Welcome to the September 2026 edition of the Syria Monthly Economic Digest.

We opened the August 2026 issue by noting that “policy [is] moving faster than both the government’s ability to deliver and the people’s ability to adopt it.” This month’s issue looks at who pays for that speed (spoiler alert: the people), and at how it is affecting production, both agricultural and industrial.

On September 13, diesel rose by 40%, and protests spread from Hasakah, Deir Ezzor, and Raqqa to the Aleppo countryside and Hama, in what was described as the most widespread unrest since Assad’s fall. The government’s arithmetic is hard to dispute given that fuel was being sold at a loss, the Qatari gas grant had ended, and the Syrian Petroleum Company could no longer fund both its imports and the Treasury. The end of cheap energy, however, is now showing up across the productive economy, and this edition follows it sector by sector. Omran has stopped producing clinker because energy makes up more than two-thirds of its costs, and now grinds imported clinker instead. A cotton grower in Raqqa saw a barrel of diesel triple in price over the season, and wheat farmers are heading into planting with costlier fuel, no seed price, and no seasonal loan decision.

For farmers, input costs are only part of the calculation, and months of delayed wheat payments are starting to change what gets planted. In Deir Ezzor, where cotton has almost disappeared, the farmers’ union cited late payments, along with fuel and electricity costs. Hasakah growers say that knowing who will buy the crop, and how quickly they will be paid, matters as much as the price itself, while some wheat farmers are weighing other uses for their land. Farmers’ leverage peaks before delivery and vanishes once the grain is in the silo, and many may draw that lesson next season.

That raises a broader question about what Syria should be growing, especially given that the country uses two billion cubic meters more water a year than nature replaces, with agriculture accounting for around 88% of it, and wheat and cotton remaining the thirstiest crops on the map. The drive for self-sufficiency in both was one of the Ba’athist policies that drained the country’s aquifers. With energy now priced closer to cost and growers already reconsidering, there may be an opening to steer agriculture toward higher-value, less water-intensive crops, rather than to rebuild the old crop map.

The state is also looking for new ways to pay its bills, which are racking up faster than expected (as covered last month). Then, faced with a widening deficit, the Presidency chose to cut spending rather than accumulate arrears or print money, which deserves credit. Syria’s first syndicated bank loan, USD 25 million split among three of its largest banks, shows both the model’s promise and its limits: banks with too little capital to lend at scale. A Qatari stake in Shahba Bank, the sector’s first foreign equity investment since the fall of the former regime, points to the remedy.

There were also signs of recovery, if only by proxy. Cement consumption is back near its pre-war peak, one of the most reliable indications that rebuilding is actually happening, even if, for now, most of it relies on imported clinker. Politically, the EU restored its ambassador in Damascus, and Kaja Kallas’s visit opened talks on a new partnership, though EU development funding has held flat. At home, the People’s Assembly held its first hearing with the energy minister, and the 2027 budget is set to be the first to go through the full legislative process. Both are early but real steps toward the kind of scrutiny that makes hard decisions easier to explain.

As always, thanks for reading.

In This Month’s Issue

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Share This Issue

If you found this edition useful, please consider sharing it with colleagues or forwarding it to anyone interested in Syria’s political and economic developments.

Share

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

About the Syria Monthly Economic Digest

The Syria Monthly Economic Digest is a monthly publication by The Syria Dispatch that tracks the political and economic developments shaping Syria’s transition.

Each edition focuses on the developments that we believe matter most over the past month—not every headline, but the ones that reveal something important about where the country is heading. These may include policy decisions, investment announcements, energy and infrastructure projects, banking and monetary reforms, trade and reconstruction, property rights disputes, public services, and the evolving relationship between the Syrian state, society, and external actors.

The format is straightforward. Each article begins with a summary of what happened, followed by a “Why It Matters” section that provides additional context, background, and analysis.

The digest is written for readers who want a structured, analytical overview of Syria’s transition, including policymakers, researchers, journalists, diplomats, development practitioners, investors, civil society actors, and anyone interested in the country’s political economy.

It is not intended to be exhaustive, nor does it replace daily news coverage. Instead, it offers a monthly snapshot of the developments that we believe deserve closer attention and a better understanding of how they fit into Syria’s broader transition.

If you have comments, corrections, suggestions, or would like to collaborate, we would be delighted to hear from you.

Also Published This Month

In the Research & Analysis Section

In the Interviews Section

Quotes and Media Appearances

• What a new Black Sea grain crisis means for the Middle East — The New Arab (Christopher Solomon, September 2, 2026)

• Syria’s Fuel Price Protests Test the Limits of Post-Assad Dissent — New Lines Magazine (Anagha Subhash Nair, September 16, 2026)

• En Syrie, l’augmentation du prix des carburants attise la colère sociale : « Au fond, les gens n’attendaient qu’un événement pour exprimer leur colère » — Le Monde (Nissim Gasteli, September 17, 2026)

• La grogne sociale se répand dans le monde face à la flambée des prix du diesel et du fioul — RFI (September 17, 2026)

• UAE investors are pouring bns in Syria — but the bottlenecks aren’t far behind — EnterpriseAM (September 18, 2026)

• ‘People can’t take it any more’: Syrian government cuts diesel prices after protests over fuel costs — The National (Nada Atallah, Ahmad Fallaha, September 18, 2026)

• Gulf Eyes Syrian Trade Corridor to North Africa — Global Finance (Chloé Domat, September 22, 2026)

• Syria's economic reckoning: The greatest test yet for al-Sharaa — The New Arab (Cian Ward, September 24, 2026)

• Fuel and food costs put Syria’s beloved makdous tradition out of reach — Arab News (Anan Tello, September 25, 2026)

• من المحروقات إلى القمح: نقص السيولة يضغط على اقتصاد سوريا — Al-Quds Al-Arabi (Menhal Barish, September 26, 2026)

Events

The Syria Dispatch took part in a two-day workshop at the Istanbul Policy Center on September 28–29, 2026. The presentation focused on the liberalization of the Syrian economy, arguing that it is liberalizing from the wrong end: cutting subsidies and opening imports before building safety nets or slimming down the state, with all the consequences this is likely to have going forward.

We are grateful to Samer Sharani for organizing the event and to the Istanbul Policy Center for hosting it.

Key Developments: On September 29, EU High Representative for Foreign Affairs and Security Policy Kaja Kallas visited Damascus, three weeks after Michael Ohnmacht presented his credentials to President Ahmad al-Sharaa, restoring EU representation at ambassador level for the first time since 2012.

At a joint press conference with Foreign Minister Asaad al-Shaibani, Kallas said the EU aimed to mobilize more investment and upgrade the partnership, but stressed that this depended on Syria and that investment required security, clear rules, the rule of law, and functioning institutions. As an idea of what the Commission expects from the Syrian authorities, on September 8, the EU told the UN Human Rights Council that adopting a new Constitution and building an inclusive political system would be essential to the transition. It described the formation of the People’s Assembly and Constitutional Court and the introduction of Kurdish-language teaching as milestones.

Kallas put existing EU support at EUR 620 million for recovery, humanitarian needs, and institution-building, plus EUR 51.5 million mobilized through EU foreign policy instruments, including around EUR 18.85 million for demining. She also said the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) were discussing support for Syrian projects, though no agreement had been reached. She proposed technical talks this year, including on recovery and reconstruction, ahead of a second High-Level Political Dialogue before next summer; the first was held in May.

In turn, Shaibani said the two sides discussed a new partnership agreement to replace the 1977 Cooperation Agreement. He said Damascus sought inclusion in the EU’s 2028–2034 Multiannual Financial Framework, and called for lifting the remaining sanctions on Syrian state institutions.

The visit came days after the two met in New York on the margins of the UN General Assembly.

Leading up to this high-level engagement, Minister of Finance Yisr Barnieh had discussed on September 2 with Henrike Trautmann, Director for the Middle East at the Commission’s Directorate-General for the Middle East, North Africa and the Gulf (DG MENA), the activation of the Technical Assistance Hub due to open in Damascus with Commission funding. They also discussed workshops on public financial management, public-private partnerships, and public debt management, and support for establishing joint-stock companies. On September 22, Qutaiba Qadish, director of the Foreign Ministry’s International Cooperation Department, met Michael Karnitschnig, acting Director-General of DG MENA, in New York to discuss development cooperation and support for economic recovery.

Subscribe now

Why It Matters: Kallas’s figures look different once read against the documents behind them. The EUR 620 million is a two-year envelope for 2026 and 2027 and includes all of the humanitarian, development, and FPI support. As a result, the Commission’s bilateral development component amounts to EUR 280 million, or EUR 140 million a year, against EUR 139 million in 2025 (see table below). Thus, the EU’s annual development effort in Syria is flat.

Yet a lack of European finance or interest is not the only reason EU support may seem limited given the scale of needs inside Syria. The Commission’s 2026–27 programming describes Syrian absorption capacity as a “binding constraint.” That echoes the gap between funds available and funds used that a joint Commission–EIB mission recorded in 1982. The technical talks Kallas proposed ahead of the next High-Level Political Dialogue are the natural place to sequence both sides of the problem: what Syrian ministries can absorb, and what Brussels is prepared to commit.

Back to development support, the 2025 measure already allocated EUR 26.5 million to state and institutional capacity, but shared that envelope with health and directed most of its funding to livelihoods, microfinance and small businesses; Syrian institutions were consulted and trained, not contracted. The 2026–27 measure narrows that envelope to public administration alone, at EUR 30 million a year, covering public financial management, procurement, payroll and statistics, and makes national and local authorities eligible for direct grants. That support will reach the Syrian state through European intermediaries, with no financing agreement and no budget support. The terms, too, remain set in Brussels: both packages are Special Measures, an exceptional instrument adopted by Commission decision rather than negotiated with Damascus. A new partnership agreement and inclusion in the EU’s 2028–2034 budget cycle would replace these unilateral decisions with a negotiated, multiannual framework, as Foreign Minister Shaibani asked for.

However, Kallas tied further investment to the rule of law and functioning institutions, but the programming has moved in the other direction. The 2026–27 document dropped the “gradual and reversible” qualifier that framed 2025 support. More generally, the EU has never specified what it means by progress on the rule of law and functioning institutions, what benchmarks would measure it, or when it would reassess its approach. This matters most now, because European leverage is greatest while a new agreement remains a prospect; once one is signed, Brussels acquires a stake in the relationship’s survival. If the coming talks lead toward the partnership Damascus is asking for, they are also the moment to state what that partnership is for and how progress would be judged.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On October 1, the state-owned General Company for Cement and Building Materials (Omran) signed a 30-year build-operate-transfer (BOT) contract worth around USD 200 million with Turkish company ÇİMKO to rebuild the destroyed al-Muslimiyah cement plant in Aleppo. They laid the foundation stone the same day in the presence of the Minister of Economy and Industry, Nidal al-Shaar, and Aleppo Governor Azzam al-Gharib. The project includes a new production line of 5,000 tons of clinker per day (around 1.65–1.8 million tons a year) and follows a memorandum of understanding (MoU) signed in late August. It is one of the largest partnership deals Omran has concluded since 2025. Those deals include the Tartous mills, now run by UAE-based QZ Group, and Hama’s third production line, being upgraded by Iraq’s Vertex Group (USD 300-375 million). The Adra plant near Damascus has yet to be awarded despite more than ten regional bids.

On September 16, Deputy Minister of Economy and Industry Basel Abdul Hannan met with the Syrian Investment Agency (SIA) and the General Establishment of Geology and Mineral Resources (GEGMR) to discuss a national investment map for cement, a more balanced spread of projects across governorates, and faster licensing. Three days later, Omran Director-General Mahmoud Fadila said the cement industry had moved “from crisis management to rebuilding,” adding that Omran is looking for strategic partners that can bring financing, technology, and operating expertise, and that the state should not bear the cost of rehabilitation alone. He rejected the idea that these arrangements amount to privatization, since Omran keeps responsibility for overseeing investors.

Yet, as the sector is still recovering from more than a decade of war, local consumption relies more on imports than on local production. According to the Ministry of Economy and Industry, Syria imported over 3 million tons of finished cement in the first half of 2026, more than double the level a year earlier, while clinker imports for local grinding rose more than tenfold. Industry figures presented in Damascus on September 5 put 2025 consumption at around 8 million tons, with imports covering more than 60%. Demand is also showing up in private producers’ results: Al-Badia Cement, the country’s largest private producer, roughly doubled its net profit in the first half of the year as sales rose 80%.

Subscribe now

Why It Matters: Given the lack of data across the country, looking at the cement market provides a relatively reliable proxy for reconstruction activity in Syria since almost every type of rebuilding, from repairing a damaged apartment to building a road or a new residential tower, requires it. Unlike most construction indicators, cement is also measurable: a small number of plants report production, and imports appear in partner countries’ customs data. In an economy where official statistics on construction output, building permits, or investment remain patchy, cement consumption is one of the clearest signals of how much is actually being built.

Consumption reached between 7.3 million tons (our estimate based on official figures) and 8 million tons (figures presented in Damascus in September) in 2025. That is more than double the 2023–2024 levels and approaching the pre-war peak of about 9 million tons (see table). However, the supply sources have changed significantly since before the war. While imports covered about a third of the market in 2010, they covered around 60% in 2025, mostly because Omran’s production fell from about 6 million tons in 2010 to under 2 million tons by 2022. Omran’s output collapsed largely because the war destroyed its Aleppo plants: al-Shahba was completely destroyed and Arab Cement was partly damaged, taking around 2 million tons of capacity out of production, while many of its remaining lines date back to the 1970s and are energy-intensive and outdated.

Türkiye remains the main supplier of finished cement, but Egypt and Saudi Arabia have emerged as suppliers since the collapse of the Assad regime. This trend continued into 2026: Turkish cement exports to Syria more than doubled in value in the first half of the year, while Egypt shipped over 330,000 tons of cement and clinker between January and June. The import mix is also shifting. Omran signed a clinker supply agreement with Egypt’s Cisco in January and began receiving shipments in March. According to the Ministry of Economy and Industry, clinker imports rose from about 5% of finished-cement import volumes in the first half of 2025 to 22% in the first half of 2026.

In practice, Syria increasingly imports semi-finished products (clinker) and grinds them at home, rather than producing clinker itself.

If the 2026 trend holds, consumption would reach around 9.5 million tons, slightly above its 2010 level, and could rise further as local demand increases.

The Ministry of Public Works and Housing announced on September 23 a target to build or rehabilitate 2 million housing units by 2035. It estimates Syria’s housing stock at 4.25 million units, of which 1.32 million are damaged, and puts the shortage at 1.9 million units, rising to 2.5 million by 2030 if supply does not accelerate. Assuming half the target is new construction and that a 100 m² concrete-frame apartment requires around 20–25 tons of cement, while repairs require only a fraction of that, the program would add roughly 2.5–3.3 million tons a year to demand until 2035. That would add to current consumption and infrastructure needs, which reconstruction estimates put above residential needs. In other words, a credible housing program would push demand well past the pre-war peak while new domestic capacity is still being built.

Yet, given current obstacles to local production, most of this additional demand would be met from abroad. Domestic production remains constrained by energy costs, and clinker is where those costs bite hardest. Making it requires firing limestone and clay in a kiln at around 1,450°C, and the rotary kiln that produces clinker alone accounts for 70–78% of the energy used in cement production, while grinding clinker into cement requires comparatively little. Earlier this year, Omran halted clinker production, citing energy tariffs that account for more than 65% of production costs, and has since relied largely on grinding imported clinker. Al-Badia’s H1 2026 accounts show the same pressure: its energy bill rose almost sixfold year on year and now makes up about half of its production costs, even as sales grew by 80%. The subsidized fuel that supported the sector’s pre-war profitability has been replaced by market-priced energy. Fadila has explained that Omran imports clinker from countries that subsidize energy, which suggests that for the most energy-intensive stage of production, importing is currently cheaper than producing at home.

The investment pipeline is meant to close this gap, with a map of the main cement plants showing most state-owned sites at the bid or proposal stage. Several have since moved forward:

• Al-Muslimiyah (Aleppo): contract signed on October 1 with Türkiye’s ÇİMKO.

• Tartous: mills in trial production since April under the UAE’s QZ Group.

• Hama: Line 3 upgrade under way by Iraq’s Vertex Group.

• Rastan: taken over by a local investor.

• Raqqa: agreement between Al-Hassan Holding and China’s Jiangsu Pengfei for an integrated plant.

• Al-Fayhaa: white cement plant began commercial operations in early 2026.

• Adra: still unawarded despite more than ten bids.

Taken together, the new clinker lines announced at Muslimiyah, Hama, Adra and Raqqa add up to roughly 21,000 tons per day. That is around 9 million tons of cement a year, enough in principle to replace most current imports, before even counting Al-Badia’s planned second line. Most of this capacity, however, will not come online before 2027–2030, and Adra has no investor yet, Raqqa is only an agreement, and none of the projects resolve the energy cost problem that led Omran to stop producing clinker. Fadila himself presents 2027 as the turning point, suggesting the next twelve to eighteen months will rely on imports and grinding.

Over the coming years, Syria’s dependence on imported cement and clinker is likely to deepen before it eases, leaving construction costs tied to regional energy prices and to supply from Türkiye, Egypt and Saudi Arabia. This also makes the housing target only as credible as the supply chain behind it: without lower domestic energy costs or a faster rollout of clinker capacity, a large-scale building program would mostly widen the trade deficit and push up prices. The partnership model therefore carries more weight than its contract values suggest. Omran retains ownership of the assets and oversight of investors, but how quickly Adra is awarded, and how quickly Hama and Muslimiyah reach full capacity, will largely determine whether Syria’s reconstruction is built with domestic or imported cement.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: At a Ministry of Energy seminar during the Damascus International Fair on September 2, Obada Mobayed, director of Water Sector Regulation at the ministry, said Syria consumes around 18 billion cubic meters of water a year against 16 billion in renewable resources. The two-billion-cubic-meter gap is covered mainly by groundwater and lake reserves. Agriculture accounts for around 88% of use, and dam reservoirs remain below 50% in the south and below 20% in Daraa and Quneitra despite last winter’s rainfall.

Energy Minister Mohammad al-Bashir told the People’s Assembly on September 20 that the flow of Ain al-Fijeh, Damascus’s main spring, had fallen from 40 cubic meters per second (m³/s) historically to around 1.5 m³/s. He said random drilling had dried out the Yarmouk basin, with an initial count of some 50,000 such wells in Daraa. Daraa Governor Anwar Taha al-Zoubi had given a similar figure on September 7, adding that 76 unlicensed drilling rigs had been seized since the fall of the regime. The governorate’s 16 dams, with a combined capacity of 92.5 million cubic meters, held less than 4 million in 2025, down from 65 million five years earlier. The governorate set a September 16 deadline before sealing illegal wells. A draft water law with deterrent penalties is with the General Secretariat of the Presidency.

The price of water depends heavily on whether a household is connected. Al-Bashir said piped water costs around (old) SYP 7 per cubic meter, and acknowledged that tariffs do not cover production costs. That is the 6–15 m³ tier set in August 2014, which the September 2023 increase left untouched, and works out to (new) SYP 0.07 (USD 0.0005). Tanker water in Daraa costs around USD 5 per 1,000 liters. Off the network, tanker water reached (old) SYP 300,000 (new SYP 3,000; USD 21.7) per load in Daraa’s Tal Shehab. In Shahba, Suweida, an 11-day power cut halted pumping and pushed the price of a tanker to around (old) SYP 600,000 (new SYP 6,000; USD 43.5). The governorate blamed that outage on attacks on the grid.

In the al-Bab area, MP Osama al-Nous said residents pay the equivalent of (old) SYP 2,700 per cubic meter (new SYP 27, USD 0.20) to private suppliers, and demanded equal treatment with the rest of the country. Al-Bashir promised a future review of tariffs in Idlib and northern rural Aleppo.

On repairs, the minister said service had been restored to 2.3 million people, 1,051 wells had been rehabilitated, and five wastewater treatment plants were planned. Most of the country’s wastewater still flows untreated into rivers, lakes, and the sea. Rehabilitating Aleppo’s treatment plant alone is estimated at USD 400 million, for which the ministry is seeking international financing.

On the Euphrates, al-Bashir said inflows from Türkiye had risen from around 200 to around 1,000 cubic meters per second. Haitham Bakour, director general of the General Establishment of the Euphrates Dam, put them at around 1,200 m³/s. The minister said Türkiye gave one day’s notice before raising releases earlier this year. He also said that encroachments on the riverbed mean 2,000 m³/s would cause problems, although the channel was designed for 3,000. The ministry opened spillway gate No. 6 at the Euphrates Dam, the first time in over 30 years, and scheduled releases of 1,200 m³/s until mid-October. By September 28, 11 water stations in Deir Ezzor had gone out of service, after floods in May and August had already affected around 50 stations in Raqqa and Deir Ezzor.

The longer-term pipeline is large but mostly at the study stage:

• Tigris–Khabour transfer: Designed to irrigate some 215,000 hectares, which al-Bashir costed at USD 2 billion and said would be offered for investment alongside the Halabiyeh–Zalabiyeh dam.

• Euphrates–Hisyah carrier: Priced at USD 571–572 million for 3 m³/s of mainly industrial and drinking water.

• “National carrier”: Would pump coastal freshwater to Damascus; its initial estimate stands at around USD 9 billion, with only a study contract signed.

• Desalination and transmission study. On September 7, ACWA and the Water Transmission Company signed a technical services agreement with the ministry and Germany’s Fichtner.

Subscribe now

Why It Matters: Water scarcity in Syria is not new, and Marwa Daoudy’s The Origins of the Syrian Conflict argues that it was primarily the product of policy rather than climate. The Ba’athist drive for food self-sufficiency put wheat and cotton under irrigation, so between 2001 and 2010, 70% of public investment in agriculture went to irrigation. Cheap diesel and nominal water fees made pumping groundwater almost free, and by 2009, unlicensed wells (around 108,000) outnumbered licensed ones (102,000), despite repeated bans and amnesty-style licensing campaigns. The Khabour, overdrawn to around three times its basin’s safe yield, fell from 60 m³/s to zero in 2001. When the drought of the late 2000s hit, the 2008 lifting of fuel subsidies tripled diesel prices just as farmers in the northeast most needed to pump. Daoudy’s broader point is that drought became a human-security crisis because of who was exposed to it and how the state had managed water beforehand.

The same lens fits today, because the burden of scarcity falls very unevenly, as a household connected to the public network pays (new) SYP 0.07 per cubic meter for its first 15 cubic meters (+/- USD 0.0005), a tier set in 2014 and left untouched by the 2023 increase. A household in western Daraa buying from a tanker pays around USD 5 for the same cubic meter, roughly 10,000 times more, in a region where monthly salaries run between USD 75 and 150. The tariff subsidy reaches those already connected, while those with broken networks, those whose pumps depend on an unreliable grid, as in Suweida, or those in areas served by private suppliers, as in al-Bab, pay market prices. Any move toward cost-based pricing, which the ministry is reportedly considering, will need to start from that gap. Otherwise, it risks raising bills for the connected while doing nothing for those outside the network.

Agriculture is where the volumes are, and it remains the economy’s main exposure to drought. The 2024/25 season was the driest since 2007/08, at around 72% of the 1991–2020 average across the country’s cropland (The Syria Dispatch calculations based on FAO data). Last winter’s rains were well above normal in the north, east, and coast, but only around normal in Daraa and below it in Rural Damascus. Daraa’s reservoirs remain below 20% after a roughly average season, which suggests the binding constraint in the south is now groundwater extraction rather than rainfall. With agriculture using around 88% of the country’s water, irrigation efficiency is the obvious lever. The framing matters, however. Mobayed suggested that better irrigation could double the irrigated area to one million hectares with the same quantity of water. In a country already drawing two billion cubic meters a year beyond its renewable resources, efficiency gains spent on expanding cultivation would leave the deficit, and the aquifers, where they are.

As springs and reservoirs fail, farmers drill, and each new well lowers the water table for its neighbors, leading to, for example, groundwater levels in parts of Daraa dropping by five to 10 meters.

In the 2000s, diesel costs acted as a rough brake on pumping, which is why the 2008 price shock hit farmers so hard. Today, solar-powered pumps have accelerated extraction by bringing the marginal cost of pumping close to zero, and the latest fuel price increases (see “Fuel Price Hike Triggers Nationwide Protests as Damascus Turns Back to Local Refineries”) will only strengthen that shift. Sealing wells is the governorate’s answer, but many wells supply drinking water to whole communities, and some cost their owners tens of thousands of dollars. Enforcement without an alternative supply will be resisted, as it was under the previous regime. That regime’s bans and licensing campaigns failed because it lacked monitoring capacity in the countryside.

A better water policy would look less like the project pipeline the ministry presented to Parliament and more like basin management. The Tigris–Khabour transfer, costing USD 2 billion, is the same scheme for which Russia’s Stroytransgaz signed a USD 2 billion contract in 2014 that was never executed. The coast-to-Damascus carrier stands at around USD 9 billion with only a study contract signed. Both depend on finding investors for projects whose returns rest on water priced at almost nothing today.

Cheaper measures would deliver sooner: metering wells and charging for abstraction; a water law that distinguishes a farmer’s livelihood well from commercial over-pumping; a tariff with a protected lifeline tier; and repairs to networks that lose water before it reaches anyone.

The Euphrates adds a final irony. The 1987 protocol with Türkiye guaranteed a minimum of 500 m³/s only “until the final allocation” among the riparians, which has never come. This autumn, Syria is releasing around 1,200 m³/s that it cannot store, after Türkiye gave one day’s notice, while the south runs dry. Without a flow agreement and without the means to move or store surplus water, the country remains exposed to both drought and flood from the same river.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: Cotton picking began in rural Raqqa in mid-September and in southern Hasakah on September 16, with the rest of Hasakah governorate following within abouttu ten days. Hasakah’s deputy agriculture director, Ezzeddin al-Hasso, described the crop as in good condition with limited pest damage. Mohammad Maari, head of the Ministry of Agriculture’s Cotton Office, said early indicators in Raqqa pointed to good production.

