The SDF-led administration in northeast Syria has increased its oil sales to Kurdistan Region buyers, rising from roughly 5,000–7,000 barrels per day in August to nearly 20,000 per day. The surge follows Damascus’s decision in November to halt purchases of the heavily discounted crude, citing changes to the terms of the agreement.

Context: Oil from the Deir ez-Zor, Hasakah and Rmeilan fields is moved north by two main routes. Part of it is transported by tanker via the Fishkhabur–al-Walid corridor into the Kurdistan Region; another part is pumped through an informal short pipeline that runs from Rmeilan to the village of Mahmoudiya, one of the last settlement under KDP Peshmerga control before the line of control shifts to the Iraqi army farther south.

As of late 2025, around 20,000 barrels of oil a day are being sent from northeast Syria to the Kurdistan Region, up from roughly 4,000–7,500 barrels per day in August when the deal with Damascus was still active. Most of this crude is sold to the Lanaz refinery near Erbil, with the rest sold directly on the local markets of Erbil and Duhok. In recent years, the volume of oil exported from northeast Syria to the Kurdistan Region has fluctuated sharply – at one point reaching around 50,000 barrels per day, later dropping to about 7,000 – but is now hovering at roughly 20,000 barrels per day.

Analysis: What appears to be a minor rerouting of a modest oil flow carries far larger geopolitical weight.

Ahmad Yousef, the de facto finance minister of northeast Syria, told Al-Monitor that Damascus abruptly terminated the oil arrangement that had begun in February, when over 5,000 barrels per day started flowing to a refinery in Homs. The reason, according to Yousef: Saudi Arabia, al-Sharaa’s closest Arab ally, has been supplying Damascus with free oil since November. For an administration that derives roughly 75% of its revenue from oil, the sudden end of these sales is more than a commercial adjustment; it is a pressure tool in the bid to force the SDF-backed authorities into an integration with the Syrian army that the SDF sees as tantamount to “surrender.”

Yet the numbers tell a more revealing story. The surge in Kurdistan-bound exports – from around 7,000 barrels in August, when Damascus was still buying, to nearly 20,000 now – strongly suggests that much of the crude Damascus has stopped importing has simply been rerouted east. If exports to the KRI were only around 5,000–7,500 barrels per day in August, and now stand near 20,000 barrels per day at roughly the same $30 price, then the volume previously going to regime areas was almost certainly well above the nominal 5,000 barrels cited in the Homs deal. Instead of disappearing, those barrels now underpin a different set of power relations.

The infrastructure enabling this trade adds a layer of historical irony. One of the two main export routes is a short pipeline built in 1991, originally laid by Uday Saddam Hussein so Baghdad could quietly sell oil through Syria in defiance of international sanctions. Locals still call it “Uday’s pipeline.” A lifeline once engineered for Saddam’s survival now underpins a political economy binding northeast Syria’s fiscal health, KDP-linked commercial interests, and the bargaining strategies of Damascus and regional powers.

On the Iraqi side, the pipeline terminates at Mahmodiya—a frontline village since October 2017, when KDP Peshmerga forces, particularly the special brigades commanded by Mansour Barzani, repelled further Iraqi advances after Baghdad seized Sinjar and Zummar. Today, the oil arriving at Mahmodiya is handled by Ster Group, a conglomerate widely reported to be majority-owned by Masrour Barzani, the current KRG Prime Minister and Mansour’s elder brother. From there, trucks carry the crude to Sahela further north, then onward to the Lanaz refinery—a sprawling facility near Erbil that is also majority-owned by Mansour Barzani. More intriguing still, an estimated 49 percent of Lanaz is believed to be held by Turkish investors with close ties to Ankara’s ruling elite.

The nodes of this story thus converge in unexpected ways: a Damascus government, its energy needs now underwritten by Riyadh, terminates an oil deal to pressure the SDF economically and weaken its negotiating hand; the SDF responds by redirecting the same crude, at the same discounted price of roughly $30 per barrel, to the Kurdistan Region; and much of that oil ends up at a refinery nearly half-owned by Turkish investors aligned with a government that publicly seeks to diminish SDF influence vis-à-vis Damascus. For the Barzanis, the arrangement delivers both profit on heavily discounted crude and leverage over the SDF – and, indirectly, over Turkey itself.

A pipeline built for sanctions evasion, a refinery with Turkish shareholders, a Saudi-backed government in Damascus, and an autonomous Kurdish administration scrambling for revenue: what looks like a minor commercial adjustment is, in fact, a window into the dense web of interests shaping Syria’s fragmented future.