The fall of the Assad regime in Syria will soon lead to lower oil prices

The rapid fall of the Assad regime in Syria, whose family has been in power for 54 years, as well as plans for a peaceful transition of power to a new government will normalize the situation in the country and contribute to the increase of oil supplies from the region, as the new state will need funds for its formation.

 

At a forum in Qatar, the head of the National Coalition of Syrian Revolutionary and Opposition Forces, Hadi Al-Bahra, said that after the overthrow of the Assad regime, a transitional civil government will be established, which will not include representatives of the HTS or other extremist organizations. He also said that Syria should remain united and not divided, so the influence of Iran and the Russian Federation, Assad's main allies, will be limited. The pro-ruling Baath party will not be disbanded, so as not to lead to its isolation and transition to extremism. Instead, it is planned to turn it into a "normal" political force in order to avoid such mistakes that were made in Iraq in 2003 after the overthrow of Hussein.

 

The Assad regime fell in just 12 days. Rebels were prohibited from entering government offices in the capital, and were not allowed to kill or displace ethnic minorities or Assad supporters. It was decided that the old government would work until a new one was established.

 

If Hadi Al-Bahra is able to unite the Syrian people, the country will need funds to rebuild, so the production and sale of oil to the world market will accelerate.

 

The war in Syria was primarily caused by the intentions of the Russian Federation to limit the construction of gas and oil pipelines from Azerbaijan and the Middle East to Europe, which would relieve the EU of the need for Russian gas and oil. If Iran overthrows the Ayatollah regime, it will fully satisfy the needs of Europe with its gas alone, not taking into account the increase in oil supplies.

 

During the week, February Brent oil futures fell by 3.3% to a 2-week low of $71.2/barrel (-0.5% for the month). Prices are under pressure from the Macquarie Group report, according to which in 2025 the world will have an oil surplus of more than 1 million barrels per day, as all restrictions from OPEC+ will be offset by increased supplies by countries that are not part of the cartel.

 

OPEC+ countries postponed a planned increase in oil production by 180,000 barrels per day from January to April and said they would cautiously increase production amid falling global oil demand.

 

OPEC+ previously planned to resume production to 2.2 million barrels per day per month from January to December 2025, but has now postponed these plans to September 2026. In November, they increased crude oil production by 120,000 barrels/day to 27.02 million barrels/day, and total world oil production reached 72 million barrels/day.