Indian Republic and others. He is also a Scholar at The Takshashila Institution.
By KABIR TANEJA November 23, 2014 in The Diplomat