Raqqa farmers, by contrast, reported weak yields, often no more than 300 kg per dunum (3,000 kg per hectare); though it should be noted that such a yield would be in line with or slightly above recent years, based on Syrian government figures (see chart below), but well under pre-2012 figures. Ministry data put the planted area at 26,593 hectares (25,810 last season) and expected output at 79,467 tons (69,587), figures that fall well short of the 50,000 hectares and 150,000 tons Maari announced as the plan in April.

Hasakah planted 11,898 hectares against a 7,300-hectare plan, for an estimated 45,000 tons. Deir Ezzor went the other way: it produced 4,500 tons on 2,300 hectares in 2025, but farmers’ union head Hamad Abboud al-Khader said cotton had almost disappeared there this season. He cited production costs, fuel and electricity prices, and delays in paying farmers’ dues.

There seems to be confusion on whether a purchase price has been set. On August 4, the Ministry of Agriculture announced a purchase price for this season’s cotton of (new) SYP 85 per kg (USD 0.61 per kg; USD 610 per ton) against an estimated production cost of SYP 71 per kg (USD 0.51 per kg; USD 510 per ton), split between the Agricultural Production Support Fund providing SYP 30 and the General Establishment for Cotton Ginning and Marketing providing the remaining SYP 55. On September 18, however, Raqqa farmers complained that no price had yet been set, while two days after, Maari said one would be issued “in the coming period.”

Raqqa farmers demanded a price covering their costs, which some put at no less than USD 900 per ton, citing fertilizer at USD 800 per ton and picking labor at USD 150 per ton. By the end of September, private traders were offering no more than USD 700 per ton, while a farmer put circulating prices at USD 750–850, levels he said would not cover his costs. A Raqqa cotton ginner added that some cotton had sold at USD 650–700 per ton. He complained that exports via Türkiye were blocked because Türkiye requires a fumigation agent that Syria bars from import.

It should be noted that the recent increase in the price of fuel might have a devastating impact on the cotton season, given that diesel rose 40% to SYP 175 per liter on September 13, triggering road-blocking protests across farming areas of Hasakah, Raqqa, and Deir Ezzor and leading to localized fuel shortages.

Hasakah farmers said fuel shortages forced them to cut irrigations and that they had received no direct support, which Maari had acknowledged in April was limited to subsidized seed. Water shortages also added pressure, as a Raqqa farmer said the network water never reached his land, forcing 13 diesel-pumped irrigations as a barrel of diesel rose from USD 100 to USD 300 over the season.

On marketing, an agricultural official said the state was ready to receive the crop against Directorate of Agriculture certificates and to truck it at its own expense to gins in Aleppo and Hama. Hasakah farmers, pointing to the wheat season, said knowing who will buy the crop and how quickly they will be paid matters as much as the price.

Subscribe now

Why It Matters: Cotton was long Syria’s “white gold”. Around 2000, it was the country’s most important export after oil, and the industry reportedly employed about half a million people. It fed a textile sector whose public-sector exports alone were worth about USD 195 million in 2010, and which President Ahmad al-Sharaa presented in July, at the opening of NASTEX 2026, as a way out of poverty. Even on the ministry’s own estimate, this season’s crop is barely an eighth of the 671,700 tons harvested in 2011 (see table). It is also well short of the roughly 250,000 tons of raw cotton that the country’s mills need. Because almost all of the crop is now grown in Raqqa, Deir Ezzor, and Hasakah (see map), every hectare taken out of cotton costs picking, trucking, and ginning work, and farm income in the east.

The confusion over the price looks at least as much like a problem of integrating the northeast as a fiscal one, since Damascus is extending its institutions into the northeast, as it did with the oil sector in August. Until recently, cotton growers there dealt with the Autonomous Administration, which set its own price in dollars (USD 800 per ton in 2023) without committing to buy the crop. They now face a ministry price in Syrian pounds that, six weeks after it was announced, had apparently not reached Raqqa farmers or had not convinced them.

Financially, the price level is part of the problem, too, since at around USD 610 per ton, it is below what private traders are offering and well below the USD 900 farmers say they need. As a result, the state’s offer to truck the crop to the gins in Aleppo and Hama at its own expense counts for little if growers sell elsewhere. With exports through Türkiye blocked, however, private buyers have few outlets beyond Syria’s own mills. Farmers are left choosing between a state price that does not cover their costs and a private market that may weaken as the harvest comes in. The wheat season, in which dues remained unpaid months after delivery, gives them little reason to trust the state buyer even at a comparable price.

Finally, while higher fuel prices might affect this season to some extent, they will weigh even more on the next one. The September diesel increase came at the end of an irrigation season farmers had already paid for, but it will now feed fully into next spring’s planting decisions, along with higher electricity prices for pumping and fertilizer and labor priced in dollars. Deir Ezzor, where the crop has almost disappeared, shows how quickly growers abandon cotton once margins vanish, and Hasakah, which planted well beyond its plan, shows they come back when the numbers work. Planted area has been stuck at around 26,000 hectares for two years, and the 50,000-hectare plan is out of reach.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: Owing to one of the most prolific wheat seasons in years, with procurement closing at 2.75 million tons, the General Authority for Supply and Procurement put 200,000 tons of second- and third-grade durum, deemed surplus to milling needs, up for sealed-bid sale on September 17, with bids closing on October 20.

Yet, following up on The Syria Dispatch’s coverage over the past three months (July 1, August 2, September 6), payment of wheat dues remains incomplete, months after farmers sold their harvests to the government. Daraa’s Izraa branch had paid 38% of dues, about (old) SYP 500.3 million of a SYP 1.3 billion allocation, by September 1. In Hasakah, branch head Azzo al-Hamed said on September 6 that payment had been completed only for grain delivered up to June 17, and he tied disbursement to the Grain Establishment’s lists and Central Bank cash transfers. In Raqqa, farmers with invoices dated June 9–17 were still unpaid in early September. Near Qamishli, farmers who delivered in May were still waiting on September 24, with payments limited to one invoice or installment a week. In Hasakah, governorate officials promised to settle all invoices by the end of October, including those of farmers who delivered to Damascus and Homs (full silos, relocated storage sites, and risks at some silos led some farmers to deliver their harvests outside Hasakah).

Despite the difficulties, farmers’ protests have been relatively scarce, with two events recorded in late August and early September. Farmers in Ras al-Ain protested on August 30 for their dues and a local bank branch, while on September 3, Daraa farmers gathered on the Damascus–Daraa highway before heading to the Ministry of Agriculture, demanding protection, lower taxes, and guaranteed marketing at fair prices.

Minister of Agriculture Basel al-Suwaidan blamed payment delays on scarce new-currency notes, difficulty moving cash, security conditions in the east, and unprepared bank branches. He said payment is the Grain Establishment’s responsibility, not his ministry’s.

Payment delays clashed with loan repayment management as, in Raqqa, farmers said input debts of around USD 1,000 had, in some cases, doubled, and some farmers were avoiding creditors’ calls. One farmer in Hasakah said the contractors who harvested and transported his crop were demanding cash, not app transfers (i.e., via Sham Cash) or installments. In Hasakah, the Agricultural Cooperative Bank (ACB) deducted farmers’ outstanding fertilizer and seed loans from their wheat payments before paying them out. Some farmers alleged favoritism in who got paid, and brokers bought invoices at a discount. On Sham Cash, near Qamishli, brokers reportedly asked 7–10% to pay dues through the app.

The implications of payment delays for the upcoming wheat season have been laid out by the farmers themselves, with farmers in Hasakah warning that the delays left them unable to prepare their land, with some considering turning it to other uses. One Raqqa farmer said he could not buy fertilizer and seed and feared payments would run into February, while others warned they could leave land unsown, with plowing alone costing about USD 20 per dunum, and called for payment before planting. Delayed payments also affect more than wheat, as one farmer noted, who borrowed to finance maize and cotton that he normally pays for with wheat earnings (read “Cotton Harvest Opens Amid Price Confusion as Fuel Costs Squeeze Growers”).

Regarding the next season, the General Organization for Seed Multiplication announced it will distribute certified seed from November to February, sold for cash or on credit through the bank. Its director general, Ammar al-Mohammad, urged reopening bank branches in all governorates and issuing any seasonal loan decision before planting. Distribution in Homs was still awaiting the ministry’s seed price on September 29. Officials are confident that the season will go well, with Hasakah’s deputy agriculture director, Ezzeddin al-Hasso, expecting the wheat area to double.

For the northeast, the organization’s 2026–27 plan allocates certified seed to Hasakah, Raqqa, and Deir Ezzor, while local experts warned of mixed and impure seed in the markets.

Subscribe now

Why It Matters: Previous editions covered how the payment problem developed through an open-ended purchase commitment at a fixed price, financed with an allocation that fell short of the bill. Its less visible consequence is that the delays have eroded the price itself. Decree No. 120 raised the effective price from (new) SYP 46,000 to SYP 55,000 per ton. However, a farmer who sold to a cash buyer in July at around 20% below the official rate received roughly SYP 44,000, less than the price that triggered protests in half of Syria’s governorates in May.

A farmer who paid a broker 7–10% to cash out dues gave back more than half of the bonus. Meanwhile, the state has used farmers’ money interest-free for three to five months. Since farmers’ leverage peaks before delivery, as the May threats to withhold grain showed, and disappears once the grain is in the silo, many may draw the obvious lesson next season. They could hold back grain, sell to traders paying cash on the spot, or deliver only once payment terms are clear. Shifting official explanations will not help. The minister cited liquidity and security, while Hasakah’s deputy governor cited full silos, and two competing deadlines (end of October in Hasakah, end of November in the bank’s circular) now set a public test for the next harvest.

More importantly, farmers are making 2026–27 planting decisions without the information they need. The seed price was not set by late September, no seasonal loan decision has been issued, diesel rose 40% on September 13, and next year’s purchase price is unknown. Planted area may well hold up, since rainfed wheat is cheap to sow and many farmers kept seed. The more likely adjustment is cash-constrained farmers cutting fertilizer, certified seed, and irrigation, which will not show in sowing statistics but in next summer’s yields, unless rainfall masks it again.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On September 16, the Ministry of Finance launched Syria’s first syndicated bank financing under an Islamic structure. It brings together the state-owned Commercial Bank of Syria and two private lenders, Al Baraka Bank Syria and QNB Syria, to fund the Al-Mujtahid–Bab Musalla tunnel and the final phase of the “Qasioun Journey” project in Damascus. The facility reportedly carries a sovereign guarantee, and while its value, tenor, profit rate, and the split between the three banks were not disclosed, The Syria Dispatch learned from two sources in Damascus that the loan amounts to USD 25 million, split roughly equally among the three banks.

The agreement was signed in the presence of Finance Minister Mohammad Yisr Barnieh, Central Bank Governor Mohammad Safwat Raslan, and the Governor of Damascus, as Barnieh described the facility as the first of its kind. He said it could open the way to financing larger projects for the public sector, economic institutions, and governorates through bank facilities and sukuk, two months after the first sovereign sukuk was floated. Damascus Governor Maher Marwan Idlibi said the two-kilometer tunnel linking west and east Damascus should take two to two-and-a-half years to build instead of the ten years foreseen under conventional planning. He also said that the Qasioun project is scheduled to open in summer 2027, and that the financing had been reviewed by the Supreme Fatwa Council and the participating banks, with limited profits and easier repayment terms.

Other banks also moved toward a return to lending during the month as, on September 17, the board of the state-owned Industrial Bank, chaired by Barnieh, approved its 2027 lending plans and discussed a joint facility with other banks to finance new production lines for damaged industrial facilities. Two days earlier, the private Cham Bank had signed a memorandum to finance purchases of housing units in Damascus’s Marota City, reportedly the first home-purchase financing announced by a Syrian bank since the fall of the former regime. It did not disclose amounts or terms.

On September 17, Qatar-listed Estithmar Holding announced it had completed the transfer of a 48.68% stake in Shahba Bank, formerly Byblos Bank Syria, from Banque Bemo Saudi Fransi and Ahli Trust Bank to its subsidiary Masaref Holding. Reuters had reported in January that Estithmar would take a 60% majority. The agreement signed on April 26 covered 49%. The company, chaired by Syrian-Qatari businessman Moutaz al-Khayyat, said it would work with the bank’s board on several proposals:

• a capital increase

• new branches in underserved areas such as Deir Ezzor, Hasakah, and Qamishli

• digital upgrades

• trade-finance and SME products

All of these remain subject to feasibility studies and Central Bank approval. Raslan welcomed the investment, provided it meets legal, regulatory, and governance requirements.

On September 27, Raslan said he expected foreign capital for new Islamic and conventional banks to exceed USD 1 billion, in a sector that currently counts six state-owned and 15 private banks. The licensing criteria he listed include applicants’ experience, reputation, and solvency, plus a strategic banking partner holding at least 10% of the new bank. He said foreign investors may keep up to 60% of paid-up capital in foreign currency and freely transfer profits. He added that Jordanian banks had applied to enter the market, and that the Central Bank plans to require international transfer providers to pay remittances exclusively in foreign currency. Raslan also called exiting the FATF grey list the top priority. These statements came two weeks after the Central Bank launched the first locally issued, internationally accepted payment card following its reconnection to Mastercard, and a month after Saudi Arabia agreed to set up a joint bank with Syria.

On September 21, on the sidelines of the Arab Regional Conference on Supporting Development and Investment in Syria in Amman, Raslan discussed with Union of Arab Banks Secretary-General Wissam Fattouh the possible creation of a Syrian banking association. It would serve as an umbrella body coordinating banks operating in the country. The two also discussed the advice the Union could offer on drafting banking laws and regulations. Earlier that day, Raslan met representatives of Al-Ahli Bank, Bank al Etihad, the Commercial Bank, and BLOM Bank, with several Syrian private banks in attendance. The Union had announced in February 2025 a project to restructure Syria’s banking sector with European partners. A week later, on September 29, it was reported that five private banks had not yet published their 2025 financial statements. The Central Bank attributed the delay to its approvals not yet being issued.

The reasons ranged from placements in Lebanon and full provisioning to plans to address capital erosion, board reshuffles, and the appointment of external auditors. Three banks had also not published their 2024 statements. The provisioning stems from a September 2025 Central Bank directive requiring banks to fully recognize their exposure to Lebanon, then estimated at over USD 1.6 billion.

Subscribe now

Why It Matters: Syria’s budget ran a deficit of about USD 1 billion in the first half of 2026, so it makes sense, against that backdrop, for the state to pool bank resources behind a sovereign guarantee rather than tie infrastructure to whatever the annual budget can allocate. If it works, the model could be extended to larger projects for the public sector, economic institutions, and governorates, as Barnieh suggested.

The size of the facility, however, says as much about the banks as about the project. Three of the country’s largest banks, including the state-owned Commercial Bank of Syria and the Syrian arm of Qatar National Bank, had to come together to provide USD 25 million, or roughly USD 8 million each, suggesting that few Syrian banks, if any, can carry an exposure of that size on their own. For comparison, the country’s 14 listed commercial banks (which published their 2024 financial accounts) held about USD 4.9 billion in deposits combined at the end of 2024.

The constraint is capital rather than liquidity, since a bank’s exposure to a single borrower is capped as a share of its own funds, and those funds have been eroded by fifteen years of depreciation. Law No. 3 of 2010 set the minimum capital for a conventional bank at SYP 10 billion and for an Islamic bank at SYP 15 billion, about USD 215 million and USD 320 million at the time. Today the same amounts, (new) SYP 100 million and 150 million, are worth around USD 0.7 million and USD 1.1 million. As a result, given that lending capacity is quite thin, a sovereign-guaranteed loan to a governorate will look more attractive to a bank than a riskier loan to a factory, which could crowd out private-sector financing. This is what we have already warned of regarding the issuance of sukuk, or Islamic government securities.

This is why the Shahba transaction matters beyond the bank itself, given that Estithmar’s stake is the first foreign equity investment in the sector since the fall of the former regime. Given the sector’s small size, the capital increase is what it needs most among Estithmar’s proposals. Small, thinly capitalized banks that cannot lend at scale are one of the main things holding back Syria’s banking system.

Bankers who spoke to The Syria Dispatch said existing shareholders and strategic partners have so far been reluctant to put in fresh capital. Many of those partners are Lebanese banks still dealing with their own crisis, and the sellers in this case reportedly planned to use the proceeds to recapitalize their own banks rather than Shahba. If Estithmar follows through, one well-capitalized competitor could push others to do the same, but peer pressure alone is unlikely to be enough, though.

The Central Bank would also need to update the minimum capital requirement with a clear compliance timeline, as the 2010 law did when it gave banks three years. Otherwise, the sector risks splitting in two: new entrants, if Raslan’s USD 1 billion materializes, would arrive with fresh capital, while incumbents would remain undercapitalized after absorbing their Lebanon losses, and five of them still have not published 2025 accounts. (On the Central Bank’s strategy under Raslan READ here.)

The banking association should be read in the same light, and its value will depend on the legal framework around it. Syrian banking regulation is currently spread across several texts, including Law No. 28 of 2001 on private banks, Law No. 23 of 2002 (Basic Monetary Law) on the Central Bank and the monetary system, and Law No. 35 of 2005 on Islamic banks. A comprehensive banking law would be the natural place to define what an association can and cannot do.

According to the same bankers speaking to The Syria Dispatch, private banks barely communicate with each other today, apart from meetings convened by the Central Bank and informal contacts between executives. Nobody wants a cartel, and Lebanon shows what happens when a banking association becomes a lobby.

In 2022, a minister described the Association of Banks in Lebanon’s opposition to sharing losses as a threat to the IMF deal. Syria’s more immediate risk, however, is the bad apple. Exiting the FATF grey list is the Central Bank’s stated priority, and correspondent banks judge the sector as a whole. A single opaque or non-compliant bank therefore raises costs for every other bank. A forum with a clear mandate agreed with the Central Bank could do several things:

• agree common compliance and disclosure standards

• pool training and anti-money-laundering tools

• coordinate with correspondent banks

• put peer pressure on laggards

Pricing and competition would stay outside its remit, under Central Bank oversight.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On September 28, the Presidency’s General Secretariat directed public bodies to cut non-essential spending and review investment projects, at the Ministry of Finance's request. Secretary-General Abdul Rahman al-Aama signed Circular No. 41/15/B on September 23, 2026, invoking the Financial Basic Law (Legislative Decree No. 54 of 2006). It requires prior ministerial approval for travel and official missions, and cuts spending on conferences, hospitality, printing, subscriptions, and telecommunications to the minimum. It freezes purchases of furniture, office equipment, and administrative vehicles. New or renewed leases are barred where a usable state-owned alternative exists, non-urgent maintenance and office renovation are deferred, and external studies and consultancies are scaled back. Petrol and diesel allocations for government vehicles are cut by 30%, except for collective transport and vehicles allocated 70 liters or less per month, and the Ministry of Energy will report monthly on fuel consumption. Salaries and wages are exempt from the cuts, along with spending on health, education, water, energy, security, public safety and essential maintenance. Finance Minister Mohammad Yisr Barnieh attributed the measures to higher energy and transport costs tied to regional developments.

The circular also orders an urgent review of all approved investment projects, sorting them into three tiers:

• Priority projects continue within existing appropriations: those linked to essential services, public safety, asset protection or critical infrastructure, those whose suspension would cause actual harm, and those that raise revenue or output, cut costs or save foreign currency.

• Postponable projects, whose delay would not substantially affect services or economic activity, have new spending and commitments temporarily suspended.

• Non-priority projects have new spending and commitments stopped, with the Ministry of Finance reclaiming the resulting uncommitted appropriations.

Exceptions may be granted for commitments made before the circular, projects at an advanced stage, externally financed projects that would lose their funding if stopped, and projects with a documented direct return.

Splitting projects or reclassifying spending to get around the rules is prohibited. Entities may not redeploy the savings; the ministry will pool them and propose reallocating them. Public entities have 15 days to report halted spending and expected savings to the ministry, which will report periodically to the Presidency.

That same day, Barnieh said the 2027 budget would be completed in October and that he expects its deficit to be lower than this year’s USD 1.8 billion, the figure projected in the 2026 budget. At an Arab Monetary Fund workshop in Abu Dhabi the following day, he said the 2027 budget would include a medium-term fiscal framework for the first time.

Subscribe now

Why It Matters: The 2026 budget was the first full-year budget prepared by the new authorities, and it marked a deliberate shift, with the IMF attributing the small 2025 surplus mainly to spending restraint. The 2026 budget then planned spending of USD 10.5 billion, more than three times the USD 3.4 billion spent in 2025, against revenue of USD 8.7 billion. The resulting deficit of about USD 1.8 billion, some 5% of GDP, was to be financed mainly through bonds and sukuk, with some returns from the sovereign fund. The budget was, in effect, a bet that revenue would materialize quickly enough to fund a much larger state. That revenue was expected to come from oil and gas, which should provide around 28% of receipts, and from one-off items such as the second mobile license.

As The Syria Dispatch noted last month, the first half of the year showed that the budget is under strain, with the deficit reaching 56% of its annual allowance in six months. The minister had already lowered full-year revenue expectations to close to USD 8 billion, and the ministry warned that spending would accelerate as the wage increase took full effect. At that pace, the deficit was on course to overshoot by several hundred million dollars, with no sukuk yet issued and no domestic market able to absorb one. The September circular is effectively the government’s acknowledgment of that trajectory, and best read as a commitment to hold the line at the budgeted figure.

Choosing to cut spending deserves credit, because fiscally stretched, fragile, and post-conflict states typically fall back on two forms of financing that require no one’s agreement. The first is arrears to suppliers, which the IMF describes as “forced financing”, while the second is debt monetization, which the IMF counts as a standard feature of fragile states. The current government has so far avoided the second, a break with the former regime’s practice.

Yet whether Syria is also avoiding arrears is harder to establish because the budget is kept on a cash basis (Article 5b of the Financial Basic Law), meaning deferred payments to contractors would not show in the reported deficit, and the ministry has not disclosed how it financed the first-half gap.

What can be said is that the ministry published mid-year execution data that made the problem visible and proposed corrective measures within weeks. It protected wages and core services, and attached deadlines and reporting lines to the process. The measures also start in the right place: administrative spending had executed 65% of its annual allocation in the first half, the fastest of any category.

The circular also relies on a tool that the Financial Basic Law provides for exactly this situation:

• Article 7(a) requires the budget to be prepared with regard to the balance between expenditure and revenue, a principle loose enough to accommodate the 2026 budget’s planned deficit.

• Article 7(b) allows the suspension of certain expenditure commitments, on the Finance Minister’s proposal, when needed to preserve that balance. The circular explicitly invokes this provision.

The law vests the Article 7(b) power in the Council of Ministers. Under the Constitutional Declaration, however, the president is also head of government, and the Presidency’s General Secretariat exercises the power. The ministry’s 2025 draft of a new Financial Basic Law would formalize the General Secretariat’s role in the budget process, but a year on, the government is still operating under the 2006 text.

It should be noted that the Financial Basic Law also sets the timetable for the 2027 budget to meet:

• Article 13: The draft must reach the legislature at least two months before the fiscal year begins, which leaves until the end of October.

• Article 6: If the budget is not approved by January 1, spending reverts to monthly one-twelfths of the previous year’s appropriations, as happened throughout 2025.

• Article 16: Any supplementary appropriations require legislative approval in the same way as the budget.

• Article 32: The closing accounts must ultimately be approved by law.

While the People’s Assembly only convened in July after the 2026 budget was issued, the 2027 budget is therefore set to be the first to go through that full process.

Back to the 2026 fiscal year, the limits of the exercise are clear. Savings on travel, hospitality, furniture, and fuel are modest compared with a wage bill that made up 36% of first-half spending and will depend on compliance, largely self-reported by the ministries concerned. As a result, most of the adjustment is likely to fall on public investment, which already accounted for about USD 1 billion, or 28%, of first-half spending, and it is the part of the budget most directly tied to reconstruction. The exemption for externally financed projects will relatively protect donor- and loan-funded work. The flagship Gulf-backed investments are largely privately financed and sit outside the budget; their exposure lies instead in the sovereign guarantees the minister says will be used sparingly.

Three disclosures would make the exercise more credible: the list of projects in each tier, a numerical savings target, and how the remaining deficit is being financed, a gap already noted in last month’s edition. The minister also stated that wage increases were financed from real resources rather than deficit financing, which sits uneasily with the ministry’s own attribution of the first-half deficit primarily to wages. The 2027 budget will show whether the lesson has been absorbed, depending on whether it rests on the conservative revenue estimates the IMF has called for rather than the assumptions that produced this year’s overshoot.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On September 12, the Permanent Committee for Determining the Prices of Petroleum Products and Mineral Resources, established under Decision No. 844 of 2026, issued a “temporary” price bulletin effective the next day, raising diesel from (new) SYP 125 to SYP 175 per liter (USD 0.95 to USD 1.27), 95-octane gasoline from SYP 152 to SYP 195 (USD 1.10 to USD 1.41), and 90-octane gasoline from SYP 147 to SYP 185 (USD 1.06 to USD 1.34). The previous prices had themselves been set only on September 4, through a daily bulletin rather than a formal decision, after a summer of repeated adjustments. The latest hike more than doubled the cumulative increase since February for diesel and raised it to about 86% for 95-octane gasoline, compared with roughly 44% for Brent.

The Ministry of Energy attributed the rise to the global cost of refined products, with diesel near USD 1,400 per ton, and to a comprehensive two-month overhaul of the Baniyas refinery, which Minister of Energy Mohammad al-Bashir later said would lift its capacity to around 130,000 barrels per day. The ministry put imports at around 60% of daily diesel supply and domestic crude output at about 100,000 barrels per day against needs of around 300,000, while official estimates of demand that week ranged up to 350,000. The ministry also reported that the Syrian Petroleum Company (SPC) was owed USD 1.7 billion by the Syrian Electricity Company for 2026. At the parliamentary hearing on the price increase, Bashir said that a Qatari grant covering about half of Syria’s imported gas for power generation had ended in August, leaving the ministry buying all of it at around USD 140 million a month. Because the Ministry of Finance had not budgeted the full bill, gas purchases would be cut by 2–3 million cubic meters a day, reducing electricity supply hours.

