Oil companies in Europe are betting on the survival of president Bashar al-Assad in Syria, in sharp contrast to their support for Libya's opposition six months ago, even while the European Union is expected to soon slap oil sanctions on Damascus.
Several tankers are sailing to Syria this week to either deliver fuel or pick up crude, which may suggest that oil companies believe the rebellion in Syria will fail to overthrow Dr Assad's government.
The same companies, including Swiss-based trader Vitol, made the opposite bet when it came to trade in Libya. They agreed to supply opponents of Muammar Gadafy with fuel in the hope their support would be rewarded at the end of the war.
"What oil firms are currently doing does really look like they believe Assad will win, and they will have to deal with him again," said a Western diplomatic source.
"The big difference that they all see with Libya is that in Syria you don't even have a location where the opposition can get together like Benghazi," he added.
Oil giant Shell is expected to load its Neverland Star tanker with crude oil cargo in the port of Banias over the weekend. The tanker was in Alexandria in Egypt today, just a day away from the Syrian port.
The company operates a joint venture with Syria's state oil company and a Chinese-Indian firm to produce Syrian Light. Traders said the tanker was likely to load oil from Shell's ownership share.
Industry sources say that even if oil exports from Syria are banned by the EU this week, Shell plans to continue operating within the country's borders. It would keep that up until the EU imposes sanctions on cooperation with Syrian firms, which so far appears less likely.
Swiss-based trader Vitol, which played a central role in the war effort in Libya, was due to deliver 70,000 tonnes of gas to Banias today, indicating it has a different game plan in Syria.
And a third tanker, the Altesse, was headed for the Syrian port from Naples and was expected to arrive this week, satellite tracking information showed. It was not clear whether the 70,000 tonne tanker was due to deliver or load at Banias, but at least two cargoes of petrol are expected to be delivered to Syria in early September by trading houses Trafigura and Vitol.
Denmark's AP Moller-Maersk said last week it had canceled a deal to load naphtha in Syria due to US sanctions.
Looming sanctions on Syria have had a very limited market on oil markets so far as the country's exports of 150,000 barrels per day and imports of products are only a fraction of Libya's pre-war shipments, the loss of which six month ago rocked the oil markets.
Five months of protests have failed to unseat Dr Assad, who inherited power from his father and retains the loyalty of the core of his armed forces comprised mostly of members of the Alawite minority, the same sect as the president.
Analysts say that even a wider EU embargo on trade will not necessarily fully squeeze the economy.
"The sanctions are definitely important but won't bankrupt the regime," said Eurasia Group analyst Ayham Kamel, adding that an EU embargo was likely to be part of a first round, which could be expanded if violence in Syria escalated.
"The sanctions are just on oil imports (into the EU) and do not target companies operating in Syria ... The EU is wary of one package and likely to take an incremental approach to match the rise in violence in Syria."
But even if the prospect of wider-reaching sanctions on Syria's oil business looms, the EU is not expected to rush in with very severe measures.
"With the regime so entrenched, tougher sanctions will soon start hitting the population too broadly, starting to look like Iraq in the '90s, and memories of that mistake are still too strong," said analyst Samuel Ciszuk of IHS Global Insight, adding it was likely Dr Assad's regime would hang on to power for some time yet.
Reuters
