This is not meant to be an exhaustive news roundup. The aim is to track the developments that reveal where the country is heading — from reconstruction and investment to banking, energy, public services, regional connectivity, and the evolving relationship between the state and society.

This month’s digest covers seven developments across four broad themes: exchange-rate volatility and the redenomination process; agriculture, wheat procurement, and rural livelihoods; protests and service pressures in northeast Syria; and Syria’s accelerating reintegration into regional transport, aviation, and energy networks.

You can read more about The Syria Dispatch and the purpose of this publication at the end of the post. If you have comments, corrections, or suggestions, you can also find my contact details there and reach out directly.

In this month’s edition:

• Exchange-Rate Volatility Tests Syria’s Redenomination Process

• Stronger Agricultural Harvest Prospects Meet Fuel, Storage, and Marketing Bottlenecks

• Qamishli Protests Erupt Over Fuel, Electricity, and Living Conditions

• Foreign Interest in Syria’s Oil and Gas Sector Accelerates

• Deir Ezzor Redevelopment Push Accelerates Across Transport, Oil, Water, and Electricity

• Türkiye, Saudi Arabia, Syria, and Jordan Advance Regional Transport Corridor Plans

• Air Connectivity Expands as Syria Eyes Return to European Routes

Exchange-Rate Volatility Tests Syria’s Redenomination Process

June opened with renewed pressure on Syrian households’ purchasing power, as the Syrian pound continued to weaken during the first half of the month before partially recovering in the final week, while markets rapidly absorbed the effects of recently approved salary increases.

The executive instructions for implementing Presidential Decrees No. 67 and No. 68 of 2026, which added 50 percent to fixed salaries and wages, had barely been issued before price increases began eroding the raise. The increases, which take effect in June 2026, were poised to be diluted by exchange-rate volatility and precautionary pricing. However, the pound’s late-June rebound means the final dollar value of salaries depends on the exchange-rate benchmark used.

As prices of basic food and non-food items rose by up to 25 percent following the pound’s decline, some traders priced goods against a precautionary exchange rate of around (old) SYP 16,000 (new SYP 160) to the dollar to hedge for future inflation. This behavior reflected a broader breakdown in price visibility and led to a widening gap between official and black-market rates (see chart below).

In the final week of June, however, the Central Bank took active steps to narrow the gap between the official and black-market rates. On June 25, it raised the official dollar rate to (new) SYP 118.5 for buying and 119.5 for selling, the third official devaluation in less than two months. On June 28, the official rate was raised again to (new) SYP 121.5–122.5, while the parallel-market rate reportedly stood at around (new) SYP 128. This reduced the official-parallel gap to around 4.9 percent, while the Central Bank narrowed the permitted exchange-rate margin from 9 percent to 3 percent.

Still, volatility coincided with continued uncertainty around the currency replacement process. On June 1, Central Bank Governor Mohammed Safwat Raslan said more than 63% (then 66% on June 10) of the nationwide currency replacement process had been completed, and announced a 30-day extension, from July 1 to July 31, as a final opportunity for holders of old banknotes to exchange them. He also instructed banks, exchange companies, and money-transfer firms not to reintroduce old notes into circulation and to provide customers with only the new Syrian pound for withdrawals, exchanges, and cash payments. Raslan later clarified that the end of the exchange period through banks and exchange companies would not cancel citizens’ right to hand in old notes and receive new ones during a five-year withdrawal period, under mechanisms to be announced later.

It should be noted that implementation remained uneven, especially in northeast Syria, where Hasakah had effectively been outside the normal currency-replacement cycle due to the closure of public banks and the absence of functioning financial institutions in parts of the governorate, particularly amid the continued administrative division between Damascus and the SDF. The Central Bank moved to address this gap: on June 23, it designated 11 currency-replacement centers in Hasakah Governorate through al-Haram and Osoul exchange and transfer companies, distributed across Hasakah, Qamishli, Darbasiyah, and Amuda, with nine reportedly ready to receive citizens and two still under preparation. Two days later, the Central Bank branch in Raqqa resumed official operations for the first time since 2013, offering services including currency replacement and wheat-payment processing.

At the policy level, Raslan used the first National Conference for Dialogue with the Private Sector in early June to signal a more coordinated approach. He said the Central Bank’s next phase would rely on institutional work and planning rather than “improvised or unilateral decisions,” while acknowledging that the widening gap between official and market exchange rates affects investment decisions, depositor behavior, confidence in the financial market, banking activity, and the investment climate. The Central Bank Governor also mentioned that a study to develop Islamic financial products is forthcoming. (On Islamic finance, READ here)

Why It Matters: The exchange-rate movement fed directly into prices, but the more important issue is not only depreciation. It is volatility. A currency that weakens sharply, partially rebounds, and changes several times within the same day still undermines pricing, wage expectations, and market confidence.

In a volatile exchange-rate environment, traders price not only according to current costs but also in anticipation of future depreciation. The use of precautionary exchange rates is therefore both a response to inflation and a driver of it. It protects traders from replacement-cost risk, but it also transmits expectations of further depreciation into current prices. In this sense, the problem is not only that the pound lost value in the first half of June. It is that no single exchange-rate anchor was credible enough to guide transactions, contracts, salaries, or inventories.

The Central Bank’s late-June adjustments therefore represent a move towards defensive stabilization after months of seeming apathy in the face of the depreciating pound. By raising the official rate and narrowing the permitted margin, the Central Bank reduced (at least for now) the gap with the parallel market. It limited the space for arbitrage, speculation, and multiple pricing references. These decisions should help reduce the official-market gap, stabilize expectations, and protect government revenues priced against the official exchange rate. Still, this remains exchange-rate management, not yet a full monetary policy framework.

The redenomination process compounds this problem because the exercise is going well beyond a purely technical one. It has become a test of administrative capacity and public trust. The repeated extensions suggest that implementation has been slower and more uneven than planned due to weak logistical capacity at Central Bank branches and commercial banks, the continued appearance of old cash holdings in the market, concerns over excluding poorer and rural households, and possible shortages or distribution problems affecting the new notes.

Such limitations are especially important in northeast Syria, where Hasakah’s delayed access to replacement services revealed the territorial and institutional limits of monetary policy. If some governorates have better access to banks, exchange companies, and replacement centers than others, the redenomination can create uneven monetary conditions inside the same national economy. This risks deepening cash-market fragmentation, encouraging informal brokers, and weakening confidence in the state’s ability to administer a national currency. The subsequent designation of 11 replacement centers in Hasakah and the reopening of the Central Bank branch in Raqqa are therefore important corrective steps. Still, they also underscore how closely monetary stabilization is tied to the reintegration of state institutions across the country… and hint that redenomination might have been premature for this reason, at least.

Raslan’s emphasis on coordination with ministries, institutions, and the private sector is analytically significant for this reason. It implicitly acknowledges that the Central Bank cannot stabilize the currency through announcements alone. Exchange-rate policy, redenomination, banking access, fiscal management, customs, imports, wheat payments, salary increases, and market regulation interact. If coordination remains weak, each measure risks undermining the next: wage increases feed prices, currency replacement creates uncertainty, exchange-rate gaps encourage arbitrage, and traders hedge against future instability.

Stronger Agricultural Harvest Prospects Meet Fuel, Storage, and Marketing Bottlenecks

Key Developments: Syria’s 2026 wheat season entered June significantly stronger than in previous years, supported by improved rainfall and better crop conditions across several key producing areas. In Hasakah, the Syrian Grain Establishment (SGE) expected to receive 800,000 to 1 million tons of wheat, while preliminary estimates put total Jazira production at around 1.1–1.2 million tons. Aleppo expected a much stronger season than last year, with projected wheat production of around 571,000 tons and some estimates suggesting output could exceed 600,000 tons. The SGE prepared 20 collection centers across the Hasakah Governorate and said existing wheat stocks of 400,000–500,000 tons were being transferred to other governorates to free storage capacity for the new harvest. By June 30, Hasakah farmers had delivered 480,000 tons of wheat to government procurement centers, with the harvest nearing completion and official estimates still indicating that total provincial production would exceed 1.025 million tons.

The stronger harvest is already affecting import planning. The SGE said available wheat stocks were sufficient to meet basic ration needs and maintain stable bread and flour supplies, and that wheat imports would be temporarily paused this season pending the final harvest outcome.

However, the stronger harvest did not automatically translate into improved livelihoods for farmers or rural workers. In Raqqa, the harvest season created jobs in harvesting, transport, bagging, and grain collection centers, but rising unemployment and a larger pool of available workers pushed wages down. Workers also said weak rainfed yields in parts of the governorate reduced earnings for those paid by the quantity harvested or bagged, while local observers warned that exchange-rate volatility could erode farmers’ income once payments were made. Concerns were also raised that a potentially large injection of Syrian pounds into the market could put pressure on the exchange rate, further eroding the value of earnings (see “Exchange-Rate Volatility Tests Syria’s Redenomination Process”).