Protests began on September 13, the day the new prices took effect, in Markada and across the Hasakah, Deir Ezzor, and Raqqa countryside, where demonstrators blocked crude tankers heading to the interior, echoing the June unrest in Qamishli. They spread to Azaz and al-Bab in the Aleppo countryside and to Hama, Khan Sheikhoun, and Maarat al-Numan, in what was described as the most widespread unrest since Assad’s fall.

On September 17, after meeting President Ahmad al-Sharaa, Bashir announced three diesel grades: (new) SYP 115 (USD 0.83) per liter for heating, agriculture, and eligible groups; SYP 150 for transport, heavy machinery, and some productive uses, secured with unnamed “brotherly countries”; and SYP 175 (USD 1.27) for standard diesel, which he said costs SYP 206 (USD 1.49) per liter at a diesel price he put at USD 1,590 per ton (Note: SYP 206 was worth USD 1.59 at the time of the declaration). Standard diesel would be sold at all stations, the SYP 150 (USD 1.09) grade at 80–85% of them, and the SYP 115 (USD 0.83) grade at around 15%, selected by committees in each governorate. Bashir explained that the ministry had delayed raising prices until SPC’s losses ended its transfers to the Treasury, and the Ministry of Finance pressed for revenue.

The cheapest grade will come entirely from local, electrically powered refineries with a combined capacity of 35,000 barrels per day, run under SPC supervision on crude that SPC CEO Youssef Qablawi said would come from Rmeilan or Deir Ezzor. Bashir described the plan as an expansion of an existing Hasakah contract from about 17,000 to 35,000 barrels per day, the units’ full capacity, using surplus heavy crude that Baniyas cannot process and that had previously been exported, and acknowledged that the units are uneconomic and environmentally harmful. Most of these units sit around the Rmeilan, Suwaydiyah, and Tal Adas (Gir Zero) fields in Hasakah, where crude deliveries stopped in August when Al-Jazira Oil Services Company’s supply arrangement expired, cutting diesel to bakeries, transport, and generators from August 30.

On September 9, Hasakah Deputy Governor Ahmad al-Hilali met with generator owners who were asking for diesel allocations, and the following day, some refineries at Tal Adas and Suwaydiyah reportedly resumed work under a six-month agreement with SPC. Earlier, on September 3, more than 1,000 workers from these refineries protested their dismissal and blocked the road to Rmeilan, claiming they had been promised integration into SPC after a three-month contract with US firm HKN paid in dollars. The return to local refining comes weeks after SPC completed the removal of some 2,000 primitive refineries in Deir Ezzor and Hasakah, and months after protests over the closure of makeshift refineries in Aleppo. Qablawi also announced plans to bring a ready-built refinery to the east and to build three more.

The effects of the hike spread quickly to services: in Hasakah, the fare to Qamishli rose from (new) SYP 300 to SYP 500, and water deliveries reached SYP 750 per cubic meter. Abdulrazzaq Habazza, secretary of the Consumer Protection Association, estimated that low-income workers could spend about 30% of their wages on transport, and that goods prices had risen around 15%. He warned that the three-tier system had been launched without an implementation mechanism, inviting mixing between grades, a risk Bashir himself acknowledged. The Minister also told Parliament that the Ministry of Social Affairs had yet to complete the database of vulnerable households on which targeting of the cheapest grade depends.

Shortages persisted alongside the price rise, which might have also exacerbated them. On September 24, Hama’s energy services directorate closed five of the city’s roughly ten stations for a week to halt fuel orders; one owner said he had cut orders for fear of an official price cut that the Syrian Company for the Storage and Distribution of Petroleum Products (SADCOP) would not compensate, while residents reported hour-long queues and street-vendor petrol at (old) SYP 25,000 per liter (new SYP 250, USD 1.81). In Sweida, petrol deliveries had already been limited to two orders a day since July, with more than 200 mobile sellers charging new SYP 230–250 per liter (USD 1.67-1.81).

Separately, the Damascus Governorate ordered private generators off public sidewalks by September 30, and owners warned they would pass relocation costs on to subscribers.

Subscribe now

Why It Matters: The ministry’s arithmetic is hard to dispute. At USD 1,590 per ton, every liter of standard diesel sold at SYP 175 still loses SYP 31, and SPC can no longer cover both its imports and the roughly USD 250 million a month it had been transferring to the Treasury. The government has done little to explain why fuel became more expensive just weeks after Damascus completed its takeover of the northeast’s oil fields, a recovery presented as the end of the country’s energy dependence.

Part of the answer surfaced only at the parliamentary hearing, a week after the hike, when the Minister said that 80,000 of the 100,000–110,000 barrels produced each day are heavy crude that Baniyas cannot refine. At the same time, the state’s supply obligations doubled: the ministry now supplies Hasakah, Deir Ezzor, and Raqqa, and has shut the burners that met 5–10% of demand. Taking the fields added consumers faster than usable barrels, a point not lost on MPs, recalling earlier promises that Syria would not import a liter of products.

The gap is sharpest where the oil comes from: the governorates that watch crude trucked west were the first to block the trucks, as Qamishli did in June. It also falls on households with little margin left, in a country where about 90% of people live below the poverty line. The 550% wage increase that SPC’s transfers helped fund is being eroded by the same fuel bill, widening the distance between the recovery described in Damascus and what people pay at the pump, the bakery, and the generator.

Agriculture and industry carry the second-round effects. In the northeast, irrigation pumps, tractors, and harvest transport run on diesel. The hike came at the end of a cotton season in which a Raqqa grower said a barrel had already risen from USD 100 to USD 300, and in which the crop has almost disappeared from Deir Ezzor (see “Cotton Harvest Opens Amid Price Confusion as Fuel Costs Squeeze Growers”). It also came as farmers prepare to plant wheat while many are still owed for last season (see “Unpaid Wheat Dues Shadow the New Planting Season as the State Sells Its Surplus”).

The SYP 115 grade meant for them is waiting on a beneficiary database that the Ministry of Social Affairs has not completed. Industry is partly cushioned on fuel oil, sold at USD 400 per ton against an import cost of about USD 570, but not on electricity. With the Qatari gas grant over, the ministry plans to cut gas purchases by 2–3 million cubic meters a day, which means fewer supply hours for industry, which takes about 40% of power. Bashir’s claim that fuel is only about 2% of production costs does not hold for energy-intensive producers. Energy exceeds two-thirds of Omran’s clinker costs and makes up about half of Al-Badia’s, which is why Omran has stopped producing clinker and now grinds imported clinker instead (see “Cement Demand Returns to Pre-War Levels as Syria Turns to Imported Clinker to Fill the Gap”).

The three-tier system eases immediate pressure but introduces new risks, as a SYP 60-per-liter gap between the cheapest and the standard grade strongly incentivizes diverting subsidized diesel or blending it into the standard product. Bashir acknowledged as much, noting that three grades need around ten inspection rounds instead of one or two, and that a four-day gasoline shortage had already produced 172 station violations.

Subsidized bakery diesel was itself resold on the market until support was switched to flour. The cheapest grade will also depend on discretion: governorate committees will sell it at about 15% of stations. Its supply comes from burner refineries whose doubling to 35,000 barrels per day was handled as an extension of an existing Hasakah contract, while MPs’ questions on operating costs and on who measures crude in and diesel out went unanswered. That sits uneasily with the USD 28 million fraud uncovered in Deir Ezzor over the summer, and with the burner closures the ministry had presented as a health and environmental priority.

Bashir ruled out announcing price changes in advance because it invites hoarding, a real risk, as Hama’s station owners showed. But publishing the pricing formula and a schedule for phasing out subsidies is not the same as announcing the date of each change. Combined with direct cash support for the poorest households, it would leak less than three grades of diesel and make the next increase easier to explain.

Leave a comment

Continue Reading the September 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Introduction: what the energy hearing tells us

For more than four hours over two sessions, Syria’s new People’s Assembly questioned Energy Minister Mohammad al-Bashir. The fuel price increase and the protests that followed triggered it; though the hearing’s scope was widened to everything his merged ministry now covers: oil, gas, electricity, water and mining. The Parliament’s Energy Committee sent the Minister about 40 written questions in advance, which he answered with a long presentation of figures and timelines before taking questions from the floor.

As noted previously, a Minister sitting before elected representatives, on the record, to explain a politically costly decision and defend his sector’s numbers, is new in Syria. The hearing’s format is therefore the first story, as it tested accountability for the transitional government and the new MPs: would they press the executive on how the decision was made? How would the Minister respond? Whatever one makes of the answers, a precedent has been set, and the committee chair closed by asking for such hearings to become regular. Whether they do will say a lot about how much oversight the new institutions are willing to exercise, and to tolerate.

Overall, the questions were good, well-researched, and sometimes even sensitive, such as when Laith al-Balous asked about Tayba Petroleum. Some questions were grounded in constituencies: a transformer station in al-Rusafa idling 110 wells, broken pumps at Maskanah East, flood risk in Raqqa and Deir Ezzor. Others went straight to governance. MPs asked whether fuel contracts are tendered or awarded directly, in breach of Contracts Law No. 51 of 2004, and invoked a “phobia” of a return to Qaterji- and Hamsho-style intermediaries. They asked whether certain stations are favored in fuel allocations, and demanded a copy of the UrbaCon contract and a live hearing with the head of the Syrian Petroleum Company (SPC).

In reply, the Minister provided a significant amount of figures which now represent the most detailed public account of Syria’s energy balance since the transition, and several deserve a closer look.

Oil production is about 110,000 bpd (107,000–112,000) against a need the Minister now puts at 300,000, so domestic output covers barely more than a third of demand, but refining capacity is only about 150,000 bpd. When the ministry was founded, need was 150,000 bpd, meaning that the two refineries covered it.

The gap is much wider for household gas: LPG demand is 1,300–1,500 tons a day against domestic output of about 100 tons, meaning more than nine-tenths of the cooking gas Syrians use is imported. Daily consumption is about 10,000–11,000 tons of mazout (about 12 million liters) and about 8 million liters of gasoline. Gas output rose to 8.1 mcm/d after part of the Conoco plant came online, reached 8.4–8.5 mcm/d the day before the session, and has touched 9, against 24 mcm/d needed.

On his own worked example, a liter of mazout costs SYP 206 to supply and sells for SYP 175. This means that at about 12 million liters a day, a SYP 31 loss per liter is about SYP 372 million a day, or roughly USD 2.8 million at 135 SYP/USD, around USD 80 million a month. This is a ceiling, since part of the volume now sells under the cheaper grade, which the Minister says breaks even, and not all diesel is imported at that cost. Still, the order of magnitude explains the price rise better than the “global refining crisis” framing he also leaned on.

The Minister also provided interesting insights on various procurement and contracting procedures, in what can be considered the most transparent bout of public reporting. When asked “where are the tenders?”, the Minister replied that “we are buying diesel at auctions at sea”. The line was meant as a rebuke, but it is also a revealing admission: Syria is buying spot cargoes in a tight market, with no term contracts and little bargaining power. He argued the government-to-government supply deals he wants (with Saudi Arabia, Kuwait, Libya) are still out of reach.

The same emergency logic justifies direct contracting (التراضي): tendering for transformers would leave a neighborhood dark for two months, and an external tender alone takes 50 days. The argument is reasonable for a genuine emergency. The problem is that, more than a year into the transition, the emergency has become the rule… and seems to be a convenient excuse, so is the “we could also go back to 2 hours of electricity per day” rebuttal, which seems a bit of an easy way out of some questions.

Most striking still was his statement that some contracts follow the state’s “political orientation”. Since Chevron and ConocoPhillips carry weight, and an Arab energy Minister had told him that bringing them in “will open the doors to all companies”, the Ministry privileged contracting with them. This is a candid acknowledgment that energy contracts are being awarded partly as signals, privileging American majors so that others follow, but it also makes the transparency questions MPs raised about UrbaCon and other contracts more pressing, not less.

The Minister may also have provided insight into potential cooperation with an Iranian company that previously worked in Syria. Indeed, Iran’s MAPNA Group started the Rastan power plant (526 MW), which halted work after the regime fell, but which the ministry says it is now negotiating with companies to complete it. He did not say whether MAPNA is among them; given the “political orientation” he described, that is worth asking.

The Minister also highlighted interesting tug-of-war dynamics between his Ministry and the Ministry of Finance, exposing open tension between the two. SPC has been transferring about USD 250 million a month to the treasury since oil came under state control, which the Minister credits with helping fund public-sector wage rises. Last month (August 2026), SPC asked the Ministry of Finance to cover its deficit, though the Ministry said it could not. Minister al-Bashir’s ask then seemed blunt: let SPC keep four or five months of those transfers, equivalent to “a billion dollars”, and it would build reserves, tanks and supply lines. The alternative he described is stark, which some might see as a provocation: either live with fuel crises, or stop buying gas and return to 2–3 hours of power a day, as under the old regime. With industrial and commercial users taking about 40% of power, cutting supply would shut down reopened factories. For scale, the monthly transfer to the treasury is almost a third of the USD 831 million Syria spends each month on crude and products.

Beyond the lack of fuel and money, spare parts are another obstacle, and so are long delivery times. This is especially critical as most substations must be made to order, taking 18 months to two years. Alternative solutions have been utilized, but they are by default limited: Deir Ezzor, which had a single substation at al-Taim, received an unused one moved from elsewhere in Syria. The same lead times explain delays on large solar projects: nine sites have been handed to companies, but they need substations and imported equipment. Gas turbines from Siemens, Ansaldo, GE and Mitsubishi are booked until 2033–35; only UCC’s pre-purchased turbines let Syria expect new plants by 2029.

Following oil and gas resources, electricity data was also plentiful, albeit more sobering. Syria has 460 transmission lines at 400, 230 and 66 kV; 29% of high-voltage lines are out of service, as is 29% of distribution network length in war-damaged areas. Of 458 transformer substations, 17% are out of service. Of 12 generation plants, about 37% of capacity is unavailable: Zayzoun and Mhardeh are wholly out, and Aleppo lost all five units, two of which have since been rehabilitated. Even so, generation has risen from 915 MW at liberation, when homes got 1–2 hours a day in winter, to 3,500 MW including hydro, giving 18–20 hours in most governorates and round-the-clock supply to industrial cities. That gain, however, rests on purchased gas the treasury says it can no longer fund.

On renewables, the Minister revealed that about 4,000 MW of renewables have been signed, 2,500 MW solar and 1,500 MW wind, including Wadi al-Rabi’ in Rif Dimashq (200 MW), Furqlus (200 MW), al-Taim in Deir Ezzor (300 MW) and Aleppo (300 MW), with land already handed over (S2 7:02). Set against the roughly 8,000 MW of fossil capacity envisaged for 2030 (S2 7:25), that is about a third of installed capacity, and a smaller share of actual generation. That is close to the 20–30% ceiling the Minister set himself for grid stability, citing last year’s Iberian blackout.

The Minister also provided an overview and various figures on water, thanks to questions by the very active Mahmoud Saleh al-Owais. Inflow from Türkiye rose from about 200–220 m³/s to about 1,000 m³/s, double Syria’s 500 m³/s share under the 1987 agreement, as one MP noted. The Euphrates riverbed was designed for 3,000 m³/s, but encroachments by farming and building mean even 2,000 would cause problems, and the protection zone set in the water law has been widely violated. The Minister also hinted to coordination struggles between Damascus and Ankara, saying that Türkiye gave just one day’s warning before raising releases and that, as a result, too little water became too much water, with no coordination framework to manage either.

As always with such disclosures, however, many additional questions remained unanswered, while others naturally came as interrogations of the disclosure. The most important question is why the SPC remits money to the treasury, yet loses money on every liter of mazout it sells and is owed USD 1.65 billion by the Syrian Electricity Company (SEC), which it supplies with gas at USD 9/MMBtu while paying USD 22.

Finally, the Minister was mostly candid, sometimes strikingly so, on empty warehouses, unpaid tankers waiting at sea and the Central Bank’s FX priorities. But he was also defensive, at times ironic. That edge sharpens considerably in the open-floor exchanges covered in Part 2.

How to read Part 1

Part 1 covers the Energy Committee’s prepared questions and Minister Mohammad al-Bashir’s presentation, which ran through Session 1 and the first 39 minutes of Session 2. Questions are grouped by theme, and each keeps its original number and the name of the MP who asked it.

• Sessions and timestamps: S1 is Session 1 (morning) and S2 is Session 2 (afternoon). Each timestamp marks where the point begins in that session’s recording. The committee asked all questions in S1.

• The minister’s answers appear in quote blocks headed “Minister al-Bashir”: He answered through a presentation rather than question by question, so his remarks match the questions they address.

• Sources: Each claim ends with its source in brackets: session and timestamp. When consecutive claims come from the same passage, a single timestamp follows the last one.

• Paraphrase and quotation: Questions and answers are condensed and paraphrased for clarity and length. Only passages in quotation marks are verbatim.

• Editorial clarifications: Where the audio was unclear, or a speaker appears to have misspoken, the likely intended meaning is given in square brackets. These are the author’s interpretations, not the speaker’s words, and readers are encouraged to check them against the recording.

• Unanswered questions. Questions the presentation did not address are listed at the end.

Share

1. Oil and gas: production, fields and data

Q1.1 and Q1.2 — Abdullah Majeed al-Hajj Abd (S1 2:34, 2:56): Transparent figures on domestic production: number of wells, number of fields, barrels produced per day, and daily consumption of oil, gas, and electricity. Why do official statements keep contradicting each other?

Minister al-Bashir

At liberation, the state held 14 fields west of the Euphrates, about 140 producing wells and 7,000 barrels of oil per day (bpd) (without accounting production in the Northeast), plus about 6 million cubic meters per day (mcm/d) of gas from central-region fields and al-Taim (S1 51:18). In the northeast, the state only really entered the fields around the end of Q1 this year (S1 50:06). It began receiving ready oil fields on January 17, 2026, took over major fields in Raqqa and Deir Ezzor on 18–19 January, and entered Hasakah in March 2026 after the settlement east of the Euphrates (S1 52:40). Oil output then rose briefly to 135,000–140,000 bpd and has settled around 110,000 (107,000–112,000), depending on wells and transport (S1 57:03–58:26). Gas rose to 8.1 mcm/d after part of the Conoco plant came online, reached 8.4–8.5 mcm/d the day before, and had touched 9 (S1 57:03–58:26). Drilling was reactivated: 4,840 meters drilled, two rigs returned to service, 21 wells repaired, 152 wells brought online and 10 new wells drilled (S1 57:03–58:26).

In total, Syria has 78 oil fields and 28 gas fields, with reserves of 2.5 billion barrels of crude and 241 of gas [unit unclear, billion m³?], based on old surveys. A geology committee was formed to commission a new oil and gas survey, a geothermal map and an updated groundwater map; many offers came in, but some raised “security sensitivities” (S1 50:31).

On the “contradictions”, people confuse natural gas for power plants with household LPG. LPG demand is 1,300–1,500 tons/day, domestic output is about 100 tons, and the rest is imported (S1 51:43).

The reduction [from 140,000 bpd to around 100,000 bpd today] came following 70 wells shutting in one area and 172 in another because of heavy water cut, radioactive material, and formation water reaching a stream locals call the “river of death” (S1 53:52). Local notables in the Jarzi Region (منطقة الجرذي) told about 100 cancer cases linked to pollution, burners and bad extraction; the wells are shut for repair and reassessment (S1 53:52). The main challenges are sustaining output and securing crude, chemicals and spares; at liberation all warehouses were empty, with no transformers, valves or pipe (S1 54:35).

Daily consumption is about 10,000–11,000 tonnes of mazout (about 12 million litres) and about 8 million litres of gasoline [spoken as “6–7 million tonnes” but likely meaning 6,000–7,000 tons]. Power plants and industry use about 8,500 [ton/day] of fuel oil, subsidised at USD 400 per ton against import costs of USD 550–570, and LPG demand is 1,300 tons/day. The rest is imported: crude when Baniyas is running, products while it is down (S1 1:12:49–1:14:11).

2. Demand, refining and the road to self-sufficiency

Q3.2 — Omar Fawaz al-Mohammad (S1 9:50). How many years until self-sufficiency in oil, gas and electricity, and the start of exports? Outline the ministry’s plan.

Minister al-Bashir

Syria needs about 300,000 bpd of crude equivalent; when the ministry was founded, need was 150,000 bpd and the two refineries covered it (S1 58:34). Need doubled for three reasons: Hasakah, Deir Ezzor, Raqqa and parts of Aleppo now take products from the ministry; the burners (harraqat/حراقات) that supplied 5–10% of the market were stopped; and demand grew, with Aleppo’s industrial city going from 900 to 1,500 factories and vehicles from 2.5 million (2025) to 3.6 million (S1 59:31). Demand ranges from 270,000–280,000 bpd in spring to 325,000–350,000 bpd in winter (S1 1:00:27).

Refining capacity is about 150,000 bpd in total: Baniyas 90,000–100,000 bpd before the overhaul and Homs 40,000–50,000 bpd. The remaining ~150,000 bpd is imported as diesel and gasoline. With local output of 112,000 bpd at the time of the report, the crude gap is about 200,000 bpd (S1 1:00:52).

Of roughly 100,000–110,000 bpd produced, about 80,000 is heavy crude that Baniyas, designed for light crude, cannot process (S1 1:02:08). About 20,000–25,000 of light crude goes to Baniyas, topped up with about 100,000 bought (130,000 at full capacity); Homs takes about 50,000 of heavy; and the ~30,000 bpd surplus heavy was stored and exported by the shipload (S1 1:02:08). Exports have now stopped: the surplus will go to local “electric” refineries (burner-type units) to make diesel, which are uneconomic and environmentally harmful, which is why such refineries were not in use until now (S1 1:03:06).

The target is oil self-sufficiency by 2028, if nothing unexpected happens, and half of gas needs by end-2030; offshore gas takes about seven years from signing the contract to production (S1 1:33:48). Gas turbines from Siemens, Ansaldo, GE and Mitsubishi are booked until 2033–35, but through the UCC partnership turbines will arrive in 2029, because UCC pre-purchased them (S1 1:34:31).

Exploration blocks are promising: firms that declared force majeure in 2012 are returning, such as Gulfsands, while some have withdrawn (S1 1:35:52).

Q2.1 — Laith Waheed al-Balous (S1 7:14). Could the Baniyas refinery overhaul have been postponed to avoid the price and market impact? What were the real reasons for the delay? Give technical information on the facility. Will the works guarantee a return to full capacity of 135,000 bpd, with stable output?

Minister al-Bashir

Baniyas has a design capacity of about 130,000 bpd and Homs 110,000 (S1 1:08:21). Homs currently produces 30,000–40,000 bpd, rising to 50,000 bpd by month-end, and its reformer unit has problems. SPC wanted to close Homs as uneconomic, but the Minister kept it as an energy-security asset able to refine heavy crude until a new refinery is built (S1 1:08:21).

Baniyas’s turnaround had been postponed for years, with repeated shutdowns during the revolution, sanctions, and a lack of spares. Technicians called it “a ticking time bomb” and asked him to sign that he took responsibility for worker and plant safety. The decision to stop was “100% technical”: much equipment is past its design life, and the overhaul will lift output from 90,000 to about 130,000 (S1 1:09:07).

Contracts were signed, and the work should have started in early summer, when turnarounds are done (before winter when demand increases) (S1 1:10:36). It was delayed repeatedly because of Hormuz, the Russia–Ukraine war, and supply chains, until it reached a critical point (S1 1:10:36).

Q6.2 — Mohammad Saeed AbdulQader al-Hasso (S1 15:20). Why not small and medium refineries near the fields, supplying the same governorates, to save transport costs, employ locals and reduce reliance on Baniyas and Homs?

Minister al-Bashir

On Friday, a team abroad was offered a ready-built refinery of 30,000–50,000 bpd, installable in months; it will go to Deir Ezzor (S1 1:35:02). A new refinery for Homs will be built at Furqlus, and a site is being sought in Aleppo. The plan is four or five refineries of about 50,000 bpd each, plus Baniyas (S1 1:35:02).

Transport and storage are being rehabilitated (S1 1:36:21). Bringing the private sector into distribution and storage is “very sensitive” in both electricity and petroleum; it is being studied, and the ministry welcomes consultancy input (S1 1:36:21).

Q3.3 — Omar Fawaz al-Mohammad (S1 10:14). Crude is trucked from the far east to the Homs and Baniyas refineries, and products trucked back east. This adds transport costs, damages roads, and creates traffic hazards. Why not fast-track a refinery in the east?

Q8.4 — Omar Issa al-Hayes (S1 20:44). Why the delay in rehabilitating the Rmeilan–Homs refinery oil line? Is there a maintenance plan, what progress has been made, and are alternative internal lines proposed?

Minister al-Bashir

The Baniyas and Homs refineries were rehabilitated several times, the main pumping groups in Homs were restarted, and many pipes were replaced; details will be sent. Trucking crude is “unhealthy”: it brings theft, oil swapped for water, congestion and road damage (S1 1:19:21–1:20:57).

More than 1,400 illegal taps on the heavy-crude line were removed, and the line is 80% rehabilitated. The end-of-September target slipped by 10–15 days after a minefield was found; demining teams from Defense or the Emergency ministry are needed (S1 1:19:21–1:20:57). Some points were missed and will be answered in writing (S1 1:37:10).

(On the eastern refinery raised in Q3.3, see also the answer to Q6.2 above.)

Subscribe now

3. Fuel pricing and diesel grades

Q1.3 — Abdullah Majeed al-Hajj Abd (S1 3:10). What is the actual cost of a liter of gasoline, a liter of diesel, and a gas cylinder?

Q1.7 — Abdullah Majeed al-Hajj Abd (S1 4:34). What formula and criteria does the pricing committee use?

Q8.3 — Omar Issa al-Hayes (S1 20:37). How far does the exchange rate enter the pricing formula, and how is it calculated?

Minister al-Bashir

The price is built from the exchange price on market platforms, an import premium, the product price, customs, profit margins, transport, storage, administrative costs, a renewable-energy fee, and a vehicle-registration fee. “The profit margins are now loss margins” (S1 1:31:43).

For diesel, the last cargo cost was USD 1,570 per ton (now USD 1,590); adding USD 250 in fees gives USD 1,840 per ton. At 1,200 liters per tonne, that is USD 1.53 a liter, or 206 SYP at about 135 SYP per USD. With a selling price of 175, SPC loses SYP 31 per liter (S1 1:31:39).

