Saturday, March 03, 2018

War for oil

A couple of weeks ago there was a lot of intrigue around an encounter between Russian mercenaries in Syria and US armed forces; a combination of pro-Assad militias and the Russians ran into much tougher opposition (Kurdish militia backed by US) than they are used to (civilians and poorly organized rebels) and it ended badly for them. Amid much theorizing about what was the motivation for the botched attack (e.g. Putin thought he could embarrass Trump), the Financial Times has a much, much simpler explanation:

For now, some [Russian] businesses are using unconventional methods to position themselves in Syria. Mr Jawabra said Evropolis, a company linked to an ally of Vladimir Putin, the Russian president, is receiving revenues from Syrian oil wells in territory captured from Isis by a Russian private military contractor.

Fontanka, a Russian website, last year reported that mercenaries had secured deals under which they would receive a cut of income from oilfields they captured, but Mr Jawabra is the first official to confirm it.

"I don't know how many wells, and how big a cut they get," he said. "But there are others as well. It may be one model that helps get around the problem with the sanctions."

Note that the botched attack was on an oil facility. Thus, the Russian mercenaries in Syria need to capture oil to get paid. If you adjusted the labels on this mechanism (e.g. change "Russia" to "USA" and "Syria" to "Iraq), it might even be a scandal!

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