
Four months into Syria's uprising, the violence wracking the country is bad and getting worse. The restive city of Homs witnessed sectarian clashes over the weekend that reportedly left dozens dead, while forces loyal to Syrian President Bashar al-Assad converged on the eastern town of Abu Kamal. As the Assad regime's iron-fist-in-a-velvet-glove approach to the uprising continues to fail, all eyes are focused on the Aug. 1 start of the Muslim holy month of Ramadan, when the minority Alawite regime's killing of predominately Sunni protesters could transform the uprising into a sectarian bloodbath.
This bloodshed, which is tragic in its own right, is also causing the sputtering Syrian economy to grind to a halt. Such a development would be particularly dangerous for Assad, as it could cause the business elite in the commercial hubs of Damascus and Aleppo to finally break ties with the regime and join ranks with the opposition. Iran, Assad's staunch ally, is no doubt aware of the threat; Tehran is reportedly mulling a $5.8 billion aid package to Syria, as well as providing a daily supply of 290,000 barrels of oil for the next month. Fortunately, cash-strapped Iran does not have the resources to indefinitely bail out Assad if the United States organizes a Western effort to hit Syria in its Achilles' heel -- namely, its energy revenues.
The longer the Assad regime teeters, the more violent and bloody Syria is likely to become. The Syrian people, the United States, and the international community, therefore, share a common interest in having as short a transition as possible. To help end the bloodshed and bring about a quicker demise of the Assad regime, Washington should now be more ruthless with the Assad regime as well.
Syria produces around 390,000 barrels per day (BPD), down from a high of 600,000 BDP in 1996, and about 6 billion cubic meters of gas annually. Of that, Syria exports around 148,000 BDP of heavy and sour "Souedie" crude, with revenues accruing directly to the state; all gas is used domestically. According to the International Monetary Fund and U.S. government estimates, oil sales account for around one-third of state revenue, with the remainder increasingly made up through corporate and public-sector employee taxes.
But the protests have hit the Syrian economy and currency hard, a fact that is expected to substantially decrease tax receipts. Damascus, therefore, is likely to become increasingly reliant on oil revenue. This in turn would constrain the regime's ability to fund the security services and the army (the primary bodies responsible for the brutal crackdown), maintain market subsidies (e.g., for diesel fuel and gasoline), and pay off vital regime patronage networks.
Declining revenue will also force the regime to resort to more deficit spending. It could borrow against the $17 billion in reserves at the Central Bank of Syria, but this would essentially be printing money, causing inflation that would undermine the Syrian pound and confidence in the banking system. The regime could borrow more from state-owned and private-sector banks, where the Damascene and Aleppine business elite put their savings. But as the protests continue to grow and the cost of doing business with the Assad regime dramatically increases, Syrian merchants and businessmen are likely to pull their deposits. Either scenario would undermine the regime's economic lifeline and help spur elite defections -- a key element to developing a new political order.
Beyond the targeted sanctions on Syrian officials already imposed by President Barack Obama's administration, Washington has tools for leveraging Syrian energy and depriving the Assad regime of critical foreign exchange earnings. Here are six ways to up the pressure:
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