Q2.3 — Laith Waheed al-Balous (S1 8:10). Details of the fuel pricing committee: composition, mechanism, meeting frequency, how decisions are taken, how costs are calculated.

Minister al-Bashir

A decision formed the pricing committee from the Ministry of Economy, the Central Bank, the Ministry of Finance, [geology?], the Energy Services Administration, and SPC. It proposes pricing policy; details will be provided (S1 1:31:22).

Q1.6 — Abdullah Majeed al-Hajj Abd (S1 4:05). Three diesel grades invite adulteration and corruption: stations can mix the poor grade into the standard one.

Q6.1 — Mohammad Saeed AbdulQader al-Hasso (S1 15:00). Provide data, statistics, and success metrics for the experiment of selling several diesel grades: economic feasibility, fairness of distribution, whether it reaches those entitled.

Minister al-Bashir

Some MPs asked why they didn’t introduce multiple grades from the start. The risk is adulteration: during a four-day gasoline crisis, 172 violations were recorded at stations, and three grades make monitoring much harder. Several countries and companies sought the cheaper 150-SYP grade; when prices rose, no one agreed to export it, and it was secured only afterward. Offering only the improved grade, priced at SYP 115, would have concentrated pressure on it. The price rise is “still a subsidized increase” (S1 1:03:22–1:04:34).

4. Procurement, contracting and partners

Q1.4 — Abdullah Majeed al-Hajj Abd (S1 3:12). Disclose the purchase contracts for oil products. Are they tendered? Governed by competition or monopoly? “We now have a phobia of the Qaterji and Hamsho phenomenon.” Is it recurring?

Minister al-Bashir

The crisis is now a refining crisis as well as a supply one: Russian refineries were struck, and refineries in Kuwait and the Gulf were affected. Brent was USD 103 that morning while diesel stood at USD 1,570 per ton; at that Brent level, diesel would normally be USD 1,050–1,150 per ton (S1 1:10:59–1:12:49).

“Where are the tenders?” someone asked. We are buying diesel at auctions at sea. A Moscow refinery was hit that day, and Cuba (9 million people) went dark the day before. Syria is somewhat cushioned by local output, its sea access, and friendly countries prioritizing it (S1 1:10:59–1:12:49).

Q3.1 — Omar Fawaz al-Mohammad (S1 9:18). SPC’s contracts with local service companies for maintaining wells, lines, and sites: what is the contracting mechanism and legal basis? Is it true they were awarded by direct/negotiated contract (التراضي), which violates Contracts Law No. 51 of 2004?

Minister al-Bashir

Tendering for ten transformers would leave a neighborhood without power for two months, and an external tender alone takes 50 days; so sometimes a justification memo is used to contract directly. For example, contaminated formation water was heading for the Euphrates, flagged by Deir Ezzor governors and in UN photographs, and a company was contracted directly (التراضي) to build tanks and reinject it (S1 55:21–56:14).

Other challenges include decades-old vehicles (the newest in the former electricity ministry dates from 2005), no data or databases, hard financial procedures, and FX allocation from the Central Bank. Moreover, building stocks needs money, FX, and tanks (See Q4.2) (S1 56:14).

Q5.3 — Khaled Jamal al-Khalaf (S1 14:20). Several companies entered joint investments in oil fields, such as HKN, Novaterra, and ConocoPhillips. What are their completion rates and partnership terms? Provide field names and contracts.

Q7.3 — AbdulKarim Saleh Ukaidi (S1 18:15). Why are energy investments confined to the state or kept secret? “We are surprised by a contract here and an MoU there with various parties.” Would offering them to others give better results?

Minister al-Bashir

Several MoUs for offshore oil and gas exploration have been signed with major companies. Tenders are the main method, but some contracts follow the state’s “political orientation”: Chevron, Eni and ConocoPhillips carry weight, and an Arab energy Minister told him that Chevron and Conoco “will open the doors to all companies”. Contracts must be fair, not exploitative, and the ConocoPhillips MoU is being converted into a contract amid intense negotiations on shares (S1 1:26:56–1:29:34).

Direct contracting (التراضي) is used when products are scarce: if a company offers a product below market, there’s no need to leave people without fuel to run a tender. At first, all crude purchases were tendered; now companies submit price offers, a method the Contracts Law allows, with direct contracting kept for exceptional cases such as government companies (S1 1:26:56–1:29:34).

Partners include ConocoPhillips, Chevron, TotalEnergies, and QatarEnergy, as well as regional firms: ADES [Holding], Kuwait Drilling, and UCC (S1 1:29:10).

5. Supply security: FX, storage, stations and regional pipelines

Q4.2 — Mahid SeifEddin Issa (S1 12:10). Energy security: what strategic and emergency plans exist for a sudden supply shortage or production stop? How large is the current strategic stock of products, and how long would it cover the country?

Minister al-Bashir

SPC buys crude and products in dollars but sells in lira, which it deposits at the Central Bank; the Bank’s FX priorities are health, education, defense and interior, so SPC is served late. During the gasoline queues, three gasoline tankers sat at sea, ready to discharge but unpaid (S1 1:14:11–1:16:20).

The norm should be government-to-government supply contracts with Saudi Arabia, Kuwait, Libya, and other producers, for example, 200,000 bpd of crude, or 100,000 bpd of light crude plus diesel and gasoline. Sanctions effects linger, though SWIFT access has been regained. Syria needs USD 831 million a month to buy crude and products (S1 1:14:11–1:16:20).

Homs holds about 102,000 m³ of diesel in tanks in poor condition. A delegation went to South Korea to inspect ready-made tanks, since building new ones takes 1–1.5 years, and reported that they can be bought directly; underground tanks also exist in Deir Ezzor. Effective storage is 312,000 m³ of diesel and 188,000 m³ of gasoline (S1 1:21:44–1:24:44).

Depots at Adra and in rural Aleppo (Khan Touman, Khan al-Asal, Ramousseh) are dilapidated, and Kafr Battikh in Idlib is destroyed (S1 1:21:44–1:24:44). Investment budgets can’t cover everything, because the Ministry of Finance demands SPC’s revenue immediately: USD 250 million a month since the oil came under state control, which helped fund wage rises. “If they left us four or five months, a billion dollars, we’d build reserves, tanks and supply lines” (S1 1:23:09).

Q2.4 & Q2.5 — Laith Waheed al-Balous (S1 8:28). Is there a plan for real-time digital tracking of gasoline and diesel supplied to and sold at stations, to reduce queues and control the market when prices change? What criteria govern allocations to stations? Are some stations favored, for example, Tayba company stations?

Minister al-Bashir

A Petroleum Sector Regulation Department and a services regulation department were created, and new licensing criteria for fuel stations cover safety and service quality. A committee is drafting criteria for EV charging stations, though electricity itself is insufficient (S1 1:16:20–1:17:27).

The Minister gave no direct answer on Tayba stations.

Q4.3 & Q4.4 — Mahid SeifEddin Issa (S1 12:33). How can Syria maximize the benefit from Iraqi oil crossing its territory: transit, refining, storage, export via Syrian ports? Are there actual talks with Iraq? Kirkuk–Baniyas pipeline: is there a rehabilitation plan and a technical-economic study (works needed, duration, operating capacity, revenues for Syria)? He asks for answers with numbers and timelines.

Minister al-Bashir

A section of the Arab Gas Pipeline between Homs and Aleppo is missing; price offers were requested, and completion, costing about USD 250 million from SPC’s own budget, is under way (S1 1:17:27).

Kirkuk–Baniyas is old, low-capacity and idle since the Iraq war; a technical study says it needs full replacement. A company consortium signed an MoU with Iraq, and Syria signed one with the consortium. Iraq is first, since Syria is only a transit country, and Iraq’s prime Minister recently urged the companies to speed up (S1 1:18:07).

Syria will be a party to the contracts. No tender is needed because the same consortium builds from Kirkuk to Baniyas. Syria will earn transit fees and may seek priority to buy oil from the line, local labor, and stations (S1 1:18:07).

Leave a comment

6. Governance: the ministry and SPC

Q5.1 — Khaled Jamal al-Khalaf (S1 13:36). There is much talk of SPC covering up corruption, extravagance and waste of public money. Provide a complete database on SPC: founding, structure, rights and powers. He requests a live hearing with SPC’s head before the Energy Committee.

Minister al-Bashir

The merger responded to bureaucracy and overlapping powers between oil, electricity and water; other countries merge these files, some with the economy ministry. Before the merger, investment attraction was weak and decisions poorly aligned (S1 43:31). The ministry was created under [Presidential] Decree No. 150 of 2025, and its institutions were restructured into holding economic entities (S1 44:44).

Three companies were created: the SPC [via Presidential Decree No. 189 of 2025], the SEC [via Presidential Decree No. 45 of 2026] and the SMC [via Presidential Decree No. 44 of 2026], all public holding companies and 100% state-owned. “Some thought we went towards privatizing the energy sector: no.” After years of stability and a capital valuation, some shares could be floated on local or international markets, as with Aramco’s roughly 4% float (S1 44:52).

A new General Establishment for Drinking Water and Sewerage in Damascus now oversees water companies in each governorate; previously, each governorate’s establishment reported directly to the Minister (S1 45:48). The subordinate bodies are the support directorates, the Renewable Energy Support Fund, the General Establishment of Geology, the General Authority for Water Resources (dams, irrigation canals, pumping stations), the General Establishment of the Euphrates Dam, and the water establishment (S1 46:29).

The three companies [SPC, SEC, SMC] are linked (مرتبطة), not subordinate (تابعة). They have their own administrative and financial systems, are not subject to the ministry’s law or the Basic Employees Law, and their boards were appointed by presidential decree (S1 46:58). The boards are drafting statutes and financial regulations, but none has yet been adopted. SPC’s statute is with the General Secretariat for a decree: it was returned with comments, amended, resubmitted, and is “under issuance”, with electricity and mining to follow (S1 47:31).

The ministry’s digital transformation covers an official website, an “Energy Portal”, automated transactions, linked entities and databases (S1 48:03).

7. Electricity: grid, generation, private sector and renewables

Q7.4 — AbdulKarim Saleh Ukaidi (S1 18:40). What is the status and completion rate of maintenance at thermal and hydro plants, and when will maximum capacity be reached?

Minister al-Bashir

Syria has 460 transmission lines at 400, 230 and 66 kV, and 29% of high-voltage lines are out of service, as is 29% of distribution network length in war-damaged villages and towns (S2 0:06). Of 458 transformer substations, 17% are out of service (S2 0:38). Of 12 generation plants, about 37% of capacity is unavailable: Zayzoun and Mhardeh are wholly out, and Aleppo lost all five units, two since rehabilitated (S2 0:46).

At liberation, generation was 915 MW, giving 1–2 hours of supply a day in winter and 4–5 in spring. It is now 3,500 MW including hydro, giving 18–20 hours in most governorates and 24-hour supply to industrial cities. “We multiplied generation three and a half times” (S2 1:18).

Spare parts are scarce, and most substations must be made to order, taking 18 months to two years. Deir Ezzor, which had a single substation at al-Taim, got an unused substation moved from elsewhere in Syria. The same lead times explain delays on large solar projects: nine sites have been handed to companies, but they need substations and imported equipment (S2 2:34–4:12).

Rehabilitation raised Jandar from 200 to 850 MW, brought Deir Ali to 700 MW after maintenance of an idle unit, and returned one 100 MW unit at Mhardeh after about ten years offline (S2 3:55). Deir Ali will gain a new 750 MW unit (S2 4:12). A USD 98 million contract was signed for two 200 MW units at Tishreen thermal, the first due in Q1 next year and the second in Q2, giving 400 MW by mid-year (S2 4:20).

Rastan (526 MW) was started by the [Iranian] company MAPNA [Group], which stopped after the revolution’s victory; negotiations are under way to complete it (S2 4:43). Price offers for Aleppo’s three idle units went to a Turkish company for USD 115 million. A cheaper bid was rejected on technical grounds because it would lose about 10 MW per unit in efficiency, which the law allows [rejecting a cheaper bid contract]; the contract is expected by year-end (S2 4:58).

Demand will roughly double by 2030, and existing plants are old and inefficient, so the ministry signed a contract for four new combined-cycle gas plants. They are in Aleppo (al-Tarifawi), Zayzoun (replacing the destroyed plant), Hama (Mhardeh) and Deir Ezzor (al-Taim), a governorate with no plant of its own beyond a very small one at al-Suwaidiyah near Hasakah. Together they total 4,000 MW, three ready in 2029 and one in 2030 (S2 5:59).

Transmission towers are all imported (S2 9:08). When Idlib and rural Aleppo were fed from Türkiye, a storm felled four towers in Türkiye and the area went 18 days without power (S2 9:08). About 7–8% of transmission lines have been rehabilitated, including the Türkiye interconnector, which is in progress, and the Jordan interconnector, financed by the World Bank and under execution (S2 9:54). Completed works include 156 km of high-voltage lines (8 km at 400 kV, 16 km at 230 kV, 132 km at 66 kV), seven substations, and rehabilitation of the Aleppo 400 kV substation (S2 10:11).

Q7.1 — AbdulKarim Saleh Ukaidi (S1 16:39). Involve the national private sector in production, transport, and distribution, with incentives, with the state only regulating. Specifically, private alternative-energy generation: what incentives exist, and is the price the ministry pays solar producers adequate, especially in industrial zones?

Minister al-Bashir

The aim is eventually to bring private companies into distribution, but the legislative framework isn’t ready, and the electricity law is being amended. Private distributors would add a profit margin borne by the state or citizens, so this has been postponed until the transmission company recovers (S2 10:36).

A Saudi company was contracted for a national control center and SCADA system, costing about USD 60 million (S2 11:09). Losses are high because of old plants and substations, network losses, illegal connections and theft (S2 11:39). Distribution works have replaced 784km of medium- and low-voltage lines and equipped or replaced 861 transformer centers (S2 11:59).

Q9.3 — Khaled Arafat Aarabi (S1 22:53). Brief Parliament on studies and plans for new dams, and for exploiting rivers and wind as alternatives to fossil fuels.

Q10.12 — Mahmoud Saleh al-Owais (S1 36:26). Hybrid and electric energy: the world is moving away from oil; over 30% of Jordan’s vehicles are electric [as stated]. What steps will the ministry take on infrastructure, draft laws, coordination with other ministries, public awareness, and customs cuts?

Minister al-Bashir

About 4,000 MW of renewables have been signed: 2,500 MW solar and 1,500 MW wind. Examples include Wadi al-Rabi’ in Rif Dimashq (200 MW), Furqlus (200 MW), al-Taim in Deir Ezzor (300 MW) and Aleppo (300 MW), with land already handed over (S2 7:02).

A private firm was contracted to study Syria’s energy mix across wind, geothermal, solar and fossil sources. Its draft result is 2,500 MW of solar and 1,500 MW of wind, plus about 8,000 MW of fossil generation by 2030, including UCC’s plants (S2 7:25).

Renewables are part of the solution but should not exceed 20–30% of generation for grid stability. He cites last year’s Spain–Portugal blackout as the risk of exceeding that share (S2 7:48).

8. Gas costs, the electricity tariff, smart meters and the budget

Q7.6 — AbdulKarim Saleh Ukaidi (S1 19:05). How will higher fuel and gas costs affect future electricity prices?

Q9.1 — Khaled Arafat Aarabi (S1 21:46). Gas arriving via Türkiye (he calls it “European gas”): stations are out of service, reception is irregular, metering is lacking. What has been done?

Minister al-Bashir

Syria needs 24 mcm/d of gas, produces about 8.5 and buys about 6.3: 5.3 from Azerbaijan via Türkiye, and 1 mcm via a Floating Storage Regasification Unit (FSRU) at Aqaba, piped through the Arab Gas Pipeline to Deir Ali. This costs about USD 140 million a month. About half (3.2 mcm) was a Qatari grant that ended in August, so the country now buys all gas. The Ministry of Finance has not budgeted the full gas bill, so purchases may be cut by 2–3 mcm/d, reducing supply hours (S1 1:04:34–1:08:12).

SPC had been transferring about USD 250 million a month to the treasury; last month it asked the Ministry of Finance to cover its deficit, but the Ministry said it could not. The options are to live with fuel crises, or to stop buying gas and return to 2–3 hours of power as under the old regime, when 6 mcm produced about 950 MW and 1–2 hours in winter (S1 1:06:24). Industrial and commercial users take about 40% of power, so cutting supply would close reopened factories and reverse growth (S1 1:07:50).

Under the old system, 6 mcm/d of domestic gas generated about 950 MW with no purchases; when industrial cities and tourism and commercial users demanded power, the ministry started buying gas at about USD 140 million a month (S2 13:18). SPC buys the gas and supplies the SEC, which should generate, collect and pay SPC (S2 14:09). SPC’s receivable from SEC stood at USD 1.65 billion “as of yesterday”, because collections fall short through plant and network losses, theft and the high cost of gas (S2 14:09).

The tariff aims to sustain gas purchases with a financial return and to reduce load (S2 15:06). When the Qatari grant came, supply rose from 2 to about 8 hours, and longer continuous supply overloaded transformers and lines, which had “no time to cool”, so explosions multiplied. The tariff was also a technical measure to curb consumption (S2 15:06).

Q7.7 — AbdulKarim Saleh Ukaidi (S1 19:13). Subsidize the first electricity block above 300 kWh (per billing cycle), or halve it, or create a middle block, giving three tiers (low-income, middle, others).

Minister al-Bashir

The tariff emerged from dozens of workshops and three meetings with governors, with options narrowing from four tiers to three, then two. The first block is 300 kWh per two-month cycle, or 150 kWh a month, priced at 4.5 US cents/kWh, for a bill of about USD 6.5 a month. Engineers measured that 150 kWh covers lighting, a fridge and a washing machine for a limited-income family, though not heating (S2 16:24). Heating and water heating fall in the second block; a third subsidized block would mean going back to three or four hours of supply (S2 17:51).

An MP visited and told him, “you got Damascus to 20 hours, but it’s expensive”; he replied that price is what got it there. The easy option was to burn only domestic gas for two hours of power a day, as before, when, the MP said, people “used blankets” (S2 18:07).

The second block costs 11 cents, compared with SEC’s 18 cents. SPC transfers gas to SEC at USD 9/MMBtu while buying it at USD 22/MMBtu today (S2 18:58). Syria will therefore cut gas purchases by 2 mcm/d, reducing service, because SEC’s deficit to SPC is USD 1.65 billion (S2 19:41).

In the first billing cycle after the rise, collection reached 72% in Damascus and 76% in Aleppo, with Tartous similar and some governorates much lower; the cycle stays open until year-end (S2 19:47). Good collection means more gas and better service (S2 19:47).

At today’s prices, even industrial and commercial power is subsidized, though both were at break-even when set. Subsidy rates are 75% on the first block, 42% on the second, 30% on “golden lines” exempt from rationing, and 26% on industrial and high-voltage users such as smelters, so overall electricity subsidy runs from 26% to 75% (S2 21:02).

The goals are to rehabilitate lines and substations, raise generation, add renewables, and continue tariff reform. The tariff might suit SEC once self-sufficiency is reached, but with purchased gas at world prices it is “very burdensome”, and cutting gas purchases is “the only solution” for now (S2 21:52). Some want 4–6 hours of power, but reopened factories can’t be told there is no power: “no going back”. He has asked the Ministry of Finance for more FX for gas and fuel oil (S2 22:25).

Q7.5 — AbdulKarim Saleh Ukaidi (S1 18:47). What is the plan and timeline for smart electricity and water meters?

Minister al-Bashir

A contract was signed with a Saudi meter company; supply has started, and pilot meters are installed. This year, 300,000 meters will go into Damascus and Idlib, with all governorates from early next year, plus a control center. The meters will run on cards, Wi-Fi or telecom networks, easing top-up and billing and cutting losses (S2 12:15–13:10).

Separately, bids for smart water and electricity meters were awarded to a Chinese company; delegations went to China twice, and the contract, for about 6 million smart meters of each type, is in its final stages (S2 28:18).

Q8.1 — Omar Issa al-Hayes (S1 20:10). Detailed 2026 budget for the Ministry of Energy: revenues, expenditure and deficits since its adoption after the one-twelfth provisional budgets.

Minister al-Bashir

Detailed budgets for all companies, covering investment, current spending, surplus, income and losses, will be provided. “Electricity has declared a loss of USD 1.65 billion to date; on August 1 it was USD 1.3 billion” (S2 23:30).

In mining, the vision is to move into processing industries such as phosphate and silica rather than exporting raw ore. Geological activity so far: 1,302 field trips, 2,700 tests, 1,400 licenses, 93 industrial licenses and 190 investment contracts (S2 24:20).

9. Water, dams and irrigation

Q1.8 — Abdullah Majeed al-Hajj Abd (S1 4:49). Euphrates Dam: only four of eight turbines work; the other four are out of service.

Q10.9 — Mahmoud Saleh al-Owais (S1 31:09). Halabiyeh–Zalabiyeh dam on the Euphrates: power, water and agriculture. These projects could go to investment or into the budget.

Minister al-Bashir

Syria has 164 dams with a total capacity of 19.03 billion m³, the largest being the Euphrates and Tishreen dams, plus other dams providing irrigation for about 18 [thousand?] km of irrigation networks and 285 pumping stations (S2 29:33).

The Euphrates Dam has eight units, four of which are out of service. Technical studies for two are ready and included in the Euphrates Dam establishment’s investment plan; if the 2027 budget is approved, rehabilitation of those two will begin. Tishreen Dam has six units: one was out and has returned, with some technical problems (S2 30:30).

A fourth Euphrates dam, Halabiyeh–Zalabiyeh, is under study and will be offered for investment. It is a regulating rather than storage dam, generating about 75 MW from three units and supporting irrigation and land reclamation (S2 30:06). It would irrigate 30,000 ha, produce 78 MW and benefit about 87,000 families (”about 60,000 people” [as spoken]) (S2 34:47).

Q10.1, Q10.3 & Q10.4 — Mahmoud Saleh al-Owais (S1 25:03). Syria wastes about 90% of its water potential; 60–70% of arable land is not farmed. Syria’s Euphrates share is 500 m³/s under the 1987 agreement, but only about 200 m³/s arrived in recent years. After four years of drought, last winter’s rains turned the river into a burden.

Last winter’s flood crisis was managed only with warnings and media statements, with no prior plan. The Euphrates now carries 1,200 m³/s in summer; in winter it could reach 2,000–2,500, risking dam failure and floods in Raqqa and Deir Ezzor, destroying crops, homes, and bridges. Flash floods in the Badia also destroyed bridges. What measures (not plans) has the ministry taken?

What coordination or agreement exists with Türkiye on flows? Last year’s releases were unilateral, hence the surprise.

Minister al-Bashir

Inflow from Türkiye rose from about 200–220 m³/s to about 1,000 m³/s (S2 31:16). The riverbed was designed for 3,000 m³/s, but encroachments by farming and building mean even 2,000 would cause problems; the water law defines a 3,000 m³/s protection zone that people have violated (S2 31:16).

Last time, dams were refilled after severe depletion that had stopped some plants; once refilled, Türkiye gave one day’s warning that it would increase releases. Releases had to rise, and in Raqqa the al-Rashid bridge would have been lost. Earthen causeway bridges worsened the crisis by holding water back; with the al-Siyasi, al-Rashid, and al-Mayadin bridges restored, the problem should ease (S2 32:21).

Q10.5 — Mahmoud Saleh al-Owais (S1 28:39). Have irrigation and land-reclamation canals been dredged, and how many km? Have the Badia dams been repaired?

Minister al-Bashir

Since the start of the year, 1,974 km of irrigation canals have been dredged round the clock, after the old regime left them uncleaned for 15 years; this absorbed heavy rains without floods (S2 33:21). The al-Sayha dam between Aleppo and Idlib was a collection dam built by locals, not the water authority, but the ministry took responsibility and is working with the Emergency Ministry on the damage (S2 33:51).

Water points and drinking-water samples are being monitored. Four dams are being completed, and two or three more are in the 2027 plan (S2 34:22).

Q10.7 & Q10.8 — Mahmoud Saleh al-Owais (S1 29:40). Strategic projects: artificial reservoirs, smart canals, and modern irrigation (as in Saudi Arabia, Türkiye, India) could cover over 1 million ha. The “Euphrates Renaissance” idea to revive the Khabour: a 30-year tragedy, whole villages emptied by drought. What is the plan?

The 2006 Tigris diversion project: the Tigris runs about 50 km inside Syria and goes unused, despite having a higher flow than the Euphrates. It could irrigate all of Hasakah and revive the Khabour.

Minister al-Bashir

Under international law, Syria has an unused share of the Tigris. The Tigris–Khabour diversion would irrigate about 215,000 ha, 150,000 of them new and 65,000 formerly irrigated from the Khabour, at a cost of USD 2 billion. It is branded the “Green Renaissance” for Hasakah and Deir Ezzor (S2 34:55).

Q10.10 — Mahmoud Saleh al-Owais (S1 31:44). Sewage flows into rivers and lakes, especially in the east, where river water is undrinkable. Treatment plants would yield methane, fertilizer, and about 700 million m³ of reusable water from three plants, for fodder and afforestation. (He mentions an Agriculture Ministry deal with a Saudi company (”3,000 or 300,000 ha, I don’t remember”)).

Minister al-Bashir

Syria has 5,700 water sources, about 65,000 km of networks and 123 wastewater treatment plants, yet most sewage goes untreated into rivers, lakes and the sea. Treatment plants are a priority for agricultural water and pollution control (S2 24:57). In the investment budget, he has requested at least five wastewater treatment plants per governorate, since sewage flows into the sea in Latakia and Tartous, the Euphrates in Deir Ezzor, and the Orontes in Idlib and Hama; he asks MPs to prioritize them when voting on the budget (S1 1:23:53).

The Adra plant is being rehabilitated. Aleppo’s Ramousseh plant costs USD 400 million and is being marketed to the World Bank and others, or may be financed by a loan, because the Ministry of Finance says it cannot allocate that sum (S2 25:46). Waste is huge: “a cubic meter of water costs 7 old lira, i.e. 0.007 SYP” under the tariff, so people waste it, with rooftop tanks overflowing and cars washed (S2 26:02).

