European importers of Syrian crude will need to source alternative supplies, which could indirectly affect U.S. sour crude markets. Recently, sour crude markets in Europe have shown exceptional strength, with prices for Russian Urals, one of the region's main sour crude streams, swinging to an unusual premium to those for light, sweet Brent. Following reduced loading programs at Russia's Baltic Sea port of Primorsk, a key Urals export terminal, the sanctions may further support this Urals premium. Sanctions targeting Syrian exports, however, may not necessarily disrupt Syrian crude production, which so far, in contrast with the situation in Libya, has been unaffected by civil unrest. Should Syria continue to produce crude, the effects of sanctions will be different than if that crude was taken off the market altogether. Syrian exports will likely find other markets, possibly in Asia, where they might help replace exports from Yemen disrupted by civil unrest.
While the situation in Syria raises many concerns, its direct implications for international oil markets are of a different order of magnitude than those surrounding the situation in Libya that was most recently reviewed last week.