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EU Bans Syria Oil As Marchers Shot

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SEPTEMBER 3, 2011

By FARNAZ FASSIHI

BEIRUT—The European Union banned all import of Syrian crude oil on Friday to protest Damascus’s violent suppression of demonstrators, but the standoff between protesters and President Bashar al-Assad’s government showed no signs of subsiding.

Security forces shot at least 14 marchers dead Friday as Syrians took to the streets following noon prayers. The largest protest appeared to take place in the city of Homs, where tens of thousands of people turned out against the Assad regime to support a day activists had labeled “death before humiliation.”

The EU’s ban on purchases of Syrian oil, which will go into effect Saturday, marks the most serious measure so far taken by the international community against the Syrian leader. The EU is Syria’s largest single trading partner, with €7.2 billion ($10.4 billion) in business last year.

Syria pumps about 370,000 barrels of oil a day, about 150,000 of it exported, according to the International Energy Agency. Those oil exports make up about one-third of Syria’s export income—and nearly all of it is sold to Europe.

The EU oil embargo follows several rounds of EU and U.S. sanctions against Mr. Assad and members of his inner circle, and follows a U.S. decision last month to block purchases of Syrian energy products. The U.S. move, however, was more symbolic: U.S. officials estimated such imports were the equivalent of 6,000 barrels per day.

Among those that human rights activists said were killed by security forces in Syria on Friday, at least eight were killed in the suburbs of Damascus, according to the Syrian Observatory for Human Rights.

In Erbeen near Damascus, security forces raided the Raja Takhsees hospital and arrested wounded protestors, according to activists from the Local Coordination Committee, whose members have organized and documented the uprising in cities across Syria.

“The EU has made clear that we will increase the pressure on President Assad until he steps aside…Throughout Ramadan we have witnessed horrific scenes of continued brutality,” U.K. Foreign Secretary William Hague said from a meeting of EU foreign ministers’ in Sopot, Poland.

The EU sanctions prohibit European customers from buying Syrian oil but don’t prohibit European companies with operations inside Syria from continuing their ventures there. Firms with existing contracts to buy Syrian oil have until Nov. 15 to do so.

The top European oil companies with significant business with Syria include Anglo-Dutch Royal Dutch Shell PLC, France’s Total SA and Hungarian MOL Nyrt.

Analysts say that while Europe is a huge market for Syria, it isn’t clear that the oil ban will deliver a blow to the regime. Syria’s government, though likely squeezed in the short term, could replace European markets with those in Asia, as Iran has done in recent years to lessen the sting of Western sanctions.

“It’s an important step and an indication that the EU and U.S. might consider other measures to isolate Assad. But sanctions have a limited effect on what could happen in Syria,” said Ayham Kamel, a Washington D.C.-based analyst at Eurasia Group.

Some Syrian activists welcomed the news of the EU embargo and hoped it would make it harder for Mr. Assad to fund the crackdowns against protestors. Other activists, however, voiced concern that the sanctions would hurt ordinary people, not the regime, drawing parallels to present-day North Korea and Iraq under the rule of Saddam Hussein.

“This will 100 percent hurt Syrian people. The international community should stop their diplomatic relations and close the embassies to send a strong message,” said Rami Abdel Rahman of the Syrian Observatory for Human Rights.

U.K. Foreign Secretary Hague said Thursday sanctions have been targeted to minimize their impact on ordinary Syrians. “President Assad and those around him are to blame for this. No one else,” he said. “Any attempt to pass on further hardship to the Syrian people would show his utter disregard for their well being.”

A spokesman for Royal Dutch Shell said the company was “taking a very close look” at the EU announcement and trying to work out what it means for Shell. He said the company “always complies with international sanctions.”

Shell exports some Syrian crude but doesn’t have any loading schedule in the coming days. Industry observers say the company is now likely to stop exporting Syrian oil once it has worked through the legal issues of exiting its trading contracts.

A Total spokeswoman said the French oil giant would comply with all sanctions. Chief executive Christophe de Margerie told a conference this week that Total had decided to stop shipping any oil or refined products from Syria even before the sanctions were imposed. But the company so far has no intention of exiting its oil production venture in Syria, since the EU sanctions don’t oblige it to pull out.

Swiss oil trader Vitol had been shipping gasoline and diesel into Syria, but will be reviewing its position once details of the sanctions legislation are clear, a person familiar with the company said. Imports aren’t prohibited under the sanctions, but some of the importing entities are, making it difficult for trading companies to do legitimate business with the Syrian regime.

—Guy Chazan in London contributed to this article.

Write to Farnaz Fassihi at [email protected]

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