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01-08-13

Syria gets USD3.6b credit line from Iran to buy oil products

(MENAFN) Iran has agreed to grant Syria USD3.6 billion credit facility to help it buy oil products to shore up President Bashar Al Assad's war battered economy, Reuters reported. The deal, which was agreed in May and will allow Iran to acquire equity stakes in investments in Syria, is part of Iran's broader support for Assad in his battle against two-year insurgents. Syria is short of diesel for its army and fuel to keep the economy running, partly because of US and European Union financial sanctions imposed after the crackdown on protests at the start of the crisis. Its main supplier of petroleum products by sea has been Iran. Tehran has already given Damascus USD1 billion credit line in order to buy Iranian power generating products and other goods in a barter arrangement that has helped Syria export textiles, phosphates and some agricultural produce such as olive oil and citrus products, trade officials say. Also, Syria has been in talks for months to secure a loan of up to USD2 billion with low interest and a long grace period, a trade official said. Syria's economy has been hurt by depletion of foreign reserves that were estimated at around USD16 billion-USD18 billion before the crisis. The country had been earning some USD2.5 billion a year from oil exports before the crisis. The ongoing war and sanctions has forced Syria to rely increasingly on new credit lines from its main allies. Russia, Iraq and China have provided support, sometimes in the form of barter deals, but not on the scale of this week's deal with Tehran.

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