Payment uncertainty also persisted. By June 13, farmers’ grain dues had not yet begun to be paid, as the authorities were waiting for the Central Bank to transfer the required funds. Payments were still expected to be made through the Agricultural Cooperative Bank, as in the previous season.

To ease procurement bottlenecks, the government launched new administrative tools. The Ministry of Agriculture launched an electronic platform for farmers wishing to market their crops, allowing them to register and reserve delivery slots. The platform triggered pushback, however. On June 16, farmers in Tell Tamr (Hasakah) staged a sit-in in front of the Agriculture Directorate, arguing that weak rural internet access, delayed appointments, and the difficulty of using digital tools could slow wheat delivery and increase costs during a time-sensitive harvest season. In Hasakah, officials later announced measures to reduce congestion at collection centers, including accepting loose wheat in open storage areas, opening additional sites as needed, allowing wheat to be transported to other governorates at government expense, and exempting wheat trucks from axle-load penalties for loads up to 25 percent above the legal limit.

By late June, the authorities had expanded the number of receiving centers in Hasakah to around 30 after opening ten additional centers, while daily intake reportedly reached around 70,000 tons nationwide, including about 30,000 tons per day in Hasakah alone. Four new payment points were also announced in Hasakah, Qamishli, al-Malikiyah, and al-Darbasiyah, starting in early July, to reduce farmers’ travel burden and speed up invoice payments.

Still, farmers continued to raise concerns about agricultural inputs, especially fertilizers, fuel allocations, and diesel for harvesters and tractors, in addition to the need to announce strategic crop prices before the planting season. Fuel shortages, especially, remained one of the most immediate threats to the season. In rural Qamishli and Hasakah, diesel shortages and prices of up to (old) SYP 20,000 per liter halted many harvesters, leaving wheat fields at risk of grain loss and fires before the crop could be collected. These pressures overlapped with wider fuel protests in Hasakah Governorate and earlier official promises to send subsidized diesel to support farmers during the harvest season. This recent wave of protests also followed a wave of farmer protests in May 2026.

Why It Matters: The stronger 2026 harvest is good news, but it remains far from recovery. Improved rainfall has improved output prospects, yet farmers still struggle with structural challenges. While rainfall can account for better yields, farmers still rely on debt, expensive inputs, and trader/broker arrangements that can leave them selling crops below market value. This situation has led to the paradox described earlier, in which Syria may produce more wheat, yet many farmers may not feel significantly better off, as the aforementioned challenges quickly erode the benefits of a stronger harvest.

It is also worth noting that the government’s response shows how agriculture remains one of the most interventionist parts of Syria’s recovery. Despite broader rhetoric around liberalization, private investment, and a larger role for the market (recently toned down, however), Damascus remains deeply involved in wheat procurement, collection centers, payment channels, fuel allocations, crop pricing, marketing platforms, and now plans to establish an agricultural holding company. This is not surprising. Agriculture is tied to food security, rural employment, exports, and social stability, and the state cannot easily step back from a sector on which much of the country still depends. According to Agriculture Minister Basil al-Suwaidan, around 30 percent of Syria’s population relies, directly or indirectly, on agriculture for income and employment.

Still, the calculus is not necessarily a bad one, quite the contrary. Prioritizing agriculture, especially given Syria’s productive potential, could help ease several macroeconomic pressures at once. Wheat import requirements for the 2025/26 marketing year were forecast at around 3 million tons, nearly 70 percent above the five-year average, following two weak domestic production seasons. At recent global wheat prices of roughly USD 220 per ton, this implies an import bill in the high hundreds of millions of dollars. Reducing that bill through increased local production would not only support food security but also ease pressure on foreign-currency demand, the trade deficit, and, ultimately, the Syrian pound.

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Qamishli Protests Erupt Over Fuel, Electricity, and Living Conditions

Key Developments: Qamishli witnessed a continuous wave of protests in late June that began with a retirees’ mobilization over delayed pensions and expanded into broader demonstrations over fuel prices, electricity shortages, public services, and deteriorating living conditions.

On June 20, dozens of retirees held a sit-in in front of the Social Insurance branch, demanding the payment of delayed pensions and faster processing of their files. The action was organized by the newly formed Retirees’ Solidarity Gathering (تجمع تكاتف المتقاعدين). The organization later announced its formal establishment, describing itself as an independent civic initiative open to all retirees in Hasakah Governorate, focused on addressing pension delays and low pension amounts, improving the work of the local Social Insurance branch, and demanding a dedicated health insurance law for retirees. Some retirees reported they had not received pensions for around a year, while others reported delays ranging from several months to a year and a half.

The following day, a new wave of protests was sparked after fuel prices rose and service allocations were reduced. On June 21, residents and shop owners blocked roads and burned tires in central Qamishli after diesel prices reportedly rose from 55 to 75 cents per liter. Fuel allocations for bakeries, generators, and transport were also cut by more than half, forcing many private generators to reduce hours or stop operating during a period of high summer temperatures. Protesters demanded lower fuel prices, a more stable electricity supply, improved public services, and action to contain the rising costs of bread, transport, and basic goods. The protests continued into a second and third day, expanding beyond fuel alone. On June 23, protesters continued to call for basic living needs to be secured, prices to be brought under control, and services to be improved and later chanting slogans such as “the people want better living conditions,” “protest against poverty and hunger,” “we will continue until prices are reduced,” and “our daily demands are bread, peace, and freedom.”

These protests were part of a broader pattern of growing popular anger in the Hasakah Governorate. More than 40 protest events were recorded across Hasakah Governorate between June 1 and June 28 alone. The demands varied, but most centered on delayed salaries and pensions, fuel and electricity shortages, rising prices, unemployment, poor services, and the release of detainees (see table below).

Earlier in the month, the authorities had already moved to contain similar fuel-related unrest in rural Hasakah. On June 10, Deputy Governor Ahmad al-Hilali said one million liters of subsidized diesel would be sent to the governorate, with priority given to the agricultural sector during the harvest season. Hilali also linked the accumulated service challenges to the ongoing process of completing institutional integration and fully reactivating state directorates in Hasakah.

Earlier protests in al-Hol, al-Shaddadi, Tell Brak, and Ghazila had already focused on the contradiction between Hasakah’s oil resources and its shortages of fuel, water, electricity, and jobs. In several areas, residents blocked roads used by oil tankers, arguing that local communities remained underserved despite the daily movement of fuel and oil through the governorate.

This contradiction also shaped the language of the Qamishli protest movement. In a statement read on behalf of protesters on June 25, participants described the Jazira as one of Syria’s richest regions in resources but among the poorest in services, framing their demands around cheap and clean bread, electricity, drinking water, security, and an end to corruption and the extraction of local wealth. The statement also rejected narrow party agendas, presenting the mobilization as a broader social and livelihood protest.

Back to fuel, the supply shock quickly spread to transport, agriculture, and daily commerce. The regular Qamishli-Damascus bus fare rose from (old) SYP 135,000 to 290,000, while business-class bus fares increased from (old) SYP 185,000 to 400,000, and the price of the Qamishli-Hasakah route also doubled. Subsidized transport gasoline rose from (old) SYP 450 (USD 0.03)* to USD 0.55, prompting taxi and internal transport drivers to protest in front of the fuel committee (Sadcop) on June 23 and demand that the decision be reversed. The crisis also affected the wheat harvest, with fuel shortages and diesel prices of up to (old) SYP 20,000 (USD 0.7) per liter halting many harvesters in rural Qamishli and Hasakah, raising fears of crop losses and field fires.

^{(*Edited on July 3, 2026, to correct the dollar conversion of old SYP 450 from USD 0.30 to USD 0.03.)}

The protests prompted at least a limited policy response. On June 23, Energy Minister Mohammad al-Bashir issued Decision No. 822 of 2026 forming a permanent committee to determine prices for petroleum products and mineral resources. The committee includes representatives from the Energy Ministry, Finance Ministry, Economy and Industry Ministry, Central Bank, and relevant oil and mineral-resource bodies, and is tasked with reviewing petroleum prices in light of global prices, costs, the exchange rate, subsidy mechanisms, and other indicators.

On June 27, the committee held an extraordinary meeting to review pricing, supply costs, operating costs, and local and global market conditions, and raised new recommendations to the Energy Ministry. It also recommended adopting the Syrian pound as the sole currency for pricing petroleum products, a step presented as an effort to unify pricing mechanisms and strengthen the use of the national currency in the fuel sector. Later that day, the Energy Ministry approved fuel-price reductions ranging from more than 14 to 20 percent: 95-octane gasoline was cut by 20.39 percent to (new) SYP 130 per liter, 90-octane gasoline by 19.97 percent to (new) SYP 125, diesel by 14.37 percent to (new) SYP 107, domestic gas cylinders by 15.49 percent to (new) SYP 1,500, and industrial gas cylinders by 15.49 percent to (new) SYP 2,400.