Works include maintaining 6,000 pumps and 1,462 generating sets; drilling 38 new wells; rehabilitating 1,051 wells, 110 elevated tanks, and 206 pumping and treatment stations; and installing 416 solar systems, 406 of them at water pumping stations. On networks, 10,000 rehabilitations or replacements, 11,000 repairs, and 126,000 violations were recorded, plus 92 lines exempted from rationing and 136 transformer centers for water stations (S2 27:10).

Service was restored to about 2.3 million people through the Wadi Marwan, al-Jarrouh, Alouk (Hasakah), and Maarat al-Numan projects, which had been idle for 12–13 years (S2 27:52). Sixteen wastewater plants were built, and more than 2,686 km of sewer lines were replaced. Partnerships include Ain al-Zarqa in Idlib, whose system serves 80% of the governorate, agreed with the World Bank and humanitarian partners; an upper Orontes project; and the Adra treatment plant, with about 2.2 million beneficiaries, in execution (S2 28:43).

Q10.11 — Mahmoud Saleh al-Owais (S1 33:13). Euphrates-to-Hisyah water project (phosphate plant, industrial city), announced on the 30th of last month: he supports it but questions it. It runs 410 km at an initial USD 571 million; he expects USD 1–1.5 billion, citing Jordan’s Aqaba–Amman carrier at over USD 3.5 billion. It needs protection and maintenance and takes water from Raqqa’s and Deir Ezzor’s share. Alternatives: desalination near Baniyas (110–120 km away, USD 500–600 million), a line from Lake Quttinah (80 km, under USD 100 million), or local wells (about 1,200 meters deep, about USD 2 million, lasting 10–15 years). He asks for a neutral committee to compare options before bids close on 30/9.

Minister al-Bashir

The USD 571–572 million cost of Euphrates–Hisyah is accurate for 3 m³/s; converting it to agriculture would need 12 m³/s and about USD 1.5 billion. It draws from Lake Assad, not from Deir Ezzor’s or Raqqa’s share: 3 m³/s against about 1,000 m³/s of flow. It mainly serves industry and drinking water, supplying Palmyra, a branch back to Deir Ezzor for livestock, and a branch to Hisyah for the industrial city, the phosphate mines, and the Furqlus refinery site. The ministry posts offers on its platforms, and companies are enquiring (S2 35:56).

The “national carrier” would capture freshwater along the coast, from the al-Sinn river, submarine springs, and groundwater, and pump it to the Qutayfah reservoirs, then by gravity to Damascus, Daraa, Suwayda, Quneitra, and Rif Dimashq. A study contract has been signed, but the project has not yet been studied, with an initial estimate of about USD 9 billion. It would reduce Ain al-Fijeh from 40 m³/s to about 1.5 m³/s. Some desalination may be included, but desalination costs about USD 0.50/m³, or 37 cents in the best case he has seen (S2 37:24).

Unanswered questions

Sixteen of the committee’s questions received no answer in the presentation. All were asked in Session 1.

Abdullah Majeed al-Hajj Abd

• Q1.5 (S1 3:46): What justified the sudden price rise, “as if it was planned overnight”? We woke up to prices up “insanely”.

• Q1.9 (S1 5:05): Maskanah East pumping station (Japanese-built): only two of six motors work. Its irrigation network (17,700 ha) is worn out, and nobody responds.

• Q1.10 (S1 5:39): Rusafa transformer station (his constituency) is down, idling about 110 wells (he first says 120); only 10 run on diesel. It also feeds al-Safih, al-Mamlaha and al-Wahhab. When will it be repaired?

Laith Waheed al-Balous

• Q2.2 (S1 7:45): Why not announce a public subsidy policy for fuel and electricity that targets the neediest, as a transitional measure until living standards improve?

Omar Fawaz al-Mohammad

• Q3.4 (S1 10:59): Request a circular obliging ministries to ration and cut back in civilian and military sectors, cancel open personal fuel cards, and apply strict monitoring.

Mahid SeifEddin Issa

• Q4.1 (S1 11:51): How long will the latest price increase last? Given the protests, will the ministry set clear criteria for any future increase or decrease?

Khaled Jamal al-Khalaf

• Q5.2 (S1 13:59): Is there a plan to install high-accuracy meters from the fields through to shipping, refineries, and ports, to reconcile figures and prevent manipulation?

• Q5.4 (S1 14:38): Are all oil and gas fields fully under Syrian government control?

Mohammad Saeed AbdulQader al-Hasso

• Q6.3 (S1 15:40): Create a stabilization fund that intervenes when prices exceed a threshold and brings them back down.

• Q6.4 (S1 15:56): What is the estimated percentage of energy waste, both governmental (motorcades, events, displays) and by citizens (unpaid bills, grid theft)?

AbdulKarim Saleh Ukaidi

• Q7.2 (S1 17:33): Public debate over contracts such as UrbaCon’s: what are the company’s obligations, and what is the legal basis? Provide Parliament with a full copy of that contract and others.

Omar Issa al-Hayes

• Q8.2 (S1 20:25): Is importing crude or products overland from the Gulf possible and economically feasible?

Khaled Arafat Aarabi

• Q9.2 (S1 22:24): The decision to close the oil secondary schools: postpone it two years so first- and second-year students can finish.

• Q9.4 (S1 23:23): Does the pricing committee distinguish between products by their impact on citizens? Diesel hits people in many ways; gasoline less so.

Mahmoud Saleh al-Owais

• Q10.2 (S1 26:26): Modern irrigation networks are lacking. Farming stops 2–5 km from rivers and lakes; beyond that, it is rain-fed. No state drip systems; much Badia land is unused.

• Q10.6 (S1 29:02): Proposal: a spillway into Badia depressions like Egypt’s Toshka, with at least three candidate storage areas.

Partly answered

• Q2.5 (S1 8:44), Laith Waheed al-Balous: the point on Tayba company stations got no direct answer (see section 5).

The Syria Dispatch is an independent publication covering Syria’s economy, politics, and society, founded and edited by Benjamin Fève.

Subscribe to receive future issues, research, and analysis directly.

Subscribe now

Comment. Questions, corrections, or disagreements with the analysis above are welcome! Please feel free to leave a comment or reach out directly.

Leave a comment

Looking for research, analysis, or advisory support on Syria? Benjamin Fève provides independent consulting on Syria’s political economy, reconstruction, and economic governance — including research design, briefings, interviews, and tailored analysis for organizations, investors, and policymakers. Get in touch to discuss a project.

Inquire

Dr. Rahaf Aldoughli is an award-winning academic, a lecturer at Lancaster University, and a senior editor at Cogent Social Sciences, published by Taylor & Francis. Her book Romanticizing Masculinity in Baathist Syria was published almost exactly as the regime it analyzed collapsed. It argued that masculinity in Syria was not a byproduct of authoritarian rule but one of its instruments: a configuration of manhood enforced from above and eventually internalized, which supplied the terms of loyalty, belonging, and national identity.

Since December 2024, she has continued interviewing fighters and commanders across Syria and the region, work that will feed a forthcoming book on fighters’ motivations before and after the fall of Assad, alongside a second forthcoming book, Who Owns Sunnism.

In this conversation with The Syria Dispatch, she discusses what she would revise eighteen months on, the competing forms of manhood she calls transitional masculinities, the shift from institutional repression to character assassination, the women contesting rules at the door rather than in public, and why she reads the new order as saturation without consolidation.

(Please note that Substack allows readers to listen to articles by clicking the “play” button in the top-right corner of the article.)

What the Fall of Assad Did Not Undo

The Syria Dispatch: Your book was published right as the regime fell, and you’ve said you couldn’t celebrate holding it in person. Looking back at the thesis now, with eighteen months of post-Assad material to test it against, is there anything in Romanticizing Masculinity in Baathist Syria you would revise, or has the transition mostly confirmed what you argued?

Rahaf Aldoughli: The central argument of the book was that masculinity in Baathist Syria was not a byproduct of authoritarian rule but one of its instruments. For more than five decades, a particular configuration of manhood was enforced from above and eventually internalized by loyalists. It was a state masculinity that supplied the terms of national identity, of belonging, and of loyalty; crucially, loyalty to Assad rather than to Syria. Manhood was the currency used to pay for political legitimacy.

That was the claim: masculinity as an authoritarian tool used to upgrade and sustain the regime’s authority, not merely masculinity as an outcome of authoritarianism.

What I would not revise is the claim that none of this ended with the regime. The book was entirely about the form of masculinity manufactured under Assad, not about the opposition masculinity that was also being generated over the long war since 2011. But the fall of one authority does not dissolve a fusion of gendered identity, survival, and authority built over fifty years. Removing the man who sat at the top of it does not remove a gendered identity that has been manifesting and being internalized.

Syrians are not now facing the residue of a regime. They are facing a whole political culture in which masculinity operated simultaneously as a source of legitimacy and as a strategy of survival. And it is that culture, more than any particular institution, that will hinder the prospects for civic building.

What I would extend is the assumption that this repertoire was Baathist in any deep sense. I treated it in the book as a specifically Baathist formation, tied to the party, the army, the cult of the leader. Eighteen months later, what strikes me is its portability. The fighters I have interviewed were not regime men. They were fighting the regime. And yet they articulated honor, moral injury, protection, and the obligation to die for the collective in an idiom the Baathist state had spent fifty years institutionalizing. The opposition inherited the political culture it was fighting.

So if I were writing the book now, I would frame it less as a Baathist pathology than as a technology of rule, a way of ruling.

The second extension is mechanism rather than scope. The book gives you masculinity as a structure: a configuration of practice, in Raewyn Connell’s sense, sustained institutionally and from above. What it underspecifies is how a norm becomes an obligation that a man experiences as his own. That requires attention to the affective and moral processes—humiliation, moral injury, shame, the desire for repair—through which a structural condition is converted into a felt duty. That is what I have been working on since, and it is what the book’s image of a reservoir was gesturing at without fully specifying.

The Syria Dispatch: Your mention of ‘portability’ echoes what I have heard about the many areas of continuity between the previous and current administrations. We usually expect revolutions to produce a total break with what came before. Yet in many areas we see continuities: the use of the penal code, the cybersecurity law, documented cases of torture under the new authority. Does the same hold for broader social and societal dynamics imposed and exploited by the state, such as masculinity?

Rahaf Aldoughli: Definitely. There has been a rupture in terms of political structure. The structure is completely different from the one Assad ruled through. But that does not mean we have a different political culture. The culture that cultivated this form of masculinity is still operating, only under different attire, under a different suit.

Share

Was the Baathist State Ever Secular?

The Syria Dispatch: In your book, you write that religious tradition “never appeared to be the main problem” (p.8) for women under Baathism, because the state was officially non-religious and restricted public religious expression. Under the new authorities, religion is actively promoted, from the Ministry of Endowments’ daʿwa campaigns to restrictions on gender-mixing and makeup. Has the main problem genuinely shifted from secular-nationalist militarism to religious authority, or is religion supplying new packaging for the same underlying masculinist logic?

Rahaf Aldoughli: I am always cautious when I get this question, because it can be answered in a way that flatters a secular-versus-religious framing that I do not think holds.

Two things need separating: whether Syrians are culturally religious, and whether the Assad state could tolerate free religious expression. The answer to the first has always been yes for the majority. The answer to the second is no.

Baathism was never indifferent to religion. It managed it. It co-opted particular currents, especially the Damascene Sufi traditionalist networks, of which Ahmad Kuftaro is the obvious case in the early 2000s. But after 2011, it did far more than manage it; it manufactured loyal Sunni constituencies to rally for its survival, producing a fissure between the loyal Sunni and the opponent who could be filed under takfiri or terrorist. It built an institutional architecture to make that permanent: Decree No. 16 of 2018 subjected every imam and religious teacher to state accountability, and the Mufti’s office was folded into the state apparatus, which converted political dissent into doctrinal defiance. Assad claimed, in his own words, to be correcting fourteen centuries of false interpretation of Islam.

That is not a secular state. That is a state asserting what I call doctrinal sovereignty: the claim that it decides what legitimate Sunni belief is.

It also left Personal Status Law—the single most consequential body of law for women’s lives—under religious jurisdiction, and essentially unreformed since 1953. Baathist secularism was public, and it was thin. Inside the family, it never arrived. So when I wrote that religious tradition was not the main problem for women under Baathism, I was writing about the axis of public conflict. I was not claiming that the legal order was secular.

The regime could not allow free religious expression because it always felt insecure as a state ruling a Sunni majority it could not credibly claim to speak for. That is precisely why it co-opted a particular Sufi Sunni current with no political ambition that could threaten Assad’s rule.

The Syria Dispatch: And what changed after the fall?

Rahaf Aldoughli: There was a euphoric feeling among the majority. Sunnis long attached to their religious practice, and to an activism against the regime that had been conducted in a religious idiom, felt they had finally been recognized. The new authority played a significant role in cultivating that feeling. We saw public displays of prayer on a scale Syria had never seen.

My reading is not that Syrians suddenly became more religious. In a survey of a thousand Sunni respondents living in regime-controlled areas, conducted between 2022 and 2024, before the regime fell, respondents did not express any substantive trust in the regime’s fatwa council, and nearly two-thirds preferred a plural religious authority to a single state-appointed one.

What has changed, in my opinion, is that religion has become available to the new authority as an instrument of recognition and legitimation. The packaging has changed, and the mechanism has changed. The logic has not. Both orders assert custody over the criteria of belonging. What differs is the idiom and the instrument.

The instrument is the interesting part. The Baathist project was legislated: decrees, curricula, codified doctrine. Which meant it could be contested, precisely because it had been articulated. The present configuration proceeds through circulars, governing directives, sermonic guidance, and daʿwa campaigns run by actors the state neither endorses nor suppresses. Under Assad, the state declared itself secular in explicit terms. Al-Sharaa has never said in an official statement that Syria is a Sunni state.

The new authority does not face the threat to its representation of the Sunni majority that the old one faced. Think of the early 1970s, when Hafez Assad needed Moussa Al-Sadr’s ruling that the Alawites belonged to Shiism and Shiism to Islam, so that he could be a legitimate ruler of Syria. The current authority has no equivalent problem.

But it remains chaotic. The state has not yet built its ideology, or its national narrative. That is still ambiguous, not transparent, not clear—perhaps because, given where the current authority comes from, it needs to show the West, the regional powers, and the public that it has divorced itself from its past. It may simply be too early to see what the new authority’s project is.

So, is religion playing a greater role than before? Yes, definitely. We see it in the Ministry of Endowments. Under Assad, the ministry was focused on producing a Sunni loyal to the state, to the Syria Assad was manufacturing, but it never intervened in the private sphere, in what people wear and do not wear. Now we see the ministry giving lectures on what a good or pious woman should wear.

I had a personal experience of this. When I visited the Ministry of Endowments, I was required to wear a hijab before meeting the minister. I was visiting a state institution, not a mosque, and my body was policed by that institution.

At the same time, I cannot say that this is only top-down. There is also a bottom-up dimension: Syrians wanting to express themselves as Sunnis who won the revolution. The two now work and interact together. So under Assad, certain forms of Sunnism were permitted in the public sphere. Under the current Ministry of Endowments, we see more pressure on what a good Sunni should be in the private sphere, which we didn’t see before.

Subscribe now

Transitional Masculinities

The Syria Dispatch: So would you say the key shift is not from a secular state to a religious one, but from one form of state-controlled authority to another, with religion providing a new language for the same underlying structures?

Rahaf Aldoughli: Definitely, yes. I have started calling what is emerging ‘transitional masculinities’, because I am seeing several forms at once, not only a state masculinity.

We see the polished, presentable image of a former Hayat Tahrir Al-Sham (HTS) commander who is now very well dressed, in an expensive suit, attentive to his appearance. His masculinity has shifted from the fighter who wanted to win the revolution to the state-builder. These are men who are welcomed not only by Western media but by Western policymakers and diplomats, and who make their own visits to Western capitals.

Then we see another form: fighters, revolutionary fighters, who fought against Assad and still do not feel they have been recognized. That relates directly to what has happened over the last eighteen months. Take the SDF integration agreement between Mazloum Abdi and Al-Sharaa. Tribal Arab fighters look at that elite bargaining at the top and see that their grievances have not been met. Their integration into the Ministry of Defense or the Ministry of Interior remains incomplete. Loyalty over competence remains in both ministries. Fighters who came from HTS receive their salaries regularly; fighters from the SNA or other factions do not.

So we are talking about revolutionary fighters, Sunni fighters, who feel that what has been achieved in Syria has not brought them the recognition they expected. The moral injury is still there. That is what I call ‘grievous masculinity’ and ‘combat-driven masculinity’. Grievous masculinity is about a fighter feeling that everything he paid, all he sacrificed, has not come to fruition with what he wanted to achieve.

Most of these men were not fighting for money. They were fighting for a moral cause. In the years when it was a stalemate, and Syria had disappeared from the news feed, I would ask them why they were still fighting, and the answer was moral.

Because the two ministries are not structured properly, and because the Disarmament, Demobilization, and Reintegration (DDR) process is not being handled well, this form of transitional masculinity could undermine Syria’s stability. The masculinity we might see under the new authority is still taking shape. It depends on which trajectory Syria heads towards: an inclusive, plural Syria, or a state that recognizes only HTS cadres.

What Does This Mean for Women?

The Syria Dispatch: With women making up around 20 percent of National Dialogue participants, one woman among 23 ministers, and 22 of 210 MPs, should transitional masculinities be understood as fundamentally man-centric: men working out what they are and what they will become, with women disregarded? Or is there something in it for women?

Rahaf Aldoughli: There are two things to say.

First, I regret not researching Kurdish female fighters, because this is an important component. The Women’s Protection Units are being integrated into the Ministry of Interior, and I have seen women training there. A whole security unit for women is being built. That is good news.

But I worry that it comes as an accessory: something that pleases Western criteria. And it is still early days to know whether this is an empowerment of women, or whether these women will be used to police women even further. Without oversight from the government or the parliament, without independent institutions and an independent judiciary, women’s security units can be used against women.

That is at the state level. When it comes to what transitional masculinity means for women in the private sphere, I am also guilty of not having expanded my work into what it means for women to live in a society of militarised masculinity. There is research in other contexts — Colombia, India, Ghana — asking what the emergence of armed groups means for women’s lives, for women in the private sphere, for the wives of fighters and commanders. There is definitely an outcome. Women face extra subordination when they live in a highly militarised society.

And we have already seen it in official statements. When spokespeople were asked why there are so few women in the Parliament and in state institutions, most of the answers came in sarcasm. One said that men now need their own feminism, because Syrian men still do not feel recognized.

This is exactly what happens after long years of armed conflict. Armed men come and sit around the negotiating table, each one gets his position, and women are left at the sidelines. Hundreds of armed factions have been dissolved and absorbed into state institutions, and the incentive given to those men is to stay silent, because if they were not absorbed into the two ministries, they might endanger Syria’s stability.

Women will not have an armed group and rally for their rights using guns.

I am not saying that Europeans or Western stakeholders should come and campaign for Syrian women’s rights. But without that pressure, women would be left out entirely, as in other examples around the world.

A Meal in the Northeast

The Syria Dispatch: Based on the information you have gathered during your fieldwork interview with a large number of male fighters, do you think Kurdish women can actually be accepted into the Ministry of Interior? These female fighters seem to represent a double clash: these are women disrupting what these men see as the natural order, but these are also women they were fighting until recently.

Rahaf Aldoughli: I heard a funny story from a man who is now in the Ministry of Interior. It was during the early days after Ministry of Defense forces were allowed into the north-east, in the first stage of meeting female Kurdish fighters.

Days before that, on social media, men were saying that it was shameful for men to accept these female fighters telling them what to do. The masculinity was running very high: we will kill them, we will not allow them; who do these heval (female comrade, in this context), think they are?

And then he told me: I was sitting with a heval, and I was very hungry, and she made me zaatar with oil, and we ate together.

I am not giving you a policy analysis. But that small incident tells you something. Men whose masculinity has come full circle into recognition—men who feel they fought for a long time and are now in a good position—are more able to accept this. A man whose masculinity is frustrated is not. A fighter from the SNA might still say he would rather shoot her.

I do want to add that international pressure played a very positive role here. In the mediation between European stakeholders and actors on the ground, the Europeans worked hard to prevent a military confrontation. They were not neutral, but they pushed both parties to sit around the negotiating table. Difficulties lie ahead, but this is a milestone.

Why Speaking Out Feels Different Now

The Syria Dispatch: You’ve previously mentioned to me that you have become far more cautious about what you post now than you were under Assad, when you were more outspoken. Can you say more about that shift?

Rahaf Aldoughli: Under Assad, the risk was legible. You knew who your adversary was, you had a reasonable sense of where the lines fell, and the cost was borne largely by you and was knowable in advance. Speaking out also had a community attached to it. Criticizing the regime placed you within a shared moral position, so it conferred standing rather than costing it.

We knew what the price was. In 2020, they held my father for eight hours, and he told them he did not know where I was, that I had left the family completely, that he had disowned me. For those of us speaking from the diaspora, the highest price was not being able to visit Syria.

What has changed is not that the risk is greater because it is, in some respects, smaller, but that it has become diffuse and social rather than centralized and political. Since Assad’s fall, outspoken criticism does not make you institutionally liable in the same way. Instead, public figures face character assassination. It started the minute Assad fell, with social media figures close to the authority, people with millions of followers, beginning to target critics.

The instrument now operates through networks rather than institutions: coordinated online campaigns, questions about who funds you, whether you are really Syrian, whether you spent the war comfortably abroad, and what your morals are. There is no institution to appeal to and nothing that can be formally answered. You are no longer fighting a political regime; you are placed in front of society and culture.

The charge has changed, too. Under Assad, the accusation was treason against the nation, and that you were a terrorist, an Islamist, an agent of Israel or America. Among the opposition, that functioned almost as a credential. Now the accusation is betrayal of the revolution, or betrayal of a fragile hope; the argument being that criticism at this moment serves Syria’s enemies and that one ought to wait. That lands differently, because it comes from people whose politics you share and whose losses you respect, and because it fractures the community that dissent used to create. I would say that it is this, rather than fear, that has changed how much I post.

The old regime also never said anything about our reputation as women, about my private life or my morals. Now the attack is on your reputation, your cultural background, and your work. Character assassination has become a form in itself for silencing women, men, and activists.

There is also a fear I cannot always rationalize, and a tangible one alongside it. Many of us do not want to be barred from going to Syria again, and I have seen several friends, women, targeted in exactly this way. So I am always cautious about writing criticism in Arabic now. If I write it in English, a specific audience will read it, and it becomes less applicable. I have had many invitations to comment on events in Arabic on Syrian channels, and I say no, because during the interview, I would be watching what I say. I don’t think it is just me. Many Syrian women are doing the same.

The Women You Do Not See

The Syria Dispatch: You also said that less publicly visible Syrian women may be navigating power on the ground with more resilience and courage than academics or public figures. What have you observed there?

Rahaf Aldoughli: The first point is structural. Those women are less exposed, and visibility is what makes character assassination efficient. A woman without a public profile has less to lose in that particular currency, which paradoxically gives her more room to act.

What I have found more striking, from my communications with women navigating this daily, is that their resistance is not declarative. It takes place at the point of enforcement. Segregation at the Umayyad Mosque, segregation in the judicial system, and dress requirements introduced in offices and institutions. These are contested at the door, in the corridor, at the desk, by individual women who argue, negotiate, delay, comply selectively, or persuade the man in front of them not to apply the rule that day. Some of the most effective work I have heard described consists of women talking to security men and convincing them.

I would not treat that as a lesser form of politics. It is the form that actually changes what happens, precisely because these restrictions are administrative and discretionary rather than legislated. They depend on individual enforcement, which means they can also be undone individually.

There is a body of theory that describes this. Deniz Kandiyoti’s account of the patriarchal bargain captures the negotiation-within-constraint quite precisely, and Asef Bayat’s work on social non-movements and the quiet encroachment of the ordinary describes dispersed, uncoordinated, cumulative action of exactly this kind.

Who Gets Access

The Syria Dispatch: Does that mean foreign researchers and activists have more freedom to work on Syria than Syrians do?

Rahaf Aldoughli: Of course. Take the early welcoming of scholars with certain Western affiliations, because the authority wanted to send a message through those affiliations. It was not keen to meet independent Syrians.

We have seen Western academics visit Syria and be welcomed, and even hailed and celebrated for writing on Syria. I have heard from them that they feel they can pass messages without being investigated. The assumption seems to be that a Western scholar will know less than a Syrian scholar and can be more easily managed. My Western colleagues and friends know very well that some of this amounts to whitewashing and legitimizing the authorities. But it gives them access, a good reputation in their policy work, and access not only to the current authority but to Europeans as well. It runs both ways.

For me, this goes back to my fieldwork. In the early days, when I first got access to fighters and commanders, a Western scholar would be asked which university they came from, where they would publish, and whether they would end up portraying their interviewees as terrorists or jihadis. With me, they asked whether I was Sunni or not. It was surveillance over what I believe, treating me not as a scholar but as a person who might get emotional in interpreting. They were working out which side I was on.

And a Syrian cannot be told that we cannot have inclusivity because Syria is a masculine society. I know Syria has been a masculine society for millennia. That is not something new. You may convince someone else with that narrative. You will not convince me.

Who Hardens, and Who Defects

The Syria Dispatch: Your forthcoming book tracks fighters’ motivations before and after Assad’s fall, including follow-up interviews after the coastal massacres and Suweida. Can you say more about the typology you are building? What made some fighters harden, and others defect?

Rahaf Aldoughli: The starting point is the distinction between the two formations. Grievous masculinity is organized around an injury, which means it requires an object. Combat-driven masculinity is organized around a practice, which means it requires an arena.

That distinction does a good deal of work after December 2024. Men in whom the grievous formation dominated tended to re-target: the regime disappeared, but the injury did not, and it migrated onto whoever could be made to stand in for the old order. Men in whom the combat formation dominated were less ideologically fixed but more easily reactivated, and their loyalty followed the unit and the commander rather than the cause, which is one reason they can be led out of an institution and then led back into it.

