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US President Donald Trump has announced plans to lift decades-old sanctions against Syria, signalling a dramatic reversal in US policy during a high-profile tour of the Gulf that has already yielded billions in investment deals.
Speaking at the US-Saudi Investment Forum in Riyadh, while acknowledging their purpose before the fall of Bashar al-Assad’s regime in December 2024, Trump described the sanctions as “brutal and crippling”. “It’s time to give them a chance at greatness,” he told business leaders.
Syria has been largely isolated from the global economy since 2011 when the most severe sanctions were imposed at the outbreak of the civil war. These measures froze assets of Syrian officials, banned petroleum products of Syrian origin, and effectively severed the country from international financial systems.
The EU took similar measures in February this year. Sanctions on key industries, including energy, oil, gas, and transport, were lifted; five financial entities were also delisted from entities subject to the freezing of funds and economic restrictions, thereby permitting the Central Bank of Syria to access these funds.
Syrian President Ahmed al-Sharaa said that Trump’s decision would “open a new chapter enabling the reconstruction of Syria, the revival of its economy, and contributing to achieving security and stability within it.”
Sanctions against Syria: A brief history
In 1979, Washington imposed the first sanctions against Syria after declaring the state a ‘sponsor of terrorism’. This was later expanded through the 2003 Syria Accountability Act.
The sanctions regime intensified dramatically after Bashar al-Assad’s violent crackdown on protesters in 2011, which prompted the Syrian Civil War. The Obama administration targetted petroleum imports to cripple Syria’s economic foundation. By 2019, the Caesar Syria Civilian Protection Act further tightened restrictions by targeting Syria’s Central Bank and imposing secondary sanctions on Russian and Iranian entities supporting the regime.
However, the al-Assad regime was toppled in December 2024, resulting in many economies relaxing sanctions. For instance, the US Office of Foreign Assets Control (OFAC) has already issued General License No. 24, allowing limited transactions with Syrian governing institutions (largely facilitating activities related to energy resources, personal remittances, and non-profit endeavours).
Regional players like Türkiye and Gulf nations are also showing increased interest in engaging with Syria’s new government; Turkish President Recep Tayyip Erdoğan joined the meeting between Trump, al-Sharaa, and Saudi Crown Prince Mohammed bin Salman by phone.
The high cost of isolation
From 2000 to 2010, Syria’s economy grew by over 5% per year. Now, sanctions have brought a protracted slowdown in economic activity, resulting in Syrian GDP contracting by more than 90%.
Despite their strategic aims, international sanctions have drawn criticism for their devastating humanitarian impact, restricting access to essential resources for ordinary Syrians. Syria’s domestic production suffered acutely during the Civil War, and the dynamics of the conflict supply chain have now come to the fore.
Arguably the world’s most politicised commodity, Syria’s oil output has plummeted from its pre-2011 position as the eastern Mediterranean’s leading energy producer. In 2011, it yielded over 380,000 barrels per day of oil and 300 million cubic feet daily of natural gas. Production fell to just 40,000 b/d under ISIS control by 2015 and further declined to 15,000-30,000 b/d by 2019 after Kurdish forces took over most fields.
Now heavily dependent on imports, particularly from Iran (which supplied 121,000 b/d in November) and Russia, Syria relies on domestic production for just 38.7% of its energy needs according to 2022 IEA figures.
Agriculture, once a key sector of the Syrian economy, also came under strain as a result of sanctions. Syria’s wheat production has collapsed to approximately 75% below pre-2011 levels, leading to widespread food insecurity affecting over 12 million people. Sanctions drove Syria to rely heavily on Russia for wheat imports, often at inflated prices: Syria paid $350 per tonne for Russian wheat when global prices were around $257. Sanctions also disrupted the import of essential agricultural inputs like fertilisers, further exacerbating food insecurity.
Still, despite large-scale imports, systemic corruption within the wheat supply chain has undermined distribution and stolen Ukrainian grain, worth an estimated $530 million, fuelled conflicts in both Syria and Ukraine.
Additionally, unilateral sanctions have critically undermined Syria’s energy infrastructure by preventing the procurement of essential spare parts for power plants and water distribution networks. Daily electricity production has plummeted from 9,500 to just 2,100 Megawatts, and many governorates receive only two to four hours of power daily.
Water distribution for both consumption and irrigation has severely deteriorated due to sanctions-related trade restrictions, over-compliance by foreign businesses, and reduced flow from the Euphrates River, resulting in dramatically reduced per capita drinking water supplies and irrigation capacity falling to just 20% of agricultural land.
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Trump’s Middle East tour has already yielded a $142 billion arms deal with Saudi Arabia and pledges of further investment that Crown Prince Mohammed bin Salman suggested could eventually reach $1 trillion.
A delegation of influential American business leaders, including Tesla CEO Elon Musk, OpenAI CEO Sam Altman, BlackRock CEO Larry Fink and Nvidia CEO Jensen Huang, accompanied Trump, indicating Syria’s commitment to diversifying its economy beyond oil. During the visit, Huang announced that Nvidia will sell more than 18,000 of its latest AI chips to Saudi company Humain.
The tour also includes stops in Qatar and the United Arab Emirates, with the latter having committed to investing $1.4 trillion in the US over the next decade.
Trump is also pursuing a potential breakthrough with Iran, claiming the US and Tehran are “getting close” to securing a deal that would see America drop longstanding sanctions in exchange for Iran abandoning nuclear weapons development.
With his Middle East initiatives, Trump appears to be doubling down on his transactional approach to foreign policy, prioritising economic partnerships and deal-making over traditional US positions on democracy and human rights in the region. However, the removal of sanctions are an absolute essential as the Syrian economy pieces itself together and begins to reestablish itself in the international trade arena.