Why It Matters: Beyond the immediate backlash against the fuel-price increase, the Qamishli protests represent another stress test of the state’s attempt to reintegrate northeast Syria administratively, fiscally, and economically. Fuel was the immediate trigger, but the chronology of the protests points to a broader accumulation of grievances: delayed pensions and salaries, weak services, electricity cuts, wheat-marketing problems, unemployment, detainee files, and unclear institutional responsibility. In this sense, this month of protests encapsulates the terms on which Hasakah Governorate is being brought back into the national system.

While protest movements have emerged across the country, the Hasakah Governorate is especially sensitive because the northeast is moving from years of Autonomous Administration and SDF-linked governance toward a difficult handover to Damascus. The fuel issue illustrates the tension clearly: Damascus may be trying to unify prices, reduce distortions, and regularize supply, but residents experience this as the loss or weakening of previous support systems before reliable Damascus-based state services have arrived. In an area where generators substitute for public electricity, transport depends heavily on fuel availability, and many salaries or pensions are delayed, fuel pricing is not a narrow technical matter.

The protests also carried a strong distributive message linked to historic grievances. Hasakah is one of Syria’s most resource-rich governorates, yet residents repeatedly contrasted the movement of oil and fuel through the governorate with shortages of electricity, water, jobs, and basic services. Stability in the northeast will require significant support for and development of this region (see “Deir Ezzor Redevelopment Push Accelerates Across Transport, Oil, Water, and Electricity”).

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Foreign Interest in Syria’s Oil and Gas Sector Accelerates

Key Developments: On June 10, Energy Minister Mohammad al-Bashir used the Global Energy Forum in Washington to present Syria as a potential regional energy hub linking the Gulf, Iraq, and the Eastern Mediterranean to regional and international markets. He cited cooperation with Chevron, ConocoPhillips, GE Vernova, and HKN Energy, as well as partnerships with TotalEnergies, Siemens, and Ansaldo Energia, and said that advanced discussions were also underway with Eni and other companies.

On June 16, the Syrian Petroleum Company signed a contract with ConocoPhillips and Novaterra to develop several gas fields and increase production from existing fields, with the stated aim of supporting the electricity sector and other vital sectors. The contract followed an earlier memorandum of understanding signed in November 2025 and was presented by Energy Minister Mohammad al-Bashir as a step toward raising domestic gas production, improving operational efficiency, and restoring confidence in Syria’s energy investment environment. Syria will receive a 56 percent share under the contract, with the two investing companies receiving 44 percent. The deal could increase daily gas output by around 4–5 million cubic meters within a year.

The same day, the SPC denied reports that Australia’s AXP Energy had entered Syria’s oil and gas sector or signed an agreement with the company. The denial followed AXP’s announcement that it had secured the right to earn up to 25 percent in an onshore Block 9 production-sharing contract in the Palmyra Basin through a farm-in arrangement. SPC said all official agreements and partnerships would be announced exclusively through its own channels and in accordance with the relevant legal and institutional frameworks.

Foreign interest also moved toward formal bidding. On June 18, SPC said it planned to launch an international bid round for four oil fields in Deir Ezzor in Mahash, Akissyah, East Khrata, and Qusaibeh, grouped as the “MAKK Area” (northwest of Shell’s former al-Furat Petroleum Company), with commercial bids due by July 19.

Offshore and midstream discussions also advanced. On June 23, SPC CEO Youssef Qiblawy met with a Chevron delegation to discuss converting the existing memorandum of understanding on offshore exploration in Block 1 into an executive contract. The meeting also covered the possibility of Chevron’s participation as a strategic partner in reviving the Kirkuk-Baniyas crude oil pipeline. On the same day, SPC discussed cooperation with UAE-based ENOC and Horizon Terminals to rehabilitate and develop pipelines and oil terminals.

Why It Matters: The June announcements further indicate that Syria’s energy sector is moving in a positive direction. Foreign companies are now beginning to move toward contracts, bid rounds, and more concrete discussions over upstream, offshore, and midstream assets.

Still, the announcements should be treated carefully. Signing a contract is not the same as implementation, and Syria’s oil and gas sector remains challenging: infrastructure is damaged, security risks persist, sanctions and compliance concerns have not entirely disappeared, banking channels remain weak, and the legal status of some legacy concessions remains unclear. The AXP Energy episode illustrates another issue: transparency, or the lack thereof. It raised basic questions about who owns what and how the new authorities will treat contracts or concessions originating under the Assad era. SPC’s denial was useful, but it also showed the need for clearer public rules on approval, disclosure, and contract validity.

There is also a governance issue. Oil and gas contracts concern strategic national assets, and attracting foreign companies may require generous fiscal terms, especially given Syria’s political, technical, and security risks. That may be understandable in the short term, but it increases the need for transparency and institutional oversight. Syria does not need to publish every commercial detail, but major energy contracts should be subject to some form of public or parliamentary scrutiny, clear procurement procedures, and reporting on revenue-sharing, investment obligations, production targets, environmental safeguards, and local employment. With these types of contracts, the issue is not simply who is in charge — whether a public, private, local, or foreign actor — but what terms were set. (Read: Syria Needs More Electricity. Does It Matter Who Builds It?). In that context, having international bidding rounds for various blocks and fields is a step in the right direction.

The local dimension will be just as important. Many of the assets under discussion are in or near eastern Syria, where communities have long viewed the oil and gas sector as extractive: resources leave the region while services, jobs, electricity, fuel, and water remain inadequate. The recent protests in Hasakah, including the blocking of oil trucks, show that this grievance remains politically salient (see this month’s entry on the Qamishli and Hasakah protests). Recent protests related to the closure of makeshift refineries are another wake-up call for the government not to overlook local populations. Reviving production in Deir Ezzor, Hasakah, or central Syria could support local recovery if it creates jobs, repairs infrastructure, and channels visible benefits back into producing regions. If not, energy investment could deepen social tensions… and those tensions are themselves bad for business. Recent moves by SPC to hire local workers, reinstate previously dismissed employees, and relocate parts of the upstream administration closer to Deir Ezzor suggest that the authorities have understood this risk. The same applies to the government’s wider emphasis on developing the eastern governorates.

Deir Ezzor Redevelopment Push Accelerates Across Transport, Oil, Water, and Electricity

Key Developments: Deir Ezzor saw a cluster of redevelopment announcements in June, focused on reconnecting the governorate, restoring basic services, and relocating parts of the oil-sector administration closer to production sites.

In transport infrastructure, Omar al-Hosari, head of the General Authority of Civil Aviation and Air Transport, said Deir Ezzor International Airport had entered the final stages of rehabilitation ahead of its reopening, with technical and operational readiness under review. The Ministry of Public Works and Housing also launched the reconstruction of al-Siyasiya Bridge, a key Euphrates crossing linking Deir Ezzor city with the northern countryside, with a planned implementation period of 12 months. The bridge’s destruction had forced residents to rely on ferries and temporary crossings, while recent flooding of the Euphrates further damaged makeshift routes.

The bridge project formed part of a wider transport rehabilitation package. On June 7, the Ministry of Transport discussed a plan worth more than USD 37 million to repair roads and bridges in Deir Ezzor, including USD 6.7 million for maintenance on the Deir Ezzor–Mayadin–Bukamal, Deir Ezzor–Hasakah, and Deir Ezzor–Raqqa axes, and around USD 30.5 million for strategic bridge and road projects. The package also includes the proposed Damascus–Palmyra–Deir Ezzor road, while the Finance Minister proposed building two new bridges in Deir Ezzor and Raqqa under modern engineering standards.

In oil and gas, the Syrian Petroleum Company reportedly decided to relocate a large part of the upstream exploration and production sector to Deir Ezzor, including a two-month deadline to move the main exploration and production center, rehabilitate administrative and logistical facilities, and base more engineers and technicians near the fields. The company also announced the hiring of 555 people from Deir Ezzor, including 400 security personnel, 70 engineers and technicians, and 85 field and support workers, as well as the reinstatement of 200 previously dismissed employees. Contractors were also instructed to prioritize local hiring.

READ: Protests Erupt over Closure of Makeshift Oil Refineries in Aleppo

Basic-service repairs and flood recovery continued in parallel. The Ministry of Energy carried out maintenance on the Euphrates water-conveyance project toward al-Sour, including concrete repairs to damaged sections of the channel, to sustain water delivery to nearby villages. On June 23, Deir Ezzor’s emergency response committee also formed a specialized committee to assess and compensate for damage from the recent rise in Euphrates water levels. The affected agricultural area was later reported at 22,678 dunums, up from an earlier estimate of 21,853 dunums, while 83 water stations had previously gone out of service. Electricity repairs also advanced, with the General Electricity Company announcing the rehabilitation of the 230 kV al-Taym transformer station, serving Deir Ezzor and the wider eastern region.