But the variable that actually sorts hardening from defection, on my material, is recognition. The transitional period produced a very specific situation. Men whose entire biography had been organized around a costly past arrived at the moment when that past was supposed to be honored, only to find the honor distributed to a narrower group. The message of man yuharrir yuqarrir (من يحرر يقرر)—‘he who liberates decides’—was effectively conveyed to a fighter who had served since 2014, been displaced repeatedly, and lost family members: he belonged among the liberated rather than the liberators because he had not taken part in the final operation. Add the age criteria that disqualified men over thirty from enrolment, and recruitment that ran on factional loyalty rather than qualification, and you have recognition withheld at scale.

What that produces is not the adaptive recalibration the reintegration literature would predict. It produces defensive intensification. The identity sharpens rather than dissolves, and it reaches for whatever materials the war years made emotionally available, which in this case means a specifically Sunni vocabulary of sacrifice and vindication.

The second axis, and the one I would still want to test properly, concerns whether a man has an alternative masculine biography available to him, because that is what makes exit possible. A man with a profession, an education, a trade, a standing in his community that predates the war can leave the institution and still be a man. A man for whom fighting constituted the whole of his adult selfhood cannot, because leaving would dissolve the self. One fighter from Douma put this to me directly: after all those years, he had known nothing in life other than belonging to the revolution, and if he could not be in the army, where could he be? He also said the marginalization felt harsher than Assad’s violence, because it came from the comrades of pain. That is not a man weighing options. That is a man with nowhere to stand.

The Wardrobe Changes, the Claim Does Not

The Syria Dispatch: In your MERIP piece, you compared Al-Sharaa’s staged persona to the Cuban hombre nuevo archetype. Has that self-fashioning changed as he has spent more time performing statesmanship internationally, or has it stayed remarkably constant?

Rahaf Aldoughli: My reading is that it has not changed so much as stratified, which is a different process.

When I wrote the MERIP piece, I described a deliberately hybrid form of self-fashioning: militant and diplomatic at once, pious and modern, Sunni but not Salafi. We saw Al-Sharaa enter the Aleppo Citadel in military dress, drawing on the iconography of the conquering man and adopting the name Al-Fatih (الفاتح), the Conqueror. We then saw him appear before the armed factions in January to announce their dissolution, relocating legitimacy away from party or ideology and concentrating it in a single male body: the ruler presented as the man capable of disarming other men and absorbing their political and military standing. Alongside this was another Al-Sharaa: suited, clean-shaven and composed, performing the language and demeanor of the technocratic statesman in international interviews.

What the past eighteen months have done is not replace the martial register with the statesman’s register, but allocate these registers to different audiences and political spaces. The suit belongs increasingly to foreign capitals and international broadcasters. The mosque, Eid prayer, and post-dawn address speak more directly to the domestic constituency. And then there are moments such as the December 8, 2025, parade, with its Umayyad symbolism, when the martial register is deliberately reactivated, reassuring the base that the revolutionary and conquering figure has not disappeared beneath the suit.

The wardrobe changes, but the underlying claim remains remarkably consistent: authority is embodied in a singular masculine figure capable of containing, disciplining, and ultimately absorbing the standing of other men.

Who Owns Sunnism?

The Syria Dispatch: Your forthcoming book Who Owns Sunnism is where the concepts of sectism and hyper-Sunnism come from. Can you walk me through how you arrived at that distinction?

Rahaf Aldoughli: What I am really trying to understand in this book is how sectarian identities in Syria have been produced, governed, and contested: by whom, through what institutions and mechanisms, and with what political consequences. I deliberately do not ask whether Syria is a sectarian society, because that question already presupposes what we need to explain.

I also do not start from the assumption that there is something called “the Sunni community” that behaves as a coherent political actor. Syrian Sunnis are Arabs, Kurds, Turkmens and Circassians; they are rural and urban, religious and secular, regime loyalists and opposition supporters. So, following Rogers Brubaker’s critique of groupism, I treat Sunnism less as a bounded group than as a site of contestation: a category through which religious identity has been governed and mobilized, but also one through which different actors have competed to define authority, authenticity and belonging.

What I found, looking at state–religion relations under Assad, is that the regime was doing something much more ambitious than simply controlling religion. It was trying to intervene inside the Sunni religious field and establish the authority to determine what legitimate Sunnism looked like. I call the outcome of this project ‘Conformist Sunnism’. The regime cultivated particular religious authorities, institutionalized particular forms of religious practice, and marginalized others. It was not simply a secular authoritarian state confronting religion from outside. It became an actor within the religious field itself.

But the book’s bottom-up material (interviews, surveys, and other primary research) shows the limits of that project. The state could regulate institutions and reward particular religious actors, but that did not mean it had acquired the religious legitimacy or consent it sought. That distinction between institutional control and religious authority became very important to me.

This is what led me to develop the concept of ‘sectism’. By sectism, I mean the persistent struggle within the Sunni field over who has the authority to define authoritative Sunnism: who is a proper Sunni, who can speak in its name, and how theology, political power, and political interest interact in producing claims to religious authenticity.

I draw here on Talal Asad’s understanding of Islam as a discursive tradition, constituted through arguments about the proper form of its own practice, and on Pierre Bourdieu’s understanding of the religious field as structured by competition over the authority to consecrate orthodoxy. Where I depart from much of the sectarianism literature is that it explains boundary-making between communities—Sunni and Alawi, Sunni and Shia, Muslim and Christian—but offers fewer tools for understanding the struggle inside one religious field.

And sectism did not begin with the Syrian conflict or with HTS. I see it as constitutive of the Sunni field itself. Conflict changes the intensity of the competition, the actors involved, and, crucially, the resources available to them. But it does not create the contest.

One argument I would most strongly defend in the book is that these two levels depend on each other. You cannot credibly mobilize Sunnis against an external communal threat until you have established some authority to say who “the Sunnis” are and what their interests are. Inter-communal mobilization depends upon prior intra-communal authorization. And what is fascinating about Syria is that nobody ever fully achieved that authorization.

You can see this very clearly in the opposition. The moderate-nationalist current produced documents such as the Aleppo Petition, the Muslim Brotherhood’s Covenant, the Islamic Council’s Five Principles and the Social Contract, which spoke overwhelmingly through the language of citizenship rather than Sunnism. But I argue that this was itself a sectist position. They were effectively saying: this is what proper Sunni politics should look like; authentic Sunnism is compatible with equal citizenship for all Syrians.

The hardline current offered a competing definition in which Sunnism becomes constitutive of the state. But I am very careful in the book about saying that this current won. It did not necessarily win the ideological argument. It won the court buildings. Where armed factions possessed coercive power, they established parallel courts, and people used those courts partly because their decisions could actually be enforced. That tells us something very important about state–religion relations: institutional dominance should not automatically be read as ideological consent.

The Syria Dispatch: And after December 2024? Is hyper-Sunnism moving towards consolidation into something more like an actual Islamist state project, or is “saturation without consolidation“ a stable equilibrium the authorities could maintain indefinitely?

Rahaf Aldoughli: What I am seeing is not straightforward Islamisation, and I do not think the evidence supports describing the new state simply as a Salafi project. “Hyper-” does not mean more Sunni or more religious. It describes a structural condition.

Sunni reference now saturates public life in ways that were impossible under Assad. We see it in sovereign performance, political language, public symbolism, institutional appointments, and the grammar through which authority presents itself. But no consolidated ideological or institutional program explains what all of this means for the state. That is why I describe hyper-Sunnism as saturation without consolidation.

And the absence of articulation is not incidental. It is part of the phenomenon itself. We do not yet have a coherent doctrine saying: this is the relationship between Islam and citizenship; this is where religious authority resides; this is the relationship between Sunni reference and the law; this is what the religious identity of the state institutionally entails.

That is the sharpest contrast with the Assad period. The Baathist project was extraordinarily interventionist. It operated through decrees, ministries, recognized religious authorities, institutional practices and publicly articulated claims. You could identify what the state was doing, and precisely because it was articulated, people could negotiate with it, resist it, or contest it.

What I am observing now is much more dispersed. Individual ministries, local authorities, religious actors, and political figures make interventions that accumulate without necessarily forming part of a single, centrally articulated religious program. No authority has yet established an uncontested capacity to regulate the Sunni field as the previous state attempted to do.

This is why I resist interpreting everything we are seeing as evidence of a coherent Islamist transformation. The absence of regulation is politically productive in itself. It allows multiple actors to invoke Sunnism, compete over its meaning and embed Sunni references across public life without resolving what an officially Sunni political order would actually mean.

So in a sense the book begins with the Assad state’s extraordinary attempt to govern Sunnism and ends with almost the inverse problem: what happens when the architecture that governed the religious field disappears, but the struggle over who has the authority to define Sunnism remains? For me, that is the central continuity across the regime’s fall. The actors have changed, the institutions have changed, and the distribution of power has changed dramatically. But the contest over who owns the authority to define Sunnism has not disappeared. It has become more visible.

Saddam in Old Damascus

The Syria Dispatch: You draw on an analogy some Sunni Syrians reportedly make between Al-Sharaa and Saddam Hussein’s model of masculine authority. Is that something you have heard directly and repeatedly, and is it made approvingly, critically, or both?

Rahaf Aldoughli: On my visits to Syria after the fall of the regime, photographs of Saddam Hussein were on display across old Damascus, which under Assad would have been unthinkable. That imagery was taboo, and its sudden visibility is itself the datum.

What it registers is not a governance preference but a symbolic attachment held in reserve for a long time. Saddam carries a particular charge in the imagination of many Syrian Sunnis, and what it condenses is a set of perceived grievances against Shia political and religious power.

A specific, local injury also lies beneath it. Under the previous regime, families were forced out of their homes in old Damascus, and those properties were transferred to Shia shrine complexes. That is not an abstract sectarian resentment. It is a dispossession with an address, and the people who experienced it are still there. So when the photographs appear in those quarters in particular, they are doing commemorative work about property and displacement as much as anything else.

And the timing is important. The rise of Saddam symbolism resonates with shifting regional dynamics, and I read its visibility as tracking that shift rather than expressing a considered political program.

Why Masculinity, and Not Feminism

The Syria Dispatch: You interview mostly men, and you work on masculinity rather than on women or feminism. Why?

Rahaf Aldoughli: The choice I made was never between gender and something else; it concerned where, within gender, the explanatory power lies in the Syrian case, and my answer is that it lies with the dominant category rather than the subordinated one.

Scholarship on women has told us a great deal about the effects of power, about who is excluded, who is harmed and what is foreclosed, but it is less well positioned to explain how that power is produced and reproduced, because the category doing the producing remains unexamined and therefore continues to appear natural rather than constructed. If one wants to account for how a regime governed Syria for five decades, why men fought in the ways they did, and why the structures that sustained them survived the collapse of the state that built them, then the dominant term has to become the object of analysis rather than the unremarked background against which analysis proceeds.

When I began interviewing fighters, I expected to encounter the incentive structures the literature assumes, whether material calculation, coercion or sectarian identification, and what the interviews returned instead was a vocabulary of honour, obligation, recognition, and moral injury, in which commitment was sustained far less by what men stood to gain than by what they understood manhood to require of them. Such a finding is not available from a research design that treats gender as a question only about women, and it is what led me to argue that masculinity in Syria is not a by-product of Baathist rule but one of its mechanisms, and that its structures have outlived the regime that produced them.

The same analytical gap runs through the study of sectarianism, which is where I have made the argument most directly. The field takes sect as the operative category and treats gender, on the rare occasions it appears at all, as a variable bearing upon women, and yet the mobilisation of sectarian identity in Syria works through claims about protection, honour and masculine duty, so that sectarianism read without gender appears primordial and inherited, whereas read through masculinity it becomes legible as a technique of rule.

None of this amounts to a dismissal of feminist scholarship, or of the Syrian feminist movement, which has achieved a great deal under conditions that make any achievement extraordinarily costly. My position is rather that we need a feminism generated from Syrian social conditions instead of transposed onto them, and that examining how masculine authority is constructed, legitimated and maintained forms part of building such a feminism rather than a departure from it.

The Syria Dispatch: But doesn’t that leave a gap in your work, then?

Rahaf Aldoughli: Yes, and it is one I now want to close: how this masculinity is affecting women, and especially the wives of central commanders.

I will give you two examples. In 2022 I was in Kilis, on the border, meeting the commander of Al-Jabha Al-Shamiya. It was in an apartment rather than an office, and since he knew I would be scrutinizing him, he brought a lawyer to make sure his answers were politically correct. When I asked him about women in his areas and how they were dealing with them, he said: “Doctora, we are completely pro-women’s rights. Do you know that we have asked our wives to launch an NGO to promote women’s rights?” And this was while I was telling him what I had heard from women activists: that their centers were being raided by his security men. So even that isn’t enough; these commanders can use women too. You see the complexity.

The other story is from the commander of the Third Corps. I always begin with the same questions: why did you join, how did you defect, what was the first feeling? He was from Hama, and he had been a military pilot. The first time the regime ordered him on a mission, he said he was ill. The second time, his wife told him that if he went, she would go outside unveiled and shame him. She told him she would rather receive him as a martyr than have him go and kill others.

He said it in passing. But for me, the gender component was enormous. His wife’s shaming forced him to defect and act manly.

We are grateful to Dr Rahaf Aldoughli for her time, openness, and generosity throughout this conversation.

Readers interested in exploring her work further can begin with Romanticizing Masculinity in Baathist Syria: Gender, Identity and Ideology (Manchester University Press, 2024), which she discussed at length in an interview with SyriaUntold. Her forthcoming books are Who Owns Sunnism, on sectism and the struggle over religious authority in Syria, and a study of Syrian armed groups and fighters’ motivations in the Syrian war.

Her recent writing on post-Assad Syria includes “Syria’s New Men: Masculinities and the Post-Asad Political Order“, the MERIP essay referred to above, and “Syria’s New Rulers Are Working To Unify Military Power“ in New Lines Magazine. Her academic work on fighters includes “‘The end of the revolution (al-thawra) but not revolutionaries (thuwwār)’: insights from Syrian fighters“, published in Conflict, Security & Development, and “‘Loyalism’ as masculinist identity politics: navigating the use of symbolic discourse in the Syrian war“, published in Contemporary Levant. On the Baathist state’s management of religion, see “Departing ‘secularism’: boundary appropriation and extension of the Syrian state in the religious domain since 2011“ in the British Journal of Middle Eastern Studies, and “Authoritarianism and the Emergence of Parallel State Dynamics: Evidence From the Syrian Earthquake“ in Digest of Middle East Studies.

Recent interviews and recorded discussions include “Syria remains an entirely masculinist state“ with L’Orient Today, “Al-Sharaa must be put under pressure“ with Qantara, and a talk on “End of the Revolution but not Revolutionaries“.

A fuller collection of her books, articles, and public-facing writing is available on her Lancaster University profile and her Google Scholar page.

Welcome to the August 2026 edition of the Syria Monthly Economic Digest.

This month’s issue has a specific theme running through it: policy moving faster than both the government’s ability to deliver and the people’s ability to adopt it, thereby raising questions about the underlying policymaking process.

The Central Bank ended the old pound’s legal-tender status on July 31, closing the first chapter of a process meant to facilitate transactions and break from the past, but then spent two weeks adjusting the terms: an exceptional window, an extension for the northeast, a nationwide extension, and an electronic channel. The adjustments were responsive, but they did not resolve the underlying liquidity shortage that the currency exchange process unintentionally (or purposely?) caused, and the cost fell on people paid in fixed sums who have to convert them into cash to live on. This is especially true for farmers, whose dues began flowing partly through Sham Cash because the Central Bank did not have the notes to pay them in full, after already weeks of delays. Another policy decision, the ‘banning’ of second-hand clothing imports, has a similar shape: a defensible objective, protecting domestic garment producers, arriving without a transitional period for traders holding stock cleared under a previous administration.

That last point is the month’s second thread, highlighting the dual-track process currently taking shape in the northeast’s integration. On the political and security sides, most, if not all, seems to be going as planned, with the oil integration closing one of the process’s many files. Yet on the economic side, that same process faces many obstacles. This is the first wheat procurement season run under the integration agreement, in the governorates that grow most of Syria’s wheat, and payment delays there are being felt acutely. If Damascus’s argument is that unified administration delivers better outcomes than what came before, and the case is a strong one, it should be made most persuasively on the ground. Yet in the northeast, the new currency has arrived late, if at all, and so have farmers’ payments.

At the international level, and as has been the case for the past 20 months, August was again a genuinely strong month. Washington rescinded Syria’s terrorism-sponsor designation on August 24. Saudi Arabia signed more than twenty agreements, including one on a joint bank and correspondent channels, while Türkiye signed as many as Ankara’s influence over the Syrian economy grows stronger. On public finance, the Ministry of Finance published a half-year budget execution report, which deserves credit: a line-item account of actual spending, published within two months of the period closing, is close to unprecedented in Syria. Yet it also leaves the most interesting question open, since the deficit was covered by short-term financing whose source is not named. More disclosure tends to generate more questions, which is a good problem to have, but only if the same authorities are willing to answer, and not only to share information as they wish.

As always, thanks for reading.

In This Month’s Issue

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Share This Issue

If you found this edition useful, please consider sharing it with colleagues or forwarding it to anyone interested in Syria’s political and economic developments.

Share

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

About the Syria Monthly Economic Digest

The Syria Monthly Economic Digest is a monthly publication by The Syria Dispatch that tracks the political and economic developments shaping Syria’s transition.

Each edition focuses on the developments that we believe matter most over the past month—not every headline, but the ones that reveal something important about where the country is heading. These may include policy decisions, investment announcements, energy and infrastructure projects, banking and monetary reforms, trade and reconstruction, property rights disputes, public services, and the evolving relationship between the Syrian state, society, and external actors.

The format is straightforward. Each article begins with a summary of what happened, followed by a “Why It Matters” section that provides additional context, background, and analysis.

The digest is written for readers who want a structured, analytical overview of Syria’s transition, including policymakers, researchers, journalists, diplomats, development practitioners, investors, civil society actors, and anyone interested in the country’s political economy.

It is not intended to be exhaustive, nor does it replace daily news coverage. Instead, it offers a monthly snapshot of the developments that we believe deserve closer attention and a better understanding of how they fit into Syria’s broader transition.

If you have comments, corrections, suggestions, or would like to collaborate, we would be delighted to hear from you.

Also Published This Month

In the Research & Analysis Section

In the Notes & Commentary Section

Articles Published Elsewhere

The IMF’s Visit to Syria: Lots of Good, a Little Bad — But Where is the Ugly? — Al-Jumhuriya (August 28, 2026)

Quotes and Media Appearances

• Official Study Tracks 15 Years of Inflation in Syria — EnabBaladi (Amir Hukuk, August 1, 2026)

• Why is the IMF betting on double-digit growth in Syria? — L’Orient-Le Jour (Amélie Zaccour, August 9, 2026)

• Egypt is finally moving on Syria reconstruction, starting with two September investment conferences — EntrepriseAM (Nourhan Fahmi, August 17, 2026)

• تمويل بلا تضخم أم اختبار جديد للثقة.. كيف ستتحول الصكوك السيادية في سوريا لأداة تنموية ؟ — Al-Ain Syria / العين السرورية (Humam Faidallah, August 17, 2026)

• Managing the Muhajirin: The Future of Syria’s Foreign Fighters — Combating Terrorism Center (Aaron Zelin, August 18, 2026)

• The Syria-Russia Bases Agreement: What it Really Means, and What Should Be Done for Syria’s Transition — TRENDS Group (Strategic Studies Department, August 21, 2026)

Key Developments: Syria’s economic relationship with Türkiye deepened across almost every sector in August, driven by a sequence of high-level visits. The Turkish energy and trade ministers each traveled to Syria, a deputy industry minister toured northern industrial zones, and a Turkish delegation of some 40 companies attended a bilateral business forum in Damascus timed to the opening of the 63rd Damascus International Fair. The engagement produced instruments covering hydrocarbons, mining, industrial-zone expansion and border infrastructure. Turkish customs data published during the month showed bilateral trade at a record USD 3.73 billion in 2025, but also that Syrian exports to Türkiye had fallen by nearly half over the same period.

These developments followed a presidential decree issued in the first week of the month that appointed a Türkiye-based businessman and founding officer of the Syrian–Turkish Business Council to head the state body responsible for licensing foreign investment. Indeed, on August 5, President al-Sharaa issued Decree No. 162 of 2026 naming Rawad Ramadan Director-General of the Syrian Investment Agency (SIA), replacing Talal al-Hilali, who had held the post since June 2025. Ramadan was described as a rising figure in Syrian business who has headed the Syrian Council for the Coordination of Joint Business Councils at the Ministry of Economy and Industry since January 2026 and previously served as deputy chairman of the Syrian–Turkish Business Council since its formal establishment in August 2025. Ramadan serves as executive board chairman of Isra Holding in Türkiye, a group active in real estate development, construction, energy, and investment funds. Notably, Syria’s Ministry of Economy and Industry has met with Isra Holding since June over the rehabilitation and expansion of Bab al-Hawa Industrial City, and the two signed the expansion agreement at the Damascus International Fair on August 26.

Before the Fair, Turkish Energy and Natural Resources Minister Alparslan Bayraktar traveled to Damascus on August 19, where President al-Sharaa received him at the People’s Palace, before signing several energy agreements with Syrian Energy Minister Mohammed al-Bashir. Bayraktar said state oil company TPAO and private Turkish firms were ready to conduct seismic surveys and exploration drilling on Syrian onshore and offshore blocks, with TPAO able to begin “immediately.” The visit also led to the signing of a phosphate-related memorandum of understanding (MoU), which the Turkish Ministry of Energy described as concluded between Turkish state mining company MTA International Company (MTAIC) and Syria’s general directorate for mineral resources. The Syrian Ministry of Energy characterized the instrument as a tripartite MoU in earth sciences and mining, and named MTA director-general Vedat Yanık and International Mining Company chief executive Nail Yıldırım as part of the delegation. Bayraktar said the MoU would extend to sulphuric and phosphoric acid production, rehabilitating the phosphate transport fleet, and building a railway linking the fields to a port.

In the electricity sector, Minister Bayraktar said commissioning the Birecik–Aleppo line announced in May would nearly triple Turkish electricity exports to between 800 and 900 MW, with the new infrastructure entering service “in the coming weeks”, while al-Bashir put the line’s entry into service at the end of September, delivering around 500 MW of additional electricity to Aleppo and its surroundings. Türkiye currently exports 281 MW and pipes 3.4 million cubic meters of gas per day through the Kilis line opened in August 2025, according to Bayraktar.

On the commercial side, Turkish Trade Minister Ömer Bolat inaugurated on August 14 a truck waiting terminal at Cilvegözü on the border with Bab al-Hawa alongside the head of the General Authority for Borders and Customs (GABC) Qutaiba Badawi, stating that bilateral trade grew 16 percent in the first seven months of 2026 after a 45 percent rise across 2025 to roughly USD 3.75 billion. Badawi said transit truck movements rose from about 3,500 in 2025 to more than 30,000 in the first seven months of 2026, and that six crossings are operational with Qamishli–Nusaybin under technical preparation. Speaking in Aleppo on August 27—his first visit to the city since 2004—Bolat put 2025 trade growth at 42 percent, said he had met Syrian ministers three times in a month, and reported a Syrian commitment to complete reopening of the Qamishli crossing by year-end. Türkiye’s trade ministry separately reported continuing expansion works at Cilvegözü (Bab al-Hawa on the Syrian side), Akçakale (Tal Abyad), Öncüpınar (Bab al-Salameh), Çobanbey (al-Rai), Karkamış (Jarablus) and Nusaybin (Qamishli).

In industry, a delegation from Türkiye’s Ministry of Industry and Technology, headed by deputy minister Oruç Baba İnan, entered Syria at the al-Rai crossing on August 19, where Deputy Minister of Economy and Industry Basel Abdul Hannan received it, and over the following day toured the al-Rai, al-Bab, Sheikh Najjar and Bab al-Hawa industrial cities before İnan met Economy and Industry Minister Nidal al-Shaar. At the Syrian–Turkish Businessmen Forum on August 26, attended by the 40-company Turkish delegation led by Bolat and Turkish Exporters Assembly chairman Mustafa Gültepe, Federation of Syrian Chambers of Commerce head Omar al-Ali announced work to raise trade to USD 10 billion. Newly-appointed SIA Director-General Rawad Ramadan addressed the same forum, telling participants that Syria needed broad investment across energy, infrastructure, real estate, tourism, agriculture and services. On the same day, the management of the Bab al-Hawa Industrial City and Isra Holding (Mr Ramadan’s company) signed an agreement for the expansion of Bab al-Hawa Industrial City with the aim of creating some 2,000 industrial investment opportunities.

In finance, Minister Bolat said further steps are expected on Turkish banks operating in Syria, following the Central Bank of Syria’s July 29 agreement to open an official account at the Central Bank of the Republic of Türkiye.

Why It Matters: In the reading circulating in Damascus, Talal al-Hilali had come to be seen as too closely aligned with the UAE, and both Ankara and Riyadh had grown uncomfortable with him; Rawad Ramadan’s elevation reads as a correction, placing at the head of the investment agency a figure whose commercial base is in Türkiye and whose institutional role since January has been coordinating Syria’s joint business councils. Notably, Ankara’s push arrived alongside the Saudi commitments covered in another entry of this month’s edition, and Ramadan’s appointment is one both capitals could welcome.

Yet, this appointment appears to carry an obvious conflict of interest, as hinted at in the Key Developments section. The SIA licenses foreign investment, and its new director-general chairs a Turkish holding company active in construction, real estate and energy; three weeks after his appointment, that company signed an industrial-zone expansion agreement with a state-managed entity at the Damascus International Fair, on a day when Ramadan himself addressed the accompanying business forum in his official capacity. As of publication, none of this has been publicly addressed, and no Syrian institution has published a conflict-of-interest framework that would govern the situation. For a state courting investors on the promise of predictable rules, leaving the question unanswered is a needless cost.

