12/09/2011

Syrian pipeline attack raises supply threat

FINANCIAL TIMES
By Javier Blas in London


A Syrian oil pipeline has been blown up in the first significant rebel attack on the oil industry since the uprising started nine months ago.
Damascus confirmed the attack yesterday. The state-run Syrian Arab News Agency said: “A destructive terrorist group targeted a crude oil pipeline in Tal Al-Shur, northwest of Homs refinery.” High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail.

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The Syrian Observatory for Human Rights in the UK said opposition groups attacked the main feed to the refinery. A video on YouTube showed a plume of black smoke and flames.
The Homs refinery is the second largest in Syria, with a capacity to process about 107,000 barrels a day from domestic oilfields, according to the US Department of Energy. The country’s largest refinery is at the Mediterranean port of Banias.
The so-called Arab spring has disrupted oil markets through 2011, with lower oil supplies in Libya due to the civil war, in Yemen and more recently in Syria.
The attack had a briefly bullish impact on global energy markets, which focused on concerns about the eurozone debt crisis. ICE January Brent rose in early trading to $109.60 a barrel, but by the end of trading in London was down $1.42 to $108.11. Nymex January West Texas Intermediate fell $2.15 to $98.34 a barrel.
The explosion, which followed an attack on a smaller pipeline in late July, is a reminder of the fragility of the oil industry in the region, analysts said. The European Union has imposed an embargo on oil exports from Syria that has forced Damascus to reduce production from 380,000b/d to about 250,000b/d.
Oil analysts and diplomats expect Syrian crude production to fall further in coming months after Royal Dutch Shell and Total of France ceased operations in the country following a new round of European sanctions. The EU said last Friday it had widened its sanctions to include the state-owned General Petroleum Co, Al Furat Petroleum Co and Syria Trading Oil Co.
The UN says more than 4,000 people have been killed in unrest since March and more than 14,000 people are believed to have been detained.
Syrian activists said at least 950 people were killed in November, the bloodiest month in the uprising against the regime of Bashar al-Assad.