Why It Matters: Deir Ezzor has long sat at the center of Syria’s oil, gas, agriculture, and cross-border trade routes, but residents have often experienced that position less as an advantage than as a form of extraction. The governorate generated strategic resources while receiving limited local development, weak services, poor infrastructure, and few durable economic returns. The latest redevelopment announcements should therefore be read against this background: they respond to one of eastern Syria’s oldest grievances, namely the gap between Deir Ezzor’s national importance and the conditions in which many of its residents live.

The oil-sector decisions are especially noteworthy. Relocating part of the upstream administration and technical staff closer to Deir Ezzor’s fields would partially reverse a long-standing pattern in which the governorate hosted the resources while decision-making remained concentrated elsewhere. If implemented, this could localize jobs, improve technical oversight, and make the province feel less like a peripheral extraction zone. SPC’s decision also speaks to a sensitive social file, especially after earlier protests over the closure of informal refineries and the livelihoods tied to the local oil economy.

Beyond the oil sector, projects open for investment on the Syrian Investment Agency’s (SIA) website (see table below) point in the same direction, presenting Deir Ezzor not only as an oil province but as a broader redevelopment frontier. The listed opportunities span agriculture, livestock, hospitals, logistics, rail, energy, airport services, real estate, agro-industry, and mineral resources, with a headline value above USD 6 billion as of late June 2026. Still, the list is analytically useful because it shows the government trying to recast Deir Ezzor from an extraction zone into a recovery corridor linking oil, agriculture, services, industry, and trade with Iraq.

Overall, redevelopment in Deir Ezzor cannot be separated from reintegration and stabilization. Repairing bridges, restoring water and electricity, reopening the airport, compensating flood-affected farmers, and offering credible employment in the oil sector are all part of rebuilding state legitimacy in a region long associated with neglect, extraction, ISIS rule, SDF control, displacement, and fragmented authority. Moreover, if these projects improve daily life, they could reduce the appeal of armed groups, smuggling networks, and informal economies. If they remain symbolic or are captured by contractors and central institutions, they could reinforce the same resentment they are meant to address.

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Türkiye, Saudi Arabia, Syria, and Jordan Advance Regional Transport Corridor Plans

Key Developments: Türkiye and Saudi Arabia moved to advance plans for a regional railway and logistics corridor linking Türkiye to the Gulf through Syria and Jordan. On June 9, Turkish Transport and Infrastructure Minister Abdulkadir Uraloğlu and Saudi Transport Minister Saleh bin Nasser al-Jasser signed two memoranda of understanding on logistics services and railway cooperation, covering logistics centers, infrastructure, technology, training, and technical exchange.

Uraloğlu said Türkiye and Saudi Arabia aim to build a railway linking the two countries through Jordan and Syria within three to four years, with other Gulf states potentially joining later. He said the Saudi route to the Jordanian border is already complete, while Türkiye has completed links from Islahiye to Kilis and Gaziantep near the Syrian border. The remaining gap is around 400 km between Syria and Jordan. He also said the plan includes around USD 100 million to rebuild the rail route between Türkiye and Aleppo, creating a direct link to Damascus.

The agreement builds on earlier Syria–Jordan–Türkiye transport talks. In April, the three countries signed a trilateral memorandum in Amman to develop road, maritime, and rail connectivity, simplify border procedures, and coordinate transit movement. The new Saudi-Turkish track gives the project a broader regional frame, linking it more directly to Gulf markets and to the possible revival of north-south rail connectivity through Syria.

The railway talks coincided with a broader push for Syria–Türkiye economic integration. At the Anadolu City Economies Summit in Gaziantep, Turkish Trade Minister Ömer Bolat said bilateral trade is expected to reach USD 5 billion within two years and USD 10 billion by the early 2030s. Turkish officials also said they were ready to open the Islahiye customs gate and the Nusaybin-Qamishli crossing, while Turkish banks had reportedly reached an agreement to open branches in Syria pending central bank talks.

Why It Matters: Better rail and logistics integration with Türkiye and the Gulf would be positive for Syria in principle. In theory and in practice, lower transport costs, faster border crossings, and more reliable corridors should support trade, reconstruction supply chains, exports, and Syria’s broader ambition to become useful again as a transit country. The Saudi-Turkish framing is important because it moves the project beyond bilateral Syria–Türkiye connectivity and places Syria inside a wider north-south corridor linking Europe, Türkiye, Jordan, Saudi Arabia, and potentially other Gulf markets. This gives the proposal a stronger regional anchor and greater credibility.

But the railway plan still has many moving parts. A Syria–Türkiye rail link is probably the easier piece, especially if the priority is to rehabilitate the line toward Aleppo and reconnect it to Damascus. The harder part is the southern connection through Jordan. One of the many technical challenges is that the historic Hejaz line was built on a 1,050 mm narrow gauge, while Türkiye’s main network and most of Syria’s later railways use the 1,435 mm standard gauge. This means a modern freight corridor cannot simply be “revived” as a heritage route, but would require decisions on reconstruction standards, gauge conversion, transshipment points, rolling stock, financing, border procedures, and operating rights.

The corridor also has a political economy problem. Integration with Türkiye can help Syria restore trade, banking links, industrial inputs, and reconstruction supply chains, but it also risks reinforcing an already imbalanced trade relationship. Turkish exports to Syria reached about USD 3.5 billion in 2025, while Syrian exports to Türkiye fell to around USD 235 million. Syrian producers and economists have already warned that cheaper Turkish goods are putting pressure on local manufacturers and the trade balance. Better logistics could therefore lower costs for consumers and traders, but also intensify competition for Syrian industry if not paired with a clearer industrial policy.

Air Connectivity Expands as Syria Eyes Return to European Routes

Key Developments: Syria’s air connectivity continued to expand with several European routes announced or under negotiation. On June 25, Syrian Arab Airlines said it would launch direct Damascus-Amsterdam flights on July 2, marking its first return to Western European operations since EU measures introduced in October 2012 barred it from EU airports and from EU individuals and entities working with the carrier. The Syrian Aviation Holding Company said the route followed technical, legal, and diplomatic work aimed at restoring the national carrier’s European presence, while Omar al-Hosari, head of the General Authority of Civil Aviation and Air Transport, described Amsterdam as the first step in a broader expansion plan.

However, the operational structure of the route appears more complex than the initial announcement suggested. Dutch aviation media reported that tickets had gone on sale for Amsterdam-Damascus flights under Syrian Airlines flight numbers, with services scheduled on Mondays, Thursdays, and Saturdays. Schiphol Airport’s own flight information page listed flight RB271 from Amsterdam to Damascus, while the aircraft details for the July 2 flight showed an Airbus A320 registered LY-MAU. Flight-tracking and fleet data identify LY-MAU as an Airbus A320 operated by Lithuania’s Heston Airlines, an EU-based aircraft, crew, maintenance and insurance (ACMI) and charter carrier. This suggests that the route is being marketed under Syrian Airlines’ RB flight numbers but operated by Heston Airlines’ aircraft, rather than by Syrian Airlines’ own fleet.

Germany could follow the Netherlands, although approvals remain pending. Reports that Sundair planned to begin twice-weekly Berlin-Damascus flights from August 1 prompted the Syrian Civil Aviation and Air Transport Authority to clarify that no final operational approval had yet been granted. The authority said the route still depends on regulatory and operational approvals from the German side, as well as the completion of technical procedures, while Hosari said a final German decision was expected in the first half of July.

Aleppo also gained a new European connection. On June 19, Romania’s Dan Air announced it would begin direct scheduled flights from Bucharest to Aleppo starting July 1, adding to its existing Bucharest-Damascus service. Dan Air said it had carried more than 30,000 passengers between Bucharest and Damascus during its first year of operations in Syria, with an average load factor of 88 percent, and that it would become the only EU carrier operating scheduled flights to both Damascus and Aleppo.

These route announcements come amid a broader rebound in the use of Syrian airspace. Some 11,801 flights crossed Syrian airspace in May, more than double February’s level and around 375 percent higher than in May 2025, as regional airlines rerouted around disrupted airspace elsewhere in the Middle East.

Why It Matters: The Amsterdam route remains symbolically important, but its operational structure should be interpreted with caution. Operations by Heston Airlines under an ACMI or wet-lease-style arrangement do not necessarily mean that Syrian Airlines itself has regained full operational access to the EU market.

This distinction matters for regulatory reasons. Under EASA rules, any third-country operator intending to conduct commercial air transport into, within, or out of the EU and EFTA area must hold a Third Country Operator (TCO) authorization. EASA confirmed with The Syria Dispatch on June 26 that, as of that date, no Syrian operator held such an authorization. It also clarified that one-off notification flights are limited to humanitarian or ambulance flights in the public interest and cannot be used as a workaround for regular commercial service. As of July 2, 2026, no Syrian air carrier appears among the TCO-licensed carriers. An EU carrier such as Heston does not face that same TCO requirement when operating under its own European approvals, although the route would still require the relevant national permits, Syrian approvals, airport procedures, insurance, and security arrangements.