On the agreements and promises made in August, interconnection capacity, gas, phosphate processing, industrial-zone rehabilitation, and expanded crossings are all positive inputs that could raise what Syria can produce and move, rather than substituting for it. The Birecik–Aleppo line, if it enters service on the timetable al-Bashir gave, is the single largest addition to Syrian electricity supply in prospect. Yet the composition of trade is where the enthusiasm should stop.

Turkish Statistical Institute data show bilateral trade at a record USD 3.73 billion in 2025 and Syrian exports to Türkiye falling 46 percent over the same year, from USD 438 million to USD 235 million, reversing four consecutive years of gains. The export-to-import ratio widened from 5:1 to 15:1, and the partial 2026 figures point the same way. Syria is quickly losing ground as a supplier to its largest trading partner, and a USD 10 billion target reached on the present composition would mean roughly USD 9.4 billion of Turkish goods entering a market whose own producers are already struggling to compete against them.

Whether that is integration or displacement depends entirely on what crosses the border, and nothing announced in August distinguishes between the two, as Syrian industrialists have long been complaining of the current status quo. But the authorities in Damascus can still make that distinction through tariff structure, standards enforcement, and the sequencing of industrial-zone rehabilitation against import liberalization. Using such tools can be seen as protectionist and might run counter to the free-market philosophy adopted by the transitional government, yet it would ensure that the border crossings whose capacity is being expanded carry Syrian goods northward as well as Turkish goods south.

Overall, however, the expansion of Turkish economic weight in Syria is, on balance, good for the country: foreign direct investment, capital, inputs, and market access, from a neighbor with the industrial capacity to supply them. Still, as Turkish interest in Syria, both politically and commercially, grows, so does the Israeli–Turkish dispute being conducted on Syrian territory. On August 18, Israeli aircraft struck the Abu al-Duhur airbase in eastern Idlib, as Netanyahu’s office stated that Israel and Syria had agreed to a security status quo which Damascus was on the verge of breaching by allowing Turkish troops to deploy at the base, and that repeated Israeli warnings had been ignored. A Turkish official rejected the premise, saying no Turkish troops had been at the airbase.

Regardless of who wins the blame game, however, the costs of that exchange ultimately fall on Syria. The airbase is Syrian, the sovereignty violated is Syrian, and the reputational damage accrues to Syria rather than to either party to the dispute. The Syria Dispatch heard consistently from Turkish businesspeople in Ankara and Istanbul during August that the Israeli threat now features in their investment calculations, and that they consider themselves specifically exposed precisely because they are Turkish. That is the practical damage, and it lands on the same commercial relationship this entry has otherwise described as expanding.

Ankara and Tel Aviv have channels through which to manage their differences, and Syria’s reconstruction should not be the venue.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: August produced the densest month of Syrian–Saudi commercial activity since the February 2026 Riyadh package, falling into two clusters: an energy round at the start of the month, and a concentrated week from August 26 in which the Saudi transport minister’s visit, a central bank agreement, and the 63rd Damascus International Fair produced instruments across transport, finance, water, agriculture, and heavy industry.

On August 5, Syrian Electricity Company (SEC) executive director Omar Shaqrouq signed three power purchase agreements (PPAs) with Saudi contractor Mohammed A. Al-Harfi for three solar power plants totaling 760 MW of energy generation, in addition to 1,077 MWh of battery energy storage system (BESS) at Wadiyan al-Rabi in Rural Damascus, branded under the Shams al-Sham initiative and valued at roughly USD 1 billion. These three PPAs were followed by two accompanying technical cooperation agreements between Al-Harfi and Saudi Electricity Company for Projects Development (PDC) and Germany’s Siemens Energy, respectively. The projects appear to supersede the earlier February memorandum for 210 MW of solar power generation and 827 MWh of BESS. Also in the energy sector, Deputy Energy Minister for Oil Affairs Ghiath Diab received a Saudi energy ministry delegation on oil and gas cooperation on August 9.

In parallel, Saudi-Syrian collaboration extended to the transport sector, with significant sums at play there too. On August 20, the General Establishment for Road Transport awarded the Damascus–Palmyra–Deir ez-Zor rehabilitation contract to Syria’s Al-Kawati and Saudi Arabia’s Al-Rawaf at roughly USD 300 million over 780 days, covering some 425 kilometers of the corridor linking the capital to the east. Furthermore, the Minister of Transport’s Assistant Mohammad Rahhal and Saudi Deputy Minister of Transport Rumaih Al-Rumaih reviewed land transportation developments, rail and transit links, and logistical cooperation. The two parties noted truck traffic on the Türkiye–Syria–Jordan–Saudi axis had risen from about 10 to 30 vehicles daily against a target of 100, and that Syrian drivers were waiting 40 to 50 days for visas. On that last point, the two sides agreed to place the acceleration of multiple-entry permits on the agenda of the Saudi transport minister’s visit to Damascus at the end of the month, alongside driver license recognition and truck specifications. Still, despite the delays, Damascus exporters welcomed Riyadh’s resumption of driver visas after a fourteen-year suspension, saying it removed the high cost of transloading at the border.

Eventually, Saudi Transport Minister Saleh bin Nasser Al-Jasser’s visit to Damascus on August 27 led to the signing of four agreements on roads, rail, post, and aviation. The first two agreements covered railways and road transport on digitization, safety, and training, though limited to studies and technical frameworks; the third covered bilateral air transport based on the open-skies principle; and the fourth covered postal cooperation.

In finance, the Central Bank of Syria and the Saudi–Syrian Business Council agreed the same day to establish a joint Syrian–Saudi bank and to open direct correspondent channels, with Governor Safwat Raslan framing the objective around transfers tied to investment in tourism and real estate. Yet, no capital, ownership structure, or licensing timetable was announced.

August 27 got busier as Syrian–Saudi collaboration carried into the water sector, when the Syrian Ministry of Energy signed a technical services agreement with ACWA Power, Saudi Arabia’s Water Transmission Company (WTCO), and German consultancy Fichtner to prepare studies for desalination capacity of 1.2 million cubic meters per day and a water transmission network of some 400 kilometers. This development represents the study phase of the joint development agreement concluded in February.

Finally, President Ahmed al-Sharaa received Saudi–Syrian Business Council chairman Mohammed Abu Nayyan at the People’s Palace, accompanied by Economy Minister Nidal al-Shaar, for a week in which the 63rd Damascus International Fair converted much of the pipeline into signatures. Agriculture Minister Basil al-Suwaidan signed a memorandum of regulatory harmonization and cooperation with the Saudi Ministry of Environment, Water and Agriculture on August 28, followed by three separate memoranda with Saudi companies Khair Alhgeyad, Mazarina, and Manoura, covering fodder land, sheep export infrastructure, and fisheries and aquaculture, and a poultry sector memorandum with the Al-Sahli Group on August 29. Still at the International Fair, the Ministry of Economy and Industry signed a 30-year memorandum with Ithra Holding for the Hama iron and steel works: five years of rehabilitation followed by twenty-five years of operation, minimum output of 350,000 tonnes annually within four years, and an estimated 2,500 jobs. No project value was disclosed.

Subscribe now

Why It Matters: Compared with February 2026, the more than twenty agreements and other instruments signed in August across agriculture, transport, energy, communications, the economy, and banking seem to provide a more meaningful sign of institutional engagement than the single headline investment package. Given that most large projects to have materialized in Syria since December 2024 have been state-backed and politically driven, the succession of high-level Saudi delegations visiting Damascus and meeting their Syrian counterparts gives the recent developments some teeth. Still, most, if not all, of the agreements took the form of memoranda of understanding, which, since December 2024, have proven notoriously difficult to convert into binding agreements, let alone implemented projects. Most also remain unpriced: only one of the month’s instruments carried a stated contract value, and one other a reported valuation.

Another catch is that most of what actually changed in August did not require Riyadh to put up capital. Driver visas, open skies, and postal cooperation are administrative measures, but they immediately affect how Syrian businesses operate. In that sense, Riyadh’s modus operandi is closer to what the French government proposed to Syria more than a month ago. By contrast, most instruments involving significant capital remain at the feasibility-study, technical-agreement, or development-plan stage. Even the solar projects signed at the start of the month will not add generation capacity overnight. The difference between what changed immediately and what may eventually be built is probably the most important thing to keep in mind when reading August’s announcements.

The picture becomes clearer when viewed alongside Türkiye’s growing economic role in Syria. Ankara is increasingly present in industry, energy, and cross-border trade, while Riyadh is positioning itself around finance, logistics, water, and real estate. The two are therefore not necessarily competing for the same space, at least for now, and Damascus benefits from having both. That division of labor has yet to be tested by a case where the two countries’ interests collide over a major asset.

Whether the partner is Saudi Arabia, Türkiye, or another, the harder question is how any of this gets financed. The Damascus–Palmyra–Deir ez-Zor road is a state procurement, yet no funding source was disclosed for a USD 300 million contract. Sham View presents the opposite model, explicitly financed through investor capital with payments linked to construction progress. Still, reporting on comparable projects suggests much of that capital ultimately comes from advance payments by Syrian buyers rather than fresh foreign money. On that reading, the Saudi contribution is primarily a development model and a brand, not a direct capital transfer.

That makes the proposed joint bank more consequential than its modest billing suggests. Syria’s ability to move money through the international banking system remains a constraint on almost everything else, and its FATF grey-listing adds a further layer of friction. An agreement to establish a Syrian–Saudi bank and open direct correspondent channels is still only a statement of intent, but it is a statement of intent about the one thing that would determine whether the rest of August’s paperwork moves money at all.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On August 4, the Syrian Petroleum Company (SPC) announced it had assumed control of all oil fields in the Northeast, with SPC Director Youssef Qiblawi saying rehabilitation would begin immediately and take six months to a year. Qiblawi said the fields were producing more than 100,000 barrels of oil per day (bopd), with output expected to exceed 250,000 bopd by 2027. The handover implements the third clause of the January integration agreement between Damascus and the SDF, according to Qiblawi, which stipulated that the government take control of all border crossings and oil and gas fields in the region. Reporting in late August indicated that the transfer of all remaining fields and wells in Hasakah would be completed on September 10, following Mazloum Abdi’s August 25, 2026 announcement of the SDF’s dissolution.

The handover was accompanied by HKN Energy’s entry into Rmeilan, Syria’s largest field complex, which holds more than 1,300 wells and produced between 180,000 and 200,000 bopd before 2011, roughly half of national output, according to Qiblawi. It was reported that the state’s share of the project would be 70% versus 30% for the American company, and that Hasakah governorate would receive a share of revenues. Other reporting on the same agreement described a 25-year term with a phased revenue split, giving the government 60% during the first five years, 65% in a second phase, and 70% for the remainder of the contract. The agreement also includes salary increases for field employees and expanded environmental services for residents of the governorate.

More broadly, the Ministry of Energy reported that in H1 2026 it signed seven memoranda of understanding and three development contracts, completed 3,460 meters of drilling, repaired 21 wells, brought 152 wells into operation, and brought 10 new wells into service. It also reported rehabilitating five kilometers of the Conoco gas line and restarting the main pumping unit in Homs after a twelve-year stoppage.

In parallel, the SPC announced the complete removal of primitive refineries, known as harraqat (حراقات), from Deir Ezzor governorate. SPC Executive Support Director Majed Habib subsequently detailed the scale of the campaign: more than 1,660 units dismantled by company teams across Deir Ezzor and Hasakah, including over 1,200 in the al-Omar sector, around 400 in the Dijla sector and along the Jabsah line, and around 60 in the Shaddadi sector, with owners removing a further 300 themselves, bringing the total to approximately 2,000. Habib said individual units ranged from around 10 to around 400 barrels of capacity, that the file was complete in Deir Ezzor but ongoing in Raqqa, Hasakah, and rural Aleppo, and that the company had absorbed some former operators into formal employment, assisted owners in relocating equipment, and compensated eligible cases under an approved mechanism.

Against these consolidation measures, the Central Authority for Control and Inspection (CACI) disclosed findings of an investigation spanning May to August 2026 into a fraud at Deir Ezzor’s oil fields amounting to USD 28 million. The Authority reported preliminary damages of more than USD 8 million from contracting, maintenance work, and mismanagement, plus a further USD 20 million in price differentials on crude transport contracts between the Central Region administration and haulage companies. Following the three months of monitoring involving 22 inspectors, the Authority suspended nine officials and referred them to the judiciary, among them the director of Deir Ezzor fields, the director of oil transport and distribution for the Central Region, the transport supervisor, and several production and well-services officials at the al-Omar, al-Teim, and al-Tanak fields. It also directed the termination of contracts with non-compliant contractors and recommended precautionary seizure of the assets of those implicated. The specific findings included the absence of genuine tanker sealing at field loading yards, with loads estimated arbitrarily; maintenance contracts held for months by technically unqualified companies without objection from any technical or administrative committee; and producing wells left shut in without any party reporting or restarting them.

Separate investigations into six contracts dating from the Assad era concluded for the Baniyas refinery company between 2021 and 2024 identified violations worth old SYP 3.396 billion, of which old SYP 1.1378 billion consisted of price differentials granted to a contractor because of rising industrial diesel prices. Energy Minister Mohammad al-Bashir directed that oversight work continue until completion with results disclosed progressively, and said further files remained under review.

Ministry of Energy data for the first half of 2026 put crude production at 14.8 million barrels, refined products at 3.5 million tons, raw natural gas at 1.42 billion cubic meters, and clean gas at 1.25 billion cubic meters. Over the same period, the ministry recorded imports of 1.5 million tons of crude, 1.01 billion cubic meters of gas, 598,000 tons of diesel, 283,000 tons of petrol, 196,000 tons of LPG, and 32,000 tons of fuel oil, alongside 110 tankers received at oil terminals.

Against this backdrop, queues nevertheless returned to filling stations in Damascus and its countryside from August 11, which SADCOP attributed to an emergency technical fault in the petrol transfer pump on the Baniyas–Homs line, saying it activated an alternative supply plan by road tanker and discharged around 73,000 cubic meters of petroleum products over two days. Minister of Energy Mohammad Al-Bashir formed an inspection committee to determine why petrol was scarce in the capital despite being available in depots, requiring it to report within 48 hours. SPC Media Director Mohammad Nour al-Ahdab subsequently attributed the crisis to a halt in petrol production at the Homs refinery, the concentration of loading operations at the Baniyas depot, and higher demand, acknowledging that the supply system was operating with a limited safety margin and that reserve stocks required strengthening. He later denied reports of widespread substandard petrol at official stations, attributing quality complaints to mixing and to smuggled material circulating outside formal distribution channels.

Further highlighting the hydrocarbons sector’s fragility, on August 18, an explosion struck the main export pipeline from the Jabsah gas plant in Hasakah at around 4 AM, halting gas flow and disrupting supply to several power generation turbines; SPC said preliminary investigations pointed to deliberate sabotage and announced additional security measures around oil and gas facilities and transmission lines. The same day, three workers were killed by a hydrogen tank explosion during component replacement at the Baniyas thermal power plant.

Subscribe now

Why It Matters: August’s shortage echoes those reported in July, albeit for different reasons, and remains substantively different. Yet the result is the same, and public discontent is stark across the country. While July’s queues followed a pricing decision taken without a mechanism to compensate stations holding higher-cost inventory and thus represented a coordination failure, August’s followed a mechanical fault and a refinery outage and were a redundancy failure. The SPC’s own characterization of a limited safety margin is the more useful admission: with the Baniyas refinery under rehabilitation, loading concentrated at a single depot, and reserve stocks acknowledged as insufficient, the system has no absorptive capacity. The Jabsah sabotage makes the same point on the gas side, where a single line failure propagated directly into power generation. Investment announcements are accumulating faster than the buffers that would make the existing system tolerable to live with.

The harraqat file closes a thread this digest has followed since May. The state’s case was always sound on environmental, fiscal, and safety grounds, and removing roughly 2,000 units is a genuine administrative achievement in itself. But the distributive question remains open in the same form. SPC has described absorption into formal employment, equipment relocation, and compensation for eligible cases, without publishing the number of workers absorbed, the terms offered, or the value disbursed, which represent precisely the gaps that workers identified in Aleppo and Deir Ezzor earlier in the year. In parallel, the unresolved case of the dismissed Furat Petroleum employees, who appealed to the Energy Minister in early August after interviews held in May produced no decision, suggests that the Ministry’s capacity to absorb additional staff might be limited, or at least slower than its capacity to remove, close down, and dismiss. Given the many grievances piling up in Northeast Syria, this Ministry too will have to be careful about sequencing: informal refining is being eliminated in the same governorates where the population seems to be struggling the most and where the government cannot afford to be contested.

Still, as the integration process seems to be moving forward with few struggles, at the political level at least, Damascus managed to consolidate the oil sector on four fronts. The remaining fields outside government control were transferred to SPC, while the terms for operating the largest of them over the next 25 years were agreed. In Deir Ezzor, the parallel refining economy ended, and the state began prosecuting officials within its own oil bureaucracy. Taken together, these moves mark a significant shift in how the sector is controlled, addressing gaps that have remained since 2012. They also leave Damascus with fewer intermediaries to point to when problems arise. From September, more of the responsibility for what the sector produces, collects, and ultimately delivers to petrol stations in Damascus will rest directly with the state.

Finally, the corruption findings may appear less consequential than they are, as they raise questions about the state’s ability to manage its new oil contracts. The CACI identified failures in the basic functions that determine whether a revenue-sharing agreement can actually be enforced: metering, calibration, tanker sealing, load verification, contractor qualification, and monitoring of well productivity. A state that cannot verify how much crude leaves a loading yard cannot verify the basis on which its 60% or 70% share is calculated.

This is the practical side of the argument made in previous editions that contract design matter more than the identity of the investor. But, given this latest development, the question is no longer just how the contracts are designed; it is whether the state has the administrative capacity to enforce them. The sequencing is therefore unfavorable: the contracts were signed first, and these control weaknesses were documented afterward. That an external body uncovered the violations during a single field visit, rather than SPC’s own internal controls, should concern both counterparties and the Ministry of Finance—particularly given that oil and gas revenues only began flowing to the Treasury in May.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On August 31, the Ministry of Finance published a “citizen’s version” of its financial performance report covering the execution of the 2026 state budget from January 1 to June 30. Public revenue reached approximately USD 2.695 billion over the six months, equivalent to 31% of the USD 8.716 billion projected in the 2026 budget and a monthly average of around USD 449 million, while public expenditure reached approximately USD 3.7 billion, or 35% of approved appropriations, producing a fiscal deficit of about USD 1.005 billion. Against the first half of 2025, revenue rose by 111% and expenditure by 331%; the comparable half-year in 2025 showed revenue of USD 1.28 billion, expenditure of USD 858 million, and a surplus of USD 422 million.

Finance Minister Mohammad Yisr Barnieh described the report as the third installment in a disclosure series that began with the 2025 performance report and the 2026 Citizens Budget, and as a shift from publishing approved appropriations toward periodic reporting of actual execution.

On the revenue side, the report breaks the total into USD 1.079 billion in customs duties (40% of the half-year total, and 56% of the annual estimate for that line), USD 763 million in returns on state investments (28%; 41%), USD 601 million in oil and gas revenue (22%; 25%), and USD 252 million in taxes and fees (9%; 10%). Expenditure was distributed between USD 1.339 billion in wages, salaries, compensation and benefits (36% of the half-year total, 37% of the annual allocation), USD 1.025 billion in administrative spending (28%; 65%), USD 1.021 billion in investment spending (28%; 35%), and USD 315 million in subsidies and social security (9%; 13%).

The ministry attributed the expenditure increase mainly to the salary and wage rises applied from May, expanded spending on government priorities, and higher costs for imported goods, services and inputs driven by regional developments. It noted that oil and gas revenue only began being transferred to the ministry in May and that proceeds from the second mobile operator license were not collected during the period, meaning the half-year results reflect only part of expected annual revenue. The report states the deficit was managed through short-term investment financing repayable within a year, but did not mention the source of this financing.

In contrast (and perhaps in response) to low tax revenue collection, revenue administration and enforcement were a focus in August.

On August 17, Barnieh warned chambers of commerce and industry that repeated cases of under-valued invoices in customs declarations had reduced collection of the tax advance on imports, describing the practice as tax evasion subject to penalties unless corrected voluntarily. The minister suspended 34 employees on August 6, 24 in the finance directorates of Damascus, Hama and Aleppo and 10 at the Real Estate Bank, following 94 suspensions in May; the Central Bureau for Financial Control identified a 2021 Real Estate Bank contract carrying a financial impact of USD 8.454 million, and separately uncovered an embezzlement scheme involving real estate sales tax receipts at the Kiswah finance directorate. A national campaign to review state property investment contracts, run by the illicit enrichment committee with the Ministry of Finance, was launched on August 2.

Subscribe now

What It Matters: Barnieh presented the half-year result as a deficit “within target,” at 56% of the budgeted USD 1.8 billion. That sits awkwardly beside his own revision of full-year revenue to “close to USD 8 billion,” a downgrade of roughly USD 716 million against the April budget. If revenue lands there and appropriations execute in full, the deficit is closer to USD 2.5 billion, around 40% above target and equivalent to some 12.5% of an estimated GDP of USD 20 billion.

Such a ratio is unstable, since the denominator (the budget) is contested: the budget itself assumes GDP of around USD 33.7 billion, Barnieh has put 2025 output at USD 30.6 billion, and al-Sharaa has projected USD 50–60 billion for 2026. Still, and regardless of the ratio, a deficit overshoot of this order means finding some USD 700 million beyond what was budgeted, in a context where the sovereign sukuk framework has yet to produce a first issuance, and no domestic securities market exists to absorb one. The ministry’s warning that spending will accelerate as the wage increase reaches full effect may also mean cuts to development and investment expenditure.

On revenues, customs alone delivered 40% of half-year receipts, while taxes and fees delivered 9%, with the tax line executing at 10% of its annual allocation—by far the weakest performance of any category—against a budget that assumed taxes, fees and customs would jointly supply about half of revenue.

Looking at the structure of revenues, Syria remains fiscally a “border state” rather than a tax state, collecting where goods cross a frontier rather than where income and consumption are generated. That is not surprising given how weak tax enforcement has historically been. But this also reflects the new authorities’ institutional history: governing a large territory with limited administrative reach made customs the most practicable revenue source, and that lesson appears to have carried over. The General Authority for Land and Sea Ports was among the first bodies established after the collapse of the Assad regime, which says something about where the priority sat from the outset.

The reliance on customs revenue ties the budget to import volumes, which depend on an exchange rate and a trade regime the government is actively liberalizing; it is inflationary at the point of collection, since duties and the tax advance on imports pass into consumer prices; and it is regressive relative to a functioning income tax. Based on The Syria Dispatch’s review of the new tariff schedule, because most current duties are specific rather than ad valorem, assessed on the weight of goods, inflation quickly erodes their real value—and the government is left better off with more imports for more revenue, which undermines local industry and production it needs to protect. The August circular on under-valued declarations is a rational response to immediate leakage, but it is border enforcement standing in for a domestic tax base, and the reform meant to build that base is not expected to take effect before 2027.

Execution rates tell a similar story on the spending side: administrative spending ran at 65% of its annual allocation in six months, while subsidies and social security ran at 13%, so the fastest-disbursing category is the cost of running the state apparatus and the slowest is the one that reaches households directly. That is awkward given that August 2026 also produced reports that nine in ten Syrians remain in poverty and continued contraction of humanitarian food assistance amid funding shortfalls.

Finally, despite the overall transparency, the financing disclosure is the report’s clearest gap: the deficit was covered by short-term investment financing repaid within a year, with no instrument, counterparty, cost, or maturity given. The sukuk and treasury securities framework was still at the draft-strategy stage in mid-July, as covered in last month’s edition, so whatever financed the first-half gap was not that. A government that has genuinely stopped borrowing from the Central Bank—a real and underrated break with the pre-2024 model—has a strong story to tell about how it is financing itself instead, and not telling it invites the assumption that the answer is less clean than the alternative.

That said, the disclosure deserves credit on its own terms: a mid-year execution report with a line-item breakdown, published within two months of the period closing, is not the regional norm, even if these are in-year figures from a twenty-one-slide summary rather than audited accounts. The year-on-year comparison is about as flattering as it could be, given that the first half of 2025 ran on a one-twelfth budget based on appropriations inherited from the former government, so the 331% expenditure increase measures a state resuming normal fiscal operation across reunified territory at least as much as a decision to spend more.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: The Central Bank of Syria (CBS) began withdrawing the old Syrian pound on July 31, after the replacement deadline expired on July 30. In its August 2 statement, the CBS confirmed that old banknotes of all denominations had lost their legal-tender status (al-quwwa al-ibra’iyya, القوة الإبرائية), were no longer legally valid in financial transactions, and could not be used to settle obligations or discharge payments in any form. The CBS put the overall replacement rate above 95% of the monetary mass on preliminary estimates, up from the roughly 80% reported in July, while CBS Governor Mohammad Safwat Raslan separately cited a figure above 90%.

Citing that completion rate, the CBS granted an exceptional one-week window running from Sunday, August 2 to Thursday, August 6, during which holders could surrender old notes and receive their value in the new currency through all public and private banks and Syrian Post branches in every governorate, free of commissions, fees, taxes or other charges. After that window, withdrawals were to continue for five years exclusively through the CBS’ Damascus headquarters, using an online appointment-booking mechanism. To manage demand in the northeast, the CBS announced on August 3 the extension of operating hours at 20 Syrian Post outlets across Raqqa, Hasakah and Deir Ezzor to 8:30 AM–7:30 PM through August 6, and waived both prior online registration and the requirement to present 100 notes of a given denomination for the duration of the window. Two days later, on August 5, the CBS announced that the exchange process in the northeastern governorates would be extended until August 20.

On August 9, the CBS again reversed course, allowing withdrawals to continue through authorized Syrian Post outlets in all governorates for a period of five years, so that citizens need not travel to Damascus, and that it was coordinating with the Syrian Post to increase the number of counters. That decision effectively canceled the earlier restriction on direct exchanges, limited to the eastern governorates, until August 20. On August 14, it opened an electronic application channel under which the counter-value is credited to a bank account nominated by the applicant, with eligibility restricted to Syrian natural persons and one application permitted per holder.

