There is one thing common to all wars fought by Man since time immemorial, apart from the death and destruction””it is an opportunity to make money.
War and economics march hand in hand, and nowhere is that more clearly illustrated than in the complex war in Syria, which has now been raging for almost seven years. This conflict, which has claimed over 500,000 lives and displaced millions of people, arose following the wave of the 2011 Arab Spring protests. As the war escalated, it drew more and more proxy players from the surrounding countries into Syria. Almost inevitably, the superpowers of Russia and the United States also became embroiled, as each sought a foothold in that beleaguered country. Proxy players such as the Iranian-backed Hezbollah and ISIS have also jostled for position among the ruins of the once-bustling cities of Raqqa, Aleppo, and Latakia.
One direct consequence of the waves of war is the fluctuating price of commodities, primarily the cost of gas and oil. The price of indirectly affected commodities such as aluminum also fall and rise depending on the ferocity of the most recent battles. And as the war rages, so the superpowers vie for position. Russia, a long-time ally of the current and previous Assad regimes has the greatest leverage in the war-torn country. After decades of involvement in the Middle East, first with Afghanistan and then in Iraq, the US has had less involvement in Syria, past and present. Iran, more of a regional superpower than a player with global influence, has also firmly interwoven its interest with that of the Syrian regime, which it supports financially and militarily – with weapons, personnel and advisors.
Watching all of the activity from the sidelines, the US currently dips its toe into the Syrian morass, as it did recently along with France and the United Kingdom, bombing a series of Assad’s military bases. This action was in direct response to an alleged chemical attack by Assad on civilians in the town of Douma. Russia fiercely denied that any such chemical attack took place, calling it “fake news”, stealing the oft-vaunted phrase of US president Donald Trump.
In spite of the odd bombing raid over Syrian territory, America’s influence in the arena has been largely economic and indirect. Pursuing the Countering America’s Adversaries Through Sanctions Act, or CAATS of August 2017, Donald Trump has attempted to force economic leverage on a number of Russia’s influential oligarchs. Trump has also applied sanctions on some Russian corporations, such as a 10% tariff on aluminum which directly affected Russian aluminum producer Rusal, which holds a 9% share of the global market. Following the US intervention in the market, the Russian company’s shares nosedived as did the value of the ruble, and the market price of aluminum rose by 10%.
The US has condemned Russia for the ongoing occupation of Crimea, for supporting Assad in Syria, and for a range of activities such as involvement in global cyber-crime. In addition to the 10% tariff on aluminum, Trump also announced a 15% tariff on steel imports, although that move was seen more as a defense of America’s domestic steel market than a move designed to damage foreign competitors. US has also applied sanctions on the executives of two of Russia’s largest gas companies, Gazprom and Surgutneftegas. This latter company is responsible for producing 11% of Russia’s entire gas output. However, the US has not put the actual Gazprom and Surgutneftegas companies onto the sanctions list, as that would have certainly affected the flow of gas into Europe, which would possibly result in a European backlash against the US. Sanctions on Russian oil companies would also push the price of gas and oil higher, which would affect the nascent recoveries of European economies following the slump of the banking crisis in 2008/9. Another factor that has complicated US sanctions activity is that oil is currently standing at its highest price since 2014, and a price in excess of 65 USD/barrel could trigger shale-oil programs in the US, which would only result in an oil glut several months later. In reality, the oil price is only likely to rise above 70 USD/barrel following political upheaval in any of the states of the world’s main oil suppliers such as Saudi Arabia, Iran, Russia, Venezuela, Iraq, or Kuwait.
Following the recent barrage of American missiles into Syrian bases, Russia has upped the ante by threatening to deploy its state-of-the art S-300 surface-to-air missile defense system. Such a move is likely to raise the hackles of Syria’s neighbor Israel, who sees it as a virtual right to fly over Syrian airspace to check on the progress of Hezbollah and Iranian forces activity. Such a move by Russia to deploy these air defense batteries would undoubtedly complicate matters and could potentially draw the superpowers and their proxy forces ever closer into direct conflict.
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