The Heston structure therefore makes the Amsterdam route more plausible but provides less definitive evidence of Syrian Airlines’ full return to Europe as an operator. It is closer to a commercial and diplomatic reopening than a complete regulatory normalization of Syrian civil aviation. Still, the arrangement also shows how Syria’s aviation reintegration may proceed in stages. European carriers, charter operators, and ACMI providers can reconnect Syrian airports to Europe before Syrian operators themselves clear all safety, regulatory, and insurance hurdles. That could help meet immediate demand from the Syrian diaspora, family travelers, business visitors, and possibly return-related travel, while buying time for Syrian aviation authorities and airlines to rebuild compliance capacity.

Still, the risks have not disappeared. European countries can, however, impose national restrictions, something which appears to be the current impediment to Sundair’s Berlin-Damascus route. Added to this is EASA’s wider conflict-zone guidance, which may further restrain flights to Syria. Indeed, EASA’s Syria conflict-zone bulletin, revised on May 12 and valid until October 31, continues to advise operators not to use Syrian airspace because of military activity, fragmented airspace control, air-defense risks, Israeli strikes, drones, rockets, and MANPADS.

Such guidance may also affect insurance costs. While Syria-specific premium data are not publicly available, war-risk coverage has become more expensive for some Middle East operations, and insurers are likely to approach Syria with caution given the security environment, residual compliance risks, and airport security concerns.

Demand is unlikely to be the main obstacle. Direct flights would serve Syria’s large diaspora in Europe, facilitate family travel and business links, and potentially support voluntary refugee returns, a priority for several European governments. This gives the Amsterdam route political significance, especially after the June 24 Dutch visit to Damascus, where migration, reconstruction, and refugee returns were reportedly discussed.

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 selects the developments I consider most significant 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 developments, banking and monetary reforms, trade and reconstruction dynamics, property rights disputes, public service issues, and the evolving relationship among the Syrian state, society, and external actors.

The format is simple: each entry begins with a news summary explaining what happened, followed by a “Why It Matters” section offering additional information, context, and analysis.

The digest is written for readers who want a structured, analytical overview of Syria’s transition: policymakers, researchers, journalists, diplomats, development practitioners, investors, civil society actors, and anyone trying to follow the country’s economic and political trajectory.

It is not intended to be exhaustive, and it does not replace daily news monitoring. Instead, it offers a monthly snapshot of the issues I believe deserve closer attention.

For comments, corrections, suggestions, or collaboration inquiries, please feel free to reach out.

This is not meant to be an exhaustive news roundup. The aim is to track the developments that reveal where the country is heading — from reconstruction and investment to banking, energy, public services, property rights, and the evolving relationship between the state and society.

This month’s digest covers nine developments across four broad themes: Syria’s external re-engagement with Europe and the Gulf; energy, electricity, and regional connectivity; financial and banking reform; and the domestic social tensions emerging around wheat procurement, makeshift oil refineries, and Decree 66-linked reconstruction projects.

You can read more about The Syria Dispatch and the purpose of this publication at the end of the post. If you have comments, corrections, or suggestions, you can also find my contact details there and reach out directly.

Syria’s External Re-Entry: Diplomacy, Gulf Capital, and Strategic Positioning

Business Delegation Signals UAE Investment Push as Alabbar Floats Multi-Billion-Dollar Projects

Key Developments: Syria–UAE economic engagement accelerated in May with the first Syrian–Emirati Investment Forum in Damascus and a high-level UAE business delegation led by UAE Minister of Foreign Trade Thani al-Zeyoudi. The delegation met President Ahmad al-Sharaa and included more than 120 Emirati companies and institutions. The visit coincided with renewed Emirati interest in Syria following an earlier visit by Emaar Properties founder Mohamed Alabbar, who said he was assessing investments worth up to USD 18 billion, including USD 5–7 billion on the Syrian coast and up to USD 11 billion in Damascus and its surroundings. It was also reported that Alabbar-linked Eagle Hills is studying two much larger master-planned projects in Dummar and Latakia, with a combined development cost exceeding USD 50 billion, though the projects remain in the early stages of discussion.

While Syrian officials used the forum to promote investment incentives and regulatory reforms, some Emirati investors raised concerns over exchange-rate stability, banking and transfer mechanisms, sovereign guarantees, and the need for clearer regulatory frameworks. Despite the scale of the projects discussed, no signed investment agreements or memoranda of understanding were publicly announced, although it was reported that the two sides had reached preliminary agreements on several investment tracks.

UAE Foreign Trade Minister Al-Zeyoudi said bilateral non-oil trade reached USD 1.4 billion in 2025, up more than 130% year-on-year, while discussions focused on industry, agriculture, renewable energy, logistics, the digital economy, tourism, aviation, and private-sector partnerships. Separately, the UAE announced support for the restoration of the Umayyad Mosque in Damascus, adding a cultural dimension to renewed bilateral engagement.

Why It Matters: The Syria–UAE forum marks a genuine Emirati rapprochement, but one likely to remain cautious, transactional, and step-by-step. Abu Dhabi moved more slowly than Qatar and Saudi Arabia after Assad’s fall, partly because of its long-standing hostility to Islamist movements, its unease with HTS’s links to Türkiye and Qatar, and its previous rapprochement with the Assad regime. The UAE is therefore not simply “returning” to Syria; it is testing the new authorities through trade, investment, heritage diplomacy, and high-level business channels. Sharaa’s visit to Abu Dhabi earlier in April and his public solidarity with the UAE helped accelerate this opening, while the UAE officials also publicly noted Syria’s support. Still, the relationship carries a trust deficit on both sides.

The visit also needs to be read through the lens of Gulf competition. Both Qatar and Saudi Arabia are much better positioned in Syria, and the UAE does not want the post-Assad transition to become an arena shaped only by these players, including Turkiye. Abu Dhabi wants a stake in the emerging economic order, especially in real estate, ports, logistics, aviation, tourism, digital services, and urban development. But the large figures attached to Alabbar and Eagle Hills should be treated as positioning rather than implementation, especially given the difficulties most prospective investors face in moving from signing to implementation of their investments.

The Israel angle is also important, though it should not be reduced to a formal precondition for normalization. The UAE may continue to engage Syria without waiting for a Syria–Israel agreement, but Abu Dhabi could also serve as an additional channel for indirect contact between the two sides. It was previously reported that the UAE had facilitated secret indirect talks between Syria and Israel. From an investment perspective, it is difficult to imagine large-scale Emirati capital flowing into Syria while the risk of Israeli escalation remains high, or while Israel may view Emirati investment as strengthening a state it still treats as an adversary. A formal Syria–Israel normalization deal may not be required, but some form of security understanding, de-escalation mechanism, or tacit Israeli acceptance would likely be more conducive to UAE–Syria rapprochement and investment.

EU–Syria Dialogue Marks Shift from Isolation to Structured Re-Engagement

Key Developments: On May 11, Syria and the EU held their first High-Level Political Dialogue in Brussels, co-chaired by Syrian Foreign Minister Asaad al-Shaibani and EU High Representative Kaja Kallas. The meeting focused on EU–Syria relations, regional stability, Syria’s inclusive political transition, socio-economic recovery, and reconstruction. It took place alongside the Syria Partnership Coordination Forum, co-chaired by al-Shaibani and EU Commissioner for the Mediterranean Dubravka Šuica, with EU Member States, G7 countries, Arab states, the UN, and major financial institutions in attendance.

The EU announced work on a EUR 15 million Technical Assistance Hub to support Syrian institutions, a EUR 14 million contribution to rehabilitate Al-Rastan Hospital in Homs, and preparations for the additional EUR 280 million in socio-economic support for 2026–2027. The dialogue also coincided with a major legal step: the EU Council restored the full application of the 1977 EU–Syria Cooperation Agreement, ending the partial suspension imposed in 2011 and reopening the agreement’s trade and economic-cooperation framework.

The month also showed that Syria’s re-engagement with Europe is expanding beyond Brussels. Syrian President Ahmad Al-Sharaa had joined a European Council summit with regional partners in Cyprus in late April, where discussions focused on the Middle East, the EU’s southern neighborhood, and regional security. Sources say he used the meeting to present plans for Syria to become a regional transit and energy corridor, an argument Damascus is expected to repeat in upcoming G7 discussions, which Syria will attend as a guest nation.