Amid these decisions, confusion over the currency exchange process was felt unevenly, with the Northeast, still in the process of political, security, and economic integration, seemingly bearing the brunt. Reports in early August said delays in opening exchange centers in Raqqa and Hasakah caused near-paralysis in buying and selling, and that many residents disposed of their old-currency savings by selling them for dollars at rates reaching SYP 17,000 old (SYP 170 new) to the dollar, well above the prevailing rate of around SYP 130 to 132 per USD. Reporting from Qamishli in late August, Alexander McKeever told The Syria Dispatch that the old currency remained the dominant medium of exchange in the city despite having lost its legal-tender status, with most purchases settled in old notes and change returned in them (Visit Alexander’s publication: This Week in Northern Syria).

Reports also documented a parallel market in Damascus in which the standard offer was SYP 750 new for every SYP 100,000 old (instead of SYP 75,000), with intermediaries trading banknotes as an actual commodity and targeting the elderly, the low-income, and those unable to reach official centers before the deadline.

Internal security forces in Raqqa detained three money changers on August 4 for exploiting citizens and manipulating exchange rates in old-currency transactions. Still, such operations do not seem to be strong enough deterrents to prevent abuses.

In Hasakah, rumors in mid-August that August 18 was the final date for accepting old notes triggered renewed panic, prompting the CBS’ media department to restate that the end of legal-tender status did not extinguish the right to exchange; residents described petrol stations, phone dealers and wholesalers refusing old notes or demanding payment in dollars, and queues at centers that ran out of new banknotes. Governor Raslan responded to the Hasakah dispute in a Facebook comment, questioning the extent to which the bank was responsible for “refining people’s morals” and attributing part of the disruption to profiteering.

Adding to the confusion and the quick succession of decisions, shortages of small denominations, especially the CBS decision not to print a SYP 5 note, despite printing a SYP 25 note, compounded problems related to the new currency. For instance, reporting from the coast documented grocers substituting an egg or a piece of confectionery for change of SYP 10 or 25 new, and pharmacists offering paracetamol sachets or plasters in place of small balances, with one public employee reporting he had yet to handle a SYP 25 new note. The Syria Dispatch observed the same pattern firsthand in Damascus during the first two weeks of August, with SYP 5 change either withheld altogether or returned as a single falafel or apple, or in old SYP 500 notes, nominally equivalent to SYP 5 new but no longer legal tender.

The lack of small denomination also led internal transport drivers in Raqqa striking on August 10 and gathering outside the governorate building over the same shortage: fares are set at SYP 30 new (SYP 3,000 old) while passengers tender 20 or 25, and drivers described returning biscuits, chewing gum and lighters in lieu of change, demanding either a fare increase to SYP 50 new (SYP 5,000 old) or subsidised diesel allowing them to hold the fare at SYP 20 new (SYP 2,000 old). The transition also remains incomplete in the unit of account, even with state institutions and large companies such as the General Telecommunications Company and Zain (formerly MTN) still issuing bills denominated in old lira, and the old SYP 500 note still circulating in transport and markets.

The liquidity squeeze caused by a lack of new currency in the market migrated into the digital payments layer and money exchange companies. Complaints in Aleppo surfaced on August 7 that exchange offices would settle Sham Cash balances only in dollars, and that intermediaries were charging between SYP 150 and 180 for every SYP 10,000 new withdrawn. A withdrawal ceiling of SYP 14,400 new on August 11 at one Al-Fouad branch, which was also settling dollars at SYP 119 new, was also recorded. Later reporting found that numerous Damascus exchange companies had suspended the service entirely, citing a failure in the electronic link with the CBS, while sources attributed the suspension to the bank halting cash withdrawals by those companies beyond limited quantities.

Sham Cash responded by launching an online complaints channel and reaffirming a maximum withdrawal commission of three per thousand (0.3%). Marketing director Mohammad Basiki subsequently set out a ceiling of three per thousand on withdrawals and two per thousand on deposits, down from five per thousand before the new currency, noting that the company retains none of the commission, that 29 authorized companies provide the service, and that the regulation of exchange offices falls to other authorities. By August 20, public-sector employees could not convert salaries into cash at any office, and an informal market emerged in which brokers discounted balances by as much as 15% for cash. Basiki denied any platform-wide ceiling, while an exchange-sector source attributed the rationing to CBS liquidity management and to the volume of old currency withdrawn exceeding the volume of new currency injected.

Subscribe now

Why It Matters: Both risks that materialized in August, the convoluted post-July 31 procedure and the liquidity crisis, were flagged in advance. On August 3, one expert warned that confining exchange to Damascus would open a parallel market in old notes, with holders unable to travel selling below face value to intermediaries who would capture the spread, while another argued that the five-year horizon was generous but that outcomes depended on banking-sector liquidity and the easing of withdrawal restrictions; a third attributed the change shortage to the concentration of issuance in higher denominations. The many decisions and reversals in the first two weeks of the month are both confirmation that the mechanism was designed without its distributional consequences worked through and a sign of responsiveness, and they eased access to the service while leaving the conditions attached to it untouched; no remedy has been announced for the denominations at all.

As for the liquidity crisis itself, one economist calculated that an economy of USD 18–19 billion settling some 85% of payments in cash needs a working stock of SYP 400–430 billion new, against which he put immediately usable cash at SYP 300–340 billion new (USD 2.5–2.8 billion)—a gap sized at 20–28% of the economy’s cash requirement, stalling roughly SYP 4 billion new (USD 33 million) of transactions a day and concentrated geographically enough to open an 8.5% spread between the dollar rate in eastern exchange shops and the rest of the country.

That number describes a failure which has now materialized through every layer of the financial and transaction chains, with banks rationing withdrawals and exchange and transfer companies, which hold the country’s largest private cash inventories and exist to convert balances into notes, suspending the service outright in Damascus. The most telling adaptation is that some offices in Aleppo would pay only in dollars. Faced with a shortage of one currency, the SYP, the market substituted another, the USD. As a result, the redenomination process, initially intended to restore confidence in the national currency, has, in its execution, made a foreign one the more reliable medium of exchange in parts of the country.

Far from a mere technicality, this incidence is also regressive at every stage. For instance, the Agricultural Cooperative Bank’s decision to route 25% of wheat farmers’ net dues through Sham Cash came precisely because the CBS lacked the cash to pay in full. Public employees and now farmers—people paid in fixed sums they must convert entirely into cash to live on, especially since digital payments scarcely exist in Syria—absorb a levy of up to 15% to access their own money, while anyone holding dollars or bank deposits they need not draw down pays nothing. This is a transfer from the poorest cash-dependent households to whoever holds banknotes, and it is invisible in every official statistic.

Still, the bigger question the month, and those prior, in fact, leaves unanswered is why the CBS is short of cash at all. The bank has not published a figure for new currency in circulation, and the possibilities are not equally benign: a printing or distribution bottleneck is a logistical problem that will resolve, while a deliberate decision to hold the money supply tight in order to force adoption of electronic payment is a policy choice being made without being announced.

The August 22 adoption of a licensing and supervision framework for payment service providers and e-money issuers, and the floating of semi-monthly salary payments to spread cash demand, both point toward the second. Still, lack of liquidity could also be a way for the CBS to stabilize the exchange by constraining money in circulation, but this is not an ideal policy decision (READ: Currency Replacement Ends as Syria Builds New Monetary Policy Tools). Back to digitization, this remains a defensible objective, and Syria will need it. But adoption compelled by the unavailability of cash is not the same as adoption earned by a payment system people trust, and people who did not choose it are now paying the bill in 15% increments.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: On August 24, the United States formally rescinded Syria’s designation as a State Sponsor of Terrorism (SST), posting the removal on the US Treasury’s website after the 45-day congressional notification period triggered by President Donald Trump’s July 8 notification expired. Secretary of State Marco Rubio announced that he had also delisted Hay’at Tahrir al-Sham as a Specially Designated Global Terrorist (SDGT), stating that the two actions “eliminate the final major barriers” to private-sector investment in Syria and citing the Syrian government’s counterterrorism record, including its accession to the Global Coalition to Defeat ISIS in November 2025 and operations against ISIS, Al-Qaeda, Hezbollah, and Iran-aligned networks. Syria had been designated since 1979, and its removal leaves Cuba, Iran, and North Korea on the list.

The rescission terminates or waives restrictions flowing from the designation under several statutes, including the Arms Export Control Act, the National Defense Authorization Act for Fiscal Year 2019, the Foreign Assistance Act of 1961, the Syria Accountability and Lebanese Sovereignty Restoration Act (SALSA) of 2003, and the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.

The delisting followed months of negotiation spanning economic and security files. Damascus committed to sharply reducing Russian crude imports during the SST discussions, though US officials denied any formal linkage; Russian shipments had risen 75% this year to roughly 60,000 barrels per day, making Moscow Syria’s dominant supplier. Two further steps pointed in a similar direction: on August 9 the Syrian foreign ministry announced a memorandum of understanding converting the Hmeimim airbase and Tartous naval base into joint training centers and returning their civilian facilities to Damascus within three months, and a civil aviation delegation met Russian counterparts at Latakia International Airport on August 13 to begin handover procedures. Neither was framed as a concession to Washington, but both narrow Russia’s autonomous footprint in ways US policy has explicitly sought.

Subscribe now

Why It Matters: While the rescission of the SST designation lifts one of the largest pieces of American legislation impeding Syria’s recovery, significant compliance obligations survive the rescission.

At the US government level, sanctions under the Countering America’s Adversaries Through Sanctions Act continue to apply, and Assad-era figures, human rights abusers, and Captagon traffickers remain on the Specially Designated Nationals list, as set out in the updated Tri-Seal Advisory. The Department of Commerce is still revising the Export Administration Regulations, and the State Department is also in the process of publishing an amendment removing the policy of denial1 under the International Traffic in Arms Regulations, though only once remaining statutory restrictions are resolved–principally the SALSA prohibition on exporting US Munitions List items, for which a waiver was transmitted to Congress alongside the rescission.

Direct US economic support remains constrained, as the US Development Finance Corporation still does not operate in Syria, absent its own regulatory action, and the Export–Import Bank of the United States (EXIM) as Syria remains on the risk-based country limitation schedule. Finally, any change to the visa-waiver exemption under INA Section 217(a)(12); that is, an obscure piece of ‘sanctions’ that prevents foreign nationals who visited ‘high-risk’ jurisdictions, including Syria, from benefiting from the Visa Waiver Program to enter the US, requires congressional action.

At the private sector level, however, the extent to which the SST rescission will have a direct, short-term effect is unclear. While many private sector actors have pointed to the SST as the main obstacle preventing their entry into the Syrian market, as reported to The Syria Dispatch, it is worth asking whether the designation was ever the main binding constraint. Syria was listed in 1979, yet traded with the United States and stayed connected to the banking system for much of the intervening period; the label’s direct effects fell mainly on bilateral assistance and defense exports, and much of its weight was reputational. On that reading, the restrictions under the SALSA of 2003 might have been more damaging to trade and investment, and the practical question is which of its provisions survive the August 24 waiver.

Another question is whether American companies will now use this last piece of legislation to justify staying far from the US market, as the American administration encourages them as much as possible to go into Syria, raising the question of the wider gap between legal permission and commercial behavior.

The US Treasury has already confirmed that American financial institutions may service Syrian clients, process payments involving Syrian banks, and establish correspondent relationships without involving sanctioned parties. The investor guides published by the US Embassy in Syria point in the same direction, presenting investment in Syria as something the US government views favorably. Washington has also acknowledged the constraints that remain, recently publishing a grant opportunity for projects benefiting Syria that “advance US commercial diplomacy and put American interests first.” That willingness to press American commercial interests in Syria sits within President Donald Trump’s stated foreign policy ambition of making America “safer, stronger, and more prosperous”.

Yet, the obstacles that remain today are operational rather than legal. Commercial and business activity remains constrained by the lack of established correspondent relationships, the scarcity of credit, persistent security risks in the east where the most valuable hydrocarbon assets sit, and weak frameworks for contract enforcement.

Subscribe now

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: Around 100 traders and workers in the second-hand clothing trade, locally known as bala (بالة), demonstrated outside the customs building in Raqqa on the morning of Sunday, August 16, against the General Authority for Land and Sea Ports (GALSP) decision banning the import, sale, purchase and circulation of used clothing inside Syria, and demanded the release of detained traders and the cancellation of fines. Leading up to the protests, the customs police had imposed substantial fines on a number of Raqqa traders, with individual cases cited by traders including a fine of USD 1,080 levied after the sale of a single 40-kilogram bundle, a fine of roughly USD 7,500 demanded from a detained trader whose goods were valued at around USD 700, and a single case reported at approximately USD 460,000 on confiscated goods.

These latest developments come as enforcement of the prohibition tightened over the summer, concentrated in the northeast, as a direct product of institutional unification rather than the tariff alone. Traders say a March 2025 ban on the import of second-hand clothing was not applied in the Northeast in the same way as the rest of Syria, because the region was then administered by Autonomous Administration of North and East Syria (AANES) institutions and imports continued through the Semalka crossing with Iraqi Kurdistan under the commercial arrangements applied there. Imports stopped once the Syrian government took over administration of Raqqa in January 2026, leaving wholesalers holding stock brought in beforehand and with the GALSP requiring Raqqa traders to re-clear warehouse stock previously cleared through AANES channels. Traders reported that fines and seizures began without prior warning or any transitional period to liquidate existing inventory, and asked for an inventory of pre-decision stock and permission to sell it down. The effects have extended to Hasakah, where shipments can no longer cross the crossings and shops on the city’s Bala Street have closed or switched to selling new clothing.

In the Raqqa governorate alone, people working in the trade estimated that around 30 wholesale outlets and between 500 and 600 retail shops sell second-hand clothing, while roughly 1,500 households privately buy bundles of clothes for resale to supplement income. Local traders say the price gap explains demand for second-hand clothing: a used pair of trousers sells for about USD 1.5 against roughly USD 10 for a locally manufactured equivalent, and used footwear of reasonable quality sells for around USD 10 against USD 30 to 40 for new domestic shoes. Furthermore, traders in Hasakah argue that local factories currently produce neither the volume nor the quality needed at prices matching household incomes.

The decision to ban the import of second-hand clothing stems from Syria’s new harmonized customs tariff, as issued under Decree 110 of 2026 and in force from June 1, 2026, which places used clothing outside the ordinary duty structure altogether. In the tariff schedule reviewed by The Syria Dispatch, heading number 6309 (the international code for ‘used clothing and other used articles’) carries the entry “negative list“ in the import-duty, service-fee and total columns, rather than a rate, in contrast with the neighboring textile headings 6306 to 6308, which are themselves assigned an import duty.

Subscribe now

Why It Matters: The prohibition on importing second-hand clothing sits at the end of a sequence of reversals dating back to the early years of the conflict. In late 2013, the former Deputy-Minister of Economy Abdel Salam Ali framed the decision as not wanting Syria to become “the world’s garbage disposal,” but also to protect the local textile industry. In July 2018, the then Ministry of Internal Trade, led by Abdallah Al-Gharbi, reaffirmed the decision, arguing that imports were already prohibited and that the trade harmed national industry.

In areas under the former Assad regime's control until December 2024, the import ban was, on paper at least, still in full force. Following the transition, however, enforcement lapsed, but the new government then reimposed an import ban at the start of March 2025, again citing the need to protect the national garment industry. In the intervening period, the trade was in practice taxed rather than eliminated: traders in Idlib reported paying duties of USD 4,000 per ton on imported used clothing by August 2025, while Damascus traders described charges of USD 2 to 4 per kilogram in December 2025, raising the landed cost of a bundle from about USD 150 to over USD 250. Domestic manufacturers have continued to press for restrictions, with garment producers in Hama describing inflows of baled clothing and cheap imported ready-made garments as unfair competition in July 2026.

This sequence marked prohibition, collapse of enforcement, prohibition again, then taxation in practice, then a tariff line marked “negative list” provides an interesting read on the state of Syrian trade administration as much as on the current state of used clothing. Each reversal followed a change in who controlled the relevant territory and the relevant customs post, rather than a change in policy reasoning. The Northeast illustrates the point most sharply. Under the AANES, Damascus’ March 2025 ban had no effect. When it was, the rule arrived seemingly without the transition that would normally accompany extending a legal regime into territory where a different one had been in force. This sudden change led traders to account retroactively for stock that was lawfully cleared under the authority that governed them at the time.

While the rationale is clear, and the stated beneficiary is the domestic garment industry—which faces real cost pressures and has been calling for protection—the immediate cost falls on low-income households and on a retail and resale network that, in Raqqa alone, includes several hundred shops and roughly 1,500 families selling clothing from home. Banning used clothing is likely to push up the effective cost of clothing for these families several-fold, at a time when local production is not, according to traders in Hasakah, in a position to replace it at comparable prices.

Beyond the price paid by consumers, enforcement against traders has also been strict and, at times, appears disproportionate to the transactions involved: as mentioned, roughly USD 7,500 demanded on goods worth about USD 700, and USD 1,080 on the sale of a single bundle. Detaining retail traders and seizing vehicles carrying small quantities between the city and the countryside also places much of the burden on the least consequential participants in the chain.

If the policy objective is to stop used clothing from entering Syria, the most effective point of intervention would be at the border, rather than at the shop. Mirrored bilateral trade data suggest that Syrian imports of used clothing did not stop after March 2025 (see table below), indicating that the issue may lie at customs centers themselves. Yet, when budget disclosures show that customs duties accounted for 40% of state revenues in the first half of 2026, compared with just 9% from taxes, it is easy to understand why the government might have an incentive to maintain import flows across a wide range of products (READ: Finance Ministry Publishes First-Half Results as Spending Outruns a Recovering Revenue Base).

In fact, placing items on an unclear “negative list” itself leaves room for inconsistent enforcement. No published source sets out what the marking obliges customs officers to do, and the material accompanying Presidential Decree No. 110 of 2026 does not define it. It is widely understood as a prohibition and, for some headings, appears to be absolute. According to first-hand accounts from Damascus gathered by The Syria Dispatch, musical instruments, which also appear on the “negative list”, are indeed prohibited from being imported into the country.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.

Key Developments: The Syrian Grain Corporation (SGC) announced on August 5 that it had taken in 2.7 million tons of wheat from farmers this season, above the 2.55 million tons it treats as Syria’s annual requirement. SGC Deputy Director General Ahmad Qadoun said the next day that Syria would need no imports this season, and that it last achieved wheat self-sufficiency in 2010, when pre-war output stood at around 4.1 million tons. Qadoun separately clarified that the 2.7 million-ton figure measures deliveries to state collection centers, not total national production.

Yet other figures suggest confusion over Syria’s total wheat requirement: a Ministry of Agriculture official put annual needs closer to 4 million tons in 2026, with the gap covering non-bread uses such as seed, feed, and bulgur, as the 2.7 million-ton figure relates only to Arabic bread. But even regarding bread, the matter is not that simple.

Procurement data through mid-July split the crop into 54.4% soft wheat and 45.6% durum, which, applied to the full 2.7 million tons and measured against the 80/20 soft-to-durum blend used for Arabic bread, implies a soft wheat shortfall of roughly 570,000 tons alongside a durum surplus of roughly 720,000 tons, as set out in our standalone analysis this month. Moreover, despite Mr Qadoun’s claims that wheat imports will not be necessary, imports have continued regardless: a shipment arrived at Tartous Berth 4 on August 11, in the first vessels handled there after the berth’s handover from Russian forces.

As for the harvest itself, Ministry of Agriculture data put the area sown at roughly 1.4 million hectares with expected output above 3 million tons, against 934,183 tons in 2025, when drought pushed rainfed areas almost entirely out of production (actual rainfed output that year was 29,000 tons against a planned 800,000). The Ministry fully executed its 2026 Agricultural Plan, with average yields above 3,000 kg per hectare on irrigated land and around 1,800 kg on rainfed land. Hasakeh accounts for about 37% of output, followed by Raqqa and Aleppo at 18% each and Deir Ezzor at 11%; Hasakeh alone had marketed 1.15 million tons by August 2.

Still, following up on July’s story of unpaid dues, payment continued to lag well behind procurement. To facilitate the transfer of wheat dues, the Agricultural Cooperative Bank (ACB) issued a circular on August 13 directing branches to transfer 25% of farmers’ net dues to their Sham Cash accounts, with the remaining 75% to be paid under existing procedures (via ACB branches). The circular said the measure was necessary because the Central Bank of Syria (CBS) lacked the liquidity to settle grain values in full. SGC Director General Hassan Othman said new SYP 35 billion had been transferred in a first tranche (USD 265 million), followed by new SYP 65 billion (USD 492 million)—together the full new SYP 100 billion (USD 757 million) allocated for procurement, against a bill of roughly new SYP 148.5 billion (USD 1.12 billion) calculated from the official price of new SYP 55,000 per ton for 2.7 million tons.

While some invoices are already being settled, the director of one of the ACB’s Hasakah branches, Azzou al-Hamed, said instructions concerning Sham Cash had not yet reached the branch, as his branch began settling invoices up to new SYP 1 million (old SYP 100 million; around USD 7,576) in cash in a single payment, while larger invoices are to be paid in four equal monthly installments. This scheme appears simpler than the three-tier schedule reported in July, which required an initial payment plus three installments for invoices between 1 and 5 million. Nevertheless, the Sham Cash mechanism proved unpopular among farmers who objected to it on three points: the 25% share is too small to clear debts that fell due in mid-July, older farmers often hold no account and cannot use the application, and cashing out requires travel to agents, with some fearing undisclosed deductions.

Alongside the complications of delayed payments, two relief measures were issued. On August 9, the finance and agriculture ministers agreed to extend repayment of non-performing agricultural loans by three months under Presidential Decree No. 70 of 2026, and to direct the ACB toward concessional lending for modern irrigation, machinery, and solar systems. On August 24, the Drought and Natural Disaster Mitigation Fund approved compensation of SYP 112 million for around 1,700 farmers in Idlib, Aleppo, Quneitra, and Tartous—the first three included for the first time—for flood, storm, and waterspout damage. While reports did not specify the denomination, the scale implies new SYP (around USD 830,000, or roughly USD 490 per farmer). The agriculture minister also instructed officials to complete the parallel compensation file for Deir Ezzor, Raqqa, and Hasakeh (at the time of writing, it is unclear how much has been allocated for compensation in these three governorates).

Subscribe now

Why It Matters: This month’s obvious point of contention remains the routing of a quarter of farmers’ dues through Sham Cash, thereby extending a payment channel whose ownership and governance remain unclear into a new and large constituency. The application was adopted as a vehicle for public-sector salary payments in early 2025 without a publicly disclosed CBS license, if any. The matter, which escalated into a dispute over Sham Cash’s licensing and its approval for government use, was reportedly among the undisclosed factors behind the removal of Abdel Qader Husrieh as Central Bank governor in May and the appointment of Mohammed Safwat Raslan (a change covered in the May edition of this digest). Still, Sham Cash announced in July that it would align with newly-issued CBS requirements ahead of the issuance on August 18 of Decision 1124, adopting a national electronic payment and digital transformation system.

In practice, however, Sham Cash’s expansion to include the payment of farmers’ dues has led farmers to fear undisclosed deductions—despite Sham Cash capping withdrawal commissions at three per thousand (0.3%)—, especially as the AGC takes no fees. These fears may well be justified, as agents have reportedly been informally charging 1–2% per withdrawal. The fact that not all farmers may have Sham Cash accounts raises additional questions about how they will withdraw their dues. Finally, now that farmers are getting paid through Sham Cash, each expansion of the platform’s user base, first with public sector employees, enlarges a payments monopoly ahead of the regulatory framework meant to govern it, rather than after it.

Qamishli protest flyer calling for the expedited payment of dues owed to farmers for the wheat harvest (via Alexander McKeever (Twitter/X), read his publication on Northeast Syria).

It is also worth noting that the timing compounds a second squeeze. Farmers are being pushed toward electronic payment during the withdrawal of the old currency, as covered in the July edition, when physical notes are already scarce—and the circular itself cites the Central Bank’s lack of liquidity as the reason for the Sham Cash share.

The liquidity shortfall matters most because of when it falls in the agricultural year. Syrian winter wheat is sown from roughly November, with land preparation, seed, fertilizer, and fuel purchases concentrated in September and October. Farmers who deliver in June and receive their first installment in August, with the balance spread over four months, will be buying next season’s inputs before being paid for this year’s crop. Those who financed the 2026 crop on supplier credit face creditors who may want settlement in full rather than in installments and may not extend credit again. A plausible outcome is reduced planted area or a shift to cheaper, lower-yield practices in the same eastern governorates that produced this year’s recovery.

That points to a design problem rather than a one-off cash shortage. The state committed to buying an open-ended quantity at a fixed price without securing financing proportionate to a good harvest—the same announcement–delivery gap identified in the July edition, when the allocated new SYP 100 billion was already visibly short of the bill.

All of these challenges will be felt most acutely in the Northeast, which produces the most wheat, at a key political moment. Indeed, this is the first procurement season run under the integration agreement. While Damascus is effectively arguing that centralized administration produces better outcomes than the arrangements it replaced, the current challenges might shatter this claim. Farmers in those governorates protesting outside government buildings over unpaid dues make that argument harder to sustain.

Finally, the self-sufficiency claim is also a questionable objective to organize policy around. As set out in our standalone analysis, Syria produces more durum than its bread requirement absorbs and less soft wheat, which it has historically managed through trade—exporting the surplus at a premium and importing what it lacked. Rainfall did most of the work this year, and three-quarters of cultivated land remains rainfed in a country where drought years are becoming more frequent, not less.

The credibility cost is separate and avoidable, especially given that wheat arrived at Tartous on August 11, days after officials said no imports would be needed. The cargo may well relate to a pre-existing contract or to varieties outside the Grain Corporation’s purchases, but a headline declaration followed by visible imports invites the conclusion that the declaration was overstated.

Leave a comment

Continue Reading the August 2026 Syria Monthly Economic Digest

Explore Previous Editions

Browse every edition of the Syria Monthly Economic Digest, featuring monthly analysis of Syria’s political economy, governance, reconstruction, and regional developments.

→ Browse all editions

Never Miss an Issue

Receive the Syria Monthly Economic Digest, along with original research, expert interviews, and in-depth analysis on Syria’s political economy, governance, and reconstruction—delivered directly to your inbox.