Damascus, April 06 (QNA) - The repercussions of the global energy crisis are intensifying on the Syrian economy amid rising global oil prices and geopolitical tensions in the region. This places additional pressure on a country that relies heavily on importing its needs of petroleum products and gas while facing accumulated challenges in this vital sector.

In this context, Advisor to the Syrian Minister of Economy and Industry Dr. Osama Kadi said that the increase in oil prices from around $77 to over $100 per barrel directly impacts the Syrian economy. He noted that the country still needs to import part of its requirements, which leads to higher production costs and increased pressure on the daily cost of living for citizens.

In a statement to Qatar News Agency (QNA), Dr. Kadi said that the government is working to secure as much oil and gas as possible to meet needs without a significant increase in costs. However, Syria is not isolated from the world, as global food prices and shipping costs have risen due to higher energy prices.

He pointed out that these repercussions may be temporary with the end of the war on Iran, noting that there are efforts to ease the burden on citizens, either by improving income levels or by securing additional supplies of gas and oil from friendly countries, which would help mitigate the impact of the crisis.

Advisor to the Syrian Minister of Economy and Industry explained that rising energy prices lead to higher inflation rates, as they are involved in various aspects of economic life. He emphasized the importance of accelerating efforts to achieve local production that can meet daily needs, thereby enhancing stability in the energy sector.

He also noted that improving the infrastructure of the oil and gas sector, along with expanding renewable energy projects, represents an important path to overcoming these challenges. He added that solar energy projects are currently being developed in several regions across Syria.

For his part, the Head of the Syrian Economists Syndicate Mohammad Al-Bakour confirmed in a similar statement to QNA that the global energy crisis is placing increasing pressure on the Syrian economy, which is a net importer of petroleum products. He noted that any rise in oil prices adds significant burdens to the import bill and is reflected in the trade balance deficit, as well as putting pressure on the exchange rate of the Syrian pound.

He explained that rising energy costs are a key driver of inflation, as increases in fuel prices are reflected in the prices of various goods and services, leading to a decline in citizens’ purchasing power amid difficult living conditions.

Al-Bakour added that productive sectors are directly affected, as energy constitutes a large share of industrial production costs in some sectors, leading to a decline in output and weakened competitiveness. Meanwhile, irrigation and transportation costs in the agricultural sector have increased, which in turn affects food security.

He pointed out that if the crisis continues, inflationary pressures and exchange rate volatility are expected to persist. This calls for measures such as diversifying energy sources, expanding renewable energy, supporting productive sectors, and providing assistance to the most affected groups.

In the same context, Director of Government Communications at the Syrian Ministry of Energy Ahmed Al-Sulaiman explained in a statement to QNA that the energy crisis in Syria results from a combination of situational factors and structural challenges. He noted that the infrastructure of the oil and gas sector has suffered significant damage over the past years, leading to a decline in production capacity.

He added that economic sanctions and import difficulties have limited the country’s ability to secure its fuel and gas needs, pointing out that regional developments, including the war on Iran, have affected supply chains and increased pressure on the electricity grid.

He also indicated that the Ministry of Energy is working on several tracks to improve the situation, including rehabilitating damaged facilities, securing additional supplies, and implementing programs to rationalize energy consumption, in addition to the gradual expansion of renewable energy sources as part of a long-term strategy.

He explained that improvement will be gradual and linked to the stability of regional conditions and the success of ongoing efforts, noting that there are positive indicators as some projects begin to enter into operation despite the continued challenges.

For his part, Head of the Finance and Banking Department at the Syrian Arab International University Dr. Mohammed Al Jashi confirmed to QNA that the current crisis is global in nature. However, its impact on the Syrian economy appears greater due to additional factors, including economic restrictions, difficulties in financial transfers, and exchange rate volatility.

He explained that rising energy costs are reflected in the prices of goods and services and increase the burden on citizens. He noted that the industrial sector has begun to be clearly affected due to higher raw material costs and declining purchasing power, while the impact on the agricultural sector remains relatively limited but is expected to increase with rising input costs.

He also pointed out that one of the proposed scenarios is to leverage Syria’s position as an energy transit corridor in the region, which could help generate additional revenues and ease the severity of the crisis, especially with the start of some oil supplies passing through Syrian territory.

In turn, researcher in international economics and finance Professor Mohammed Ghazal explained to QNA that the most prominent impacts of the energy crisis are seen in the import sector and supply chains. Delivery times are delayed, supply gaps emerge, and the costs of maritime and air transport, as well as insurance, have increased. With transport routes becoming more concentrated toward the West, these additional costs are passed on to the final consumer, leading to further inflationary waves.

He pointed out that Syria, as an energy-consuming country, is directly affected by rising energy prices, which leads to supply-side inflation characterized by a general increase in prices, erosion of purchasing power, and a decline in real income. This occurs alongside market distortions such as price gaps and the temporary disappearance of certain goods, while other goods accumulate due to supply bottlenecks.

He explained that production is closely linked to the availability of energy, especially in the industrial sector, where shortages lead to partial disruption of industrial activity, loss of job opportunities, and a decline in domestic production - ultimately slowing economic recovery. He added that the agricultural sector may also face greater challenges in the coming periods due to rising input costs.

He further noted that early indicators of the crisis are evident in the noticeable rise in prices of imported goods, particularly those linked to maritime transport. He outlined several possible scenarios, including a pessimistic one in which ongoing tensions and worsening resource shortages lead to increased inflationary pressures and reduced market supply. He also highlighted another scenario based on internal adaptation through boosting local production, relying on available resources, accelerating infrastructure rehabilitation, and diversifying energy sources away from conflict zones.

In addition, he pointed to a third scenario involving leveraging Syria’s geopolitical position as a regional energy transit corridor, which could generate additional revenues and alleviate economic pressures. (QNA)