At the same time, the EU maintained its conditional approach. Syrian activists and MEPs urged Brussels to link deeper engagement to human rights, accountability, minority protection, and an inclusive transition. On May 25, the EU Delegation to Syria also published its updated Roadmap for Engagement with Civil Society, stressing the need for adaptive and sustained support to Syrian civil society, which it described as central to community resilience, advocacy, dialogue, and participation. Separately, the EU renewed targeted sanctions against individuals and entities linked to the former Assad regime until June 1, 2027, while delisting seven entities, including the Ministries of Defense and Interior.

Why It Matters: The High-Level Political Dialogue confirms that EU policy toward Syria is moving from containment to structured re-engagement, but not to unconditional normalization. Restoring the Cooperation Agreement and launching formal political dialogue reopen channels that had largely collapsed after 2011. Yet the renewal of targeted sanctions and the publication of the civil society roadmap show that Brussels still wants engagement to remain tied to inclusion, accountability, and institutional reform.

For Damascus, the stakes are practical. Europe offers technical assistance, reconstruction financing, trade normalization, regulatory support, and political legitimacy. Syria is also trying to reposition itself not only as a recovery file, but as a strategic connector between the Gulf, Iraq, Turkey, the Mediterranean, and Europe. The transit-hub argument is useful because it gives European governments a reason to see Syria as part of their energy, logistics, and supply-chain calculations, not only as a source of refugees or instability. But it remains more a strategic pitch than a delivered reality: pipelines, ports, borders, electricity links, customs systems, security guarantees, and financing all still need to be made functional.

For the EU, Syria is now tied to migration management, refugee returns, counterterrorism, regional stability, energy security, and influence in the Eastern Mediterranean. This gives Damascus leverage, but also puts it under assessment. The coming test is whether both sides can move from political signaling to operational cooperation: credible institutions on the Syrian side, usable instruments on the EU side, and enough delivery on services, infrastructure, civil society participation, and economic governance to make re-engagement visible beyond diplomatic meetings.

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Energy and Connectivity: From Resource Recovery to Transit Ambitions

Offshore Exploration Deals and Iraqi Oil Transit Seek to Revive Syria’s Energy Sector

Key Developments: On May 11, Syria identified an offshore block for its first deep-water oil and gas exploration project with Chevron and Qatar’s UCC Holding, paving the way for final contracts and technical operations to begin in the summer. One day later, the Syrian Petroleum Company signed a memorandum of understanding with ConocoPhillips, TotalEnergies, and QatarEnergy to conduct technical studies, prepare a work program, and draft an exploration contract for offshore oil and gas exploration in Block 3 near Latakia. Separately, INA Croatia and MOL Group (Hungary) held talks with Syrian counterparts over a possible restart of projects suspended since 2012.

Onshore, the Syrian Petroleum Company continued efforts to restore production in eastern Syria. In Deir Ezzor, SPC restarted wells 110 and 116 at the al-Tanak field, adding around 800 barrels per day to the current output. The company said al-Tanak had produced 50,000–60,000 barrels per day before 2011, but that 90–95% of its infrastructure had been damaged, leaving current production at around 3,000–5,000 barrels per day. Still, amid constrained oil supplies, it was reported that Russia had become Syria’s dominant crude supplier after Assad’s fall, with shipments rising by 75% to around 60,000 barrels per day in 2026.

Iraqi oil also became an increasingly important part of Syria’s energy and transit picture. Iraq sent its first crude shipment to Syria through the reopened Rabia–al-Yarubiyah crossing in early May, with an initial 70 tanker trucks, while the Syrian Petroleum Company raised daily unloading capacity for Iraqi oil at Baniyas refinery to around 500 tankers, up from 300. Iraq’s Oil Ministry also discussed opening an Iraqi shipping office at Baniyas port and reviving the Iraqi–Syrian oil pipeline, while Baghdad separately announced plans for a 700-kilometre Basra–Haditha pipeline with a planned capacity of 2.5 million barrels per day and possible export routes toward Baniyas, Ceyhan, and Aqaba. At the same time, SPC said recent increases in domestic petroleum-product prices were driven by higher supply, transport, production, storage, maintenance, insurance, and global fuel costs, and were intended to maintain stable distribution across governorates.

Why it Matters: The return of the main eastern oil fields to government control is economically significant, but it should not be mistaken for a rapid return to pre-war production. Syria’s oil output had already been declining long before 2011, after peaking in the 1980s, and the war then accelerated the collapse through infrastructure destruction, sanctions, underinvestment, primitive refining, smuggling, and repeated changes in control. This does not mean recovery is impossible. New drilling, reservoir management, digital monitoring, enhanced oil recovery, horizontal wells, and better seismic interpretation could make some previously marginal fields or old discoveries more viable today than they were 15 years ago.

But Syria is not, and has never been, a major oil power capable of living off hydrocarbons without major discoveries. Even at its historic peak, its output was modest by regional standards, and much of the known onshore base is mature, damaged, or under-assessed. But that is why offshore exploration, albeit speculative, still matters: it offers upside that the mature eastern fields may not. It should be noted, however, that Syria has not yet made a commercial offshore discovery, and Lebanon’s nearby offshore campaigns have so far failed to produce a positive discovery.

This makes the more ambitious targets floated by SPC leadership. SPC Director Youssef Qiblawi said current output had reached around 133,000 bpd, projected roughly 300,000–350,000 bpd by end-2027, and repeated a target of around 800,000 bpd by late 2029 or early 2030. His explanation relied on a combination of rehabilitating damaged fields such as al-Omar and al-Tanak, expanding Rmeilan, and drilling new onshore blocks. While these targets are politically important because they signal confidence to investors and the public, they remain highly ambitious given the state of infrastructure, reservoir damage, financing needs, and operational risks.

Nevertheless, offshore exploration is technically complex, and that is precisely why it matters. A single exploration or delineation well can cost close to USD 100 million before any production is guaranteed, so any move toward drilling involves mobilizing substantial capital, personnel, and technical capacity in Syria. For now, however, the sector’s near-term significance lies in credibility, capital inflows, and energy security. Agreements involving Chevron, TotalEnergies, ConocoPhillips, QatarEnergy, and UCC can bring technical studies, seismic work, drilling commitments, service contracts, and foreign capital even before production begins. Onshore investment will remain more constrained and will depend, among other things, on investors’ ability to price political, legal, insurance, and operational risks and move capital into Syria.

Electricity Supply Improves Unevenly as Syria Moves to Restore Regional Power Links

Key Developments: Syria’s electricity sector continues to see localized improvements, although supply remains uneven across regions. In Aleppo, electricity returned gradually to parts of the eastern city after around nine years of interruption, following the opening of four transformer centers in al-Shaar, benefiting roughly 15,000 residents. The Ministry of Energy also said it had carried out transmission, distribution, and maintenance works across several regions, including restoring electricity to Hurran in rural Maarat al-Numan after 13 years, raising supply in 286 villages around Qamishli from one hour to more than eight hours per day, and bringing electricity back to 35% of Qamishli city after a two-year outage. Separately, the Jandar power plant in Homs reportedly reached full production capacity for the first time in nearly a decade, rising from around 200 MW before the transition to 825 MW after maintenance works.

Regional electricity interconnection also returned to the policy agenda. In Amman, the Syrian, Jordanian, and Lebanese energy ministers discussed advancing electricity interconnection and related technical work, with Syrian Energy Minister Mohammad al-Bashir saying Syria was working to rehabilitate power links with Jordan and Lebanon. Syria plans to restore transmission lines with Jordan and maintain four interconnection lines with Lebanon, which officials described as technically ready on both sides. Furthermore, Lebanon’s energy minister later said Beirut was considering buying electricity directly from Syria, while work continues on the wider Jordan–Syria–Lebanon interconnection, which he said could take around one year to rehabilitate.

Despite these improvements, electricity remained a source of pressure for households and industry. In Aleppo, industrialists reported electricity bills reaching millions of Syrian pounds after industrial tariffs rose to SYP 1,700 per kWh (+/- USD 0.13) for factories requiring continuous supply, while some industrial areas still received only around 12 hours of power per day. Separately, legal challenges against the October 2025 tariff increase continued in Syrian courts, with hearings delayed into June. In Idlib, local sources also reported new tariff increases by the Turkish private company Green Energy, alongside recurring evening outages.

Why It Matters: The Syria–Jordan–Lebanon electricity track reopens an old regional interconnection file that had long been technically plausible but politically difficult. Jordan and Syria have been linked through a 400 kV transmission line since 2001, but suspended in 2012. The 2022 plan to transmit Jordanian electricity to Lebanon via Syria stalled over financing, infrastructure damage, and sanctions-related complications. With Syria now re-engaging diplomatically, sanctions barriers reduced, and Lebanon still facing severe power shortages, using Syria as an electricity corridor has become more practical again.

Domestically, supply is improving from a very low base. Better electricity in Damascus, Aleppo, Qamishli, Raqqa, Deir Ezzor, and other areas matters because power remains one of the main constraints on recovery. A more reliable supply reduces dependence on private generators, lowers operating uncertainty, and allows households, workshops, and factories to operate for longer hours. Politically, restoring electricity to long-neglected areas and places only recently brought under central government control also helps the state reassert itself through service delivery, especially in eastern and northeastern regions where authority and infrastructure were fragmented during the war.

The risk is that improved availability is being paired with higher tariffs before reliability is fully restored. The recent tariff reform may help reduce subsidy pressures and improve sector finances, but it also raises production costs for manufacturers, food processors, textile producers, metal workshops, and other energy-intensive activities. If firms pass these costs on, consumers face higher prices; if they cannot, margins narrow and production remains constrained, with the labor market also potentially being affected.

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Financial Normalization: Central Bank, Currency, and Public Banks

Central Bank Unveils New Strategy as Raslan Replaces Husrieh

Key Developments: On May 15, President Ahmad al-Sharaa appointed Mohammed Safwat Raslan as Governor of the Central Bank of Syria, replacing Abdulkader Husrieh, who was subsequently appointed Syria’s ambassador to Canada. Shortly before his departure, Husrieh had announced the Central Bank’s 2026–2030 strategy, which focuses on monetary stability, exchange-rate management, banking-sector integrity, digital payments, financial inclusion, and reintegration into the global financial system.

The Central Bank also formally launched a sector-wide gap assessment with consultancy firm Oliver Wyman covering both the Central Bank and the wider financial sector. Separately, reports indicated preparations for a Damascus Foreign Exchange and Gold Market intended to provide a centralized platform for foreign-exchange trading and price formation.

High on the Central Bank’s agenda, currency replacement remained a central policy priority throughout the month. On May 1, the Central Bank extended the exchange period for old banknotes until June 30, while Husrieh reported that 56% of the old monetary mass had already been replaced. By the end of May, Raslan extended the deadline again until July 30 and announced that replacement rates had exceeded 63% nationwide. Throughout the month, the Syrian pound traded at roughly SYP 13,500–14,000 per USD ((new) SYP 135-140) in the parallel market, remaining significantly weaker than the official exchange rate.

Why It Matters: The replacement of Abdulkader Husrieh with Safwat Raslan came at a sensitive moment for Syria’s monetary transition. Husrieh had overseen several key post-Assad initiatives, including the currency replacement process, the 2026–2030 strategy, and the Oliver Wyman gap assessment, and was at the forefront of efforts to reconnect Syria’s financial system with international institutions. Husrieh’s sudden reassignment, therefore, sends mixed signals, especially given the lack of public criticism against him: it may reflect an effort to bring in a younger, more implementation-oriented figure with experience in private banking, governance, and digital transformation, but it also raises questions about policy continuity and the degree of autonomy granted to the Central Bank, especially given reports of competing influence within the institution itself.

At the policy level, the new strategy broadly targets Syria’s main financial weaknesses: low confidence in the pound, a fragmented foreign-exchange market, weak banking intermediation, limited digital payments, and the need to reconnect with global financial channels. As for the currency replacement process, it shows progress, but the repeated extensions and the recent decision to reopen exchanges through exchange and transfer companies also suggest that the Central Bank is still adapting the rollout to administrative bottlenecks, weak banking coverage, and the realities of a cash-based economy. Reopening the process to exchange and transfer companies matters because bank-branch coverage remains uneven, especially outside major cities, while money-transfer networks have long been central to Syrian cash circulation.

Public Banks Enter Reform Push as Debt Relief, Lending, and Governance Issues Advance

Key Developments: Syria’s public banking sector saw several reform-related developments in May. Oliver Wyman reportedly completed the first phase of its review of Syria’s six state-owned banks, with options under discussion including restructuring, privatization, or strategic partnerships. Separately, Finance Minister Mohammad Yisr Barnieh met with directors of public banks to discuss the implementation of Presidential Decree No. 70 of 2026 on distressed loans, while the Ministry of Finance later issued executive instructions covering exemptions, rescheduling, and settlement mechanisms for borrowers at government banks.

Several public banks also announced operational measures. The Agricultural Cooperative Bank prepared its branch network to pay farmers’ grain dues during the wheat season, and issued instructions for settling farmers’ distressed loans under Presidential Decree No. 70 of 2026. The Popular Credit Bank resumed limited-income loans with a ceiling of (new) SYP 100,000 (+/- USD 720), though debate later emerged over loan interest rates following an earlier Court of Cassation ruling on usurious interest. The Industrial Bank and the Ministry of Finance also discussed launching a Sharia-compliant banking window and financing tools to support the repair of damaged industrial facilities.

Governance and integrity concerns remained visible. Oversight reporting raised allegations of embezzlement linked to Saving Bank offices. Separately, the Ministry of Finance announced disciplinary and anti-corruption measures against 256 employees and accountants, adding that future lists would include employees in government banks.

Why It Matters: Public-sector banks were cornerstones of Syria’s development in previous decades because they served as the primary financial channels through which Syria allocated credit to specific social and productive groups. The Agricultural Cooperative Bank is designed to finance rural communities and agricultural activities; the Industrial Bank to support industrial projects; the Popular Credit Bank to serve low-income borrowers and small productive activities; and the Real Estate Bank to finance housing and construction.

This makes the reform debate politically sensitive. The Oliver Wyman review, therefore, raises a central policy question: should Syria modernize its public banks, privatize them, or preserve them as development-oriented institutions? Given the government’s broader shift toward a more liberal economic agenda, including discussions around the privatization of state-owned enterprises, which has yet to be settled, such a move would not be surprising. Yet a reform agenda focused mainly on profitability could weaken the banks’ development role, especially if institutions originally designed to serve farmers, industrialists, small borrowers, and housing finance are pushed toward purely commercial lending.

The resumption of lending is one of the most important signals in the public banking sector because formal credit had virtually disappeared during the conflict. In 2020, Syrian authorities ordered public and private banks to stop granting credit facilities, including at the Real Estate and Agricultural banks, and Syria’s broader banking collapse severely weakened access to credit for businesses and households. Against that backdrop, Presidential Decree No. 70 of 2026 and the reopening of Popular Credit Bank lending could prove significant. Presidential Decree No. 70 of 2026 is designed to clean up non-performing loans through interest waivers, penalty exemptions, and rescheduling, while the Popular Credit Bank’s return to personal lending gives limited-income public-sector employees access to formal credit again.

The Islamic finance debate adds another layer. Syria already has an Islamic finance base: Islamic banks greatly outperformed traditional banks throughout the conflict, with rising demand for Islamic tools such as murabaha and Islamic bank assets growing from SYP 18.2 trillion to SYP 25 trillion. The government is also exploring sukuk: Finance Minister Mohammad Yisr Barnieh said Syria was working on the legal, regulatory, and technical framework for the country’s first sovereign sukuk issuance, while debate has emerged over whether such instruments should finance productive projects or simply cover budget gaps. The debate over the use of sovereign sukuk issuance is not new, as the Ministry of Finance was reportedly already finalizing a draft regulation to legislate such financial instruments in 2024.

Taken together with the Popular Credit Bank’s return to interest-based lending, the proposal to allow Islamic banking windows, and the renewed public debate over bank interest, these developments raise broader questions about the government’s financial direction. The issue is not Islamic finance itself, which can broaden participation and attract savers or borrowers who avoid conventional interest-based products, and which has proved to be extremely popular. The risk is that debates over “usurious interest” could narrow the space for ordinary credit precisely when Syria needs multiple financing channels. There is also a question of sequencing. Given the state’s limited legislative and administrative bandwidth, prioritizing new Islamic-finance frameworks while existing financial tools remain underused could slow more urgent reforms.

Finally, this debate also intersects with uncertainty about the government’s willingness to take on loans. Observers continue to ask whether the reluctance reflects a preference for interest-free or Sharia-compliant financing, concerns over already mounting public debt, or simply the difficulty of accessing affordable external credit. It remains to be seen whether will be whether Syria builds a plural financial system (conventional, Islamic, development-oriented, and donor-backed) or whether ideological and fiscal constraints limit the range of tools available for broad-based economic recovery and reconstruction.

The Domestic Social Contract: Wheat, Property, and Livelihoods

Wheat Price Protests Force Bonus as Stronger Harvest Season Tests Grain Procurement

Key Developments: Syria’s 2026 wheat season became a major policy issue after the Ministry of Economy and Industry set the purchase price for first-grade durum wheat at (new) SYP 46,000 per ton (+/- USD 333), triggering farmer protests in several wheat-producing areas. Farmers and residents protested in Raqqa, Deir Ezzor, Hasakah, Hama, and other agricultural areas, arguing that the price did not reflect higher costs for fuel, seeds, fertilizers, harvesting, transport, and sacks. Al-Modon also reported that some farmers threatened to withhold deliveries to state institutions if the price was not revised. In reaction, President Ahmad al-Sharaa issued, on May 21, Presidential Decree No. 120 of 2026, granting wheat farmers an additional (new) SYP 9,000 per ton (+/- USD 65) delivered to the Syrian Grain Establishment, on top of the official purchase price. This raised the effective state purchase price to (new) SYP 55,000 per ton.

The government also moved to prepare procurement and payment channels for the harvest. The Syrian Grain Establishment said it had raised storage capacity to around 1 million tons, was preparing 15 new sites in Hasakah, Raqqa, and Deir Ezzor, and planned to expand its marketing and intake centers to nearly 80. The Agricultural Cooperative Bank separately said that 106 branches were being prepared to pay farmers’ grain dues, except for 24 branches in Hasakah and Raqqa, where payments would be redirected to nearby operational branches.

The season unfolded against a mixed agricultural backdrop. Heavy rainfall improved vegetation and water availability after a significant drought during the preceding season, but also caused flooding, damage to farmland, and disruption to infrastructure in several areas.

Why It Matters: Syria relies on a state-led foodgrains procurement model in which the government buys wheat from farmers through official grain institutions to secure flour supplies, bread availability, and strategic reserves. The stakes were especially high after two weak seasons and a severe drought. The FAO had forecast Syria’s wheat import requirement for the 2025/26 marketing year at around 3 million tonnes, nearly 70 percent above the five-year average, while it was previously reported that domestic production had fallen far below national consumption needs in 2025.

These protests are noteworthy for their scale, their status as a nationwide mobilizing issue, and for showing that farmers potentially represent a significant bargaining force in the post-Assad transition. The initial price increases triggered demonstrations in half of Syria’s governorates, with some farmers threatening to withhold grain from state institutions. The controversy also highlighted a consultation problem: farmers’ representatives argued that the price had been set without sufficient participation by farmers’ unions or local producers, despite sharp regional cost differences.

This controversy is indicative of a broader problem in the local production-cost structure. Farmers argued that fertilizer, diesel, pesticides, harvesting, sacks, and transport costs had risen sharply, with some inputs effectively priced in dollars while the state purchase price was set in Syrian pounds. Farmers pointed to high costs for diesel, fertilizer, irrigation, harvesting, and transport, while others noted a discrepancy between the state’s wheat seed price of around USD 500 per ton and the initial crop purchase price of about USD 330 per ton. Farmers also explained that a single national procurement price also fails to reflect regional differences, especially in eastern governorates, where irrigation costs can be structurally higher than in rain-fed or better-served areas.

Protests Erupt over Closure of Makeshift Oil Refineries in Aleppo

Key Developments: The Syrian Petroleum Company’s (SPC) decision to close primitive oil refineries/burners, known locally as “harraqat”, in Tarhin near al-Bab in rural Aleppo, triggered protests by owners, workers, and traders in late May. Protesters argued that the facilities had operated for years under previous local arrangements, supplied fuel to northwestern Syria during the conflict, and supported thousands of direct and indirect livelihoods. Internal security forces prevented demonstrators from reaching Saadallah al-Jabiri Square in Aleppo on May 20, while other reports said tensions escalated in Tarhin as security forces moved to enforce the dismantling.

SPC and the Ministry of Energy defended the closures on legal, health, environmental, and technical grounds, saying the haraqaat were illegal, unsafe, highly polluting, and produced fuel that did not meet Syrian specifications. The SPC gave owners two options: sell the metal structures to the company at “incentive” prices or keep them, provided they signed a pledge not to use them again in any oil-related activity. The company also began interviews to place haraqaat workers at formal oil facilities and to settle outstanding financial dues owed to owners, while SPC later welcomed a pledge by Hemco Minerals and Fuels to remove its own primitive refineries in Aleppo.

Why It Matters: The makeshift oil refineries emerged because the formal fuel supply collapsed during the conflict, and in places such as Tarhin, they became a full local economy: supplying diesel to generators, bakeries, water pumps, agriculture, and transport, while providing work for displaced families with few alternatives. This is why the closure is socially sensitive. The government’s argument is rational: primitive refining is unsafe, polluting, technically inefficient, and outside formal fuel regulation. Still, the sector had been tolerated, taxed, organized, or indirectly managed by successive local authorities for years, creating expectations of recognition, compensation, or gradual transition.

Shutting down the haraqaat is part of a necessary post-war normalization of the oil sector: centralizing crude flows, ending low-quality refining, reducing waste, improving safety, and returning fuel processing to formal infrastructure. But if the state closes these facilities without a credible livelihood plan, the risk of social unrest is real, as seen in these early demonstrations.

Similar tensions to those in Aleppo appeared earlier in Deir Ezzor. In February 2026, Damascus ordered the closure of informal refineries, and workers protested almost immediately, arguing that the decision threatened surrounding livelihoods. While the SPC seems to be keen on absorbing workers into formal oil facilities, workers said the job offers lacked clarity on salaries, contracts, locations, and guarantees.

Damascus Offers Marota and Basilia Compensation Package, but Decree 66 Dispute Deepens

Key Developments: In May, Damascus Governorate took steps to address long-standing grievances related to Legislative Decree No. 66 of 2012, the framework governing Marota City and Basilia City. Officials presented the measures as an effort to correct past injustices while continuing the two projects, which cover parts of Mazzeh, Kafr Sousa, Daraya, Qadam, Nahr Aisha, and the southern ring-road area. The governorate said it had received 1,606 grievance requests, resolved 1,122, increased owners’ allocated floor area by 13.9%, raised rent allowances for alternative-housing beneficiaries by 35 times, restored rights to more than 1,000 previously excluded families, and allocated funding to build 54 alternative-housing towers over three years. It later began paying rent allowances to eligible beneficiaries in Marota City.

Yet, the package did not settle the dispute. Affected owners and rights advocates argued that Decree 66 had converted direct property ownership into shares inside a governorate-managed project, while the Association to Repeal Decree 66 and Restore Rights demanded cancellation of the decree and return of confiscated property. Affected groups say more than 12,000 homes were demolished in Marota-linked areas and more than 20,000 homes in Basilia-linked areas, with tens of thousands displaced.

The controversy also took on a political and rights dimension following the arrest of activists. Affected residents had organized repeated protests demanding the repeal of Decree 66, while Hashtag Syria reported that two representatives of affected owners, Ibrahim Sheikh al-Shabab and Yasser Abbas, were detained after Damascus Governor Maher Idlibi filed a complaint with the cybercrime branch regarding their media and protest activities. Critics said the compensation measures remain insufficient because the file concerns not only urban planning, but also property rights, forced displacement, investor accountability, and transitional justice.

Why It Matters: Grievances linked to Legislative Decree No. 66 of 2012 are long-standing and extend far beyond questions of compensation. For many affected residents, the issue concerns displacement, the loss of community ties, uncertainty surrounding alternative housing, and the conversion of direct property ownership into shares whose value and future remained unclear. Residents repeatedly argued that the project converted homes and land into regulatory shares of uncertain value, while years of delays, low rental allowances, and a lack of clarity about alternative housing forced many families to sell their rights at heavily discounted prices. Others argued that ownership requirements failed to account for families whose documents had been lost, destroyed, or left behind during years of displacement.

Following the collapse of the Assad regime, affected and advocacy groups saw an opportunity to reopen a file that had long been politically untouchable. Residents’ committees and activists have pushed not only for higher compensation, but also for greater transparency, recognition of past grievances, and, in some cases, revisions to the master plans themselves.

The new authorities are attempting to address some of the decree’s consequences without abandoning the framework altogether. While the compensation package is significant, it remains a corrective measure within the existing system rather than a full legal reset. Many affected owners argue that the problem is not only inadequate compensation, but the original conversion of property rights into shares in a governorate-managed project. For many residents, the issue is also one of return, with alternative housing elsewhere seen as an insufficient substitute for homes and communities lost in areas such as Mazzeh, Kafr Sousa, Qadam, and al-Assali.

At the same time, a full reversal would be difficult after more than a decade of accumulated contracts, shares, and property transactions. The broader debate over Jobar, Qaboun, and Tishreen suggests that Marota could set a precedent for reconstruction across Syria. How the government handles this file may ultimately determine whether reconstruction strengthens confidence in property rights or becomes an early legitimacy crisis of the transition.

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 selects the developments I consider most significant 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 developments, banking and monetary reforms, trade and reconstruction dynamics, property rights disputes, public service issues, and the evolving relationship among the Syrian state, society, and external actors.

The format is simple: each entry begins with a news summary explaining what happened, followed by a “Why It Matters” section offering additional information, context, and analysis.

The digest is written for readers who want a structured, analytical overview of Syria’s transition: policymakers, researchers, journalists, diplomats, development practitioners, investors, civil society actors, and anyone trying to follow the country’s economic and political trajectory.

It is not intended to be exhaustive, and it does not replace daily news monitoring. Instead, it offers a monthly snapshot of the issues I believe deserve closer attention.

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