Opinion: Syria Owes Iran 30 Billion That Will Never Be Paid Back.

Iran's USD 30 billion bet on Syria and its unresolved USD 1 trillion claim against Iraq highlight the rising cost of its regional ambitions as home anger builds.

Syria's debt to Iran is estimated at $30 billion. This statistic, obtained from the Iranian Presidency Office, was leaked in August of 2023. It represents the cost Iran has spent since 2011 to keep Assad in power. The repayment of this large debt is all the more unlikely considering that those now in control in Syria have a profound and lasting animosity toward the Islamic Republic for its near-unconditional backing for the former ruler.

It should be remembered that Iran has yet to retrieve the USD 1 trillion due by Iraq for reparations resulting from Saddam Hussein's horrific eight-year war in 1980. Nonetheless, the two countries today have positive relations, with bilateral trade steadily expanding over the last decade. Nonetheless, Iran has received none of its funds, whereas Kuwait has successfully collected the USD 50 billion Iraq owed it for the 1990 invasion. Clearly, Iran pays the price for a lack of foreign backing and networks, from which Kuwait benefits significantly.

Trade and economic relations between Iran and Syria were diverse, encompassing — until Assad's demise — sectors such as energy, industrial goods, vehicles, arms, petrochemicals, construction materials, financial investments, and significant cash flows brought into Syria by Iranian pilgrims visiting sacred Shiite sites near Damascus. Over 14 years, Iran exported an average of 60,000 barrels of oil per day to Syria. At USD 50 per barrel, Syria owes USD 1 billion every year, a total of USD 14 billion since 2011. For example, on December 8, an Iranian supertanker carrying 750,000 barrels was forced to turn back in the Gulf of Suez due to strikes by "rebels" at the time.

Now that they are in control, these rebels are unlikely to honor the country's debts. Despite this, Iranian authorities were already concerned and doubtful about collecting their assets under Assad. This is why they expanded their agreements and contracts with him across a wide range of industries in order to ensure a return on their investment.In September 2022, the two countries inked a huge pact including eight projects, with Damascus paying Tehran USD 18 billion. Iran was scheduled to invest $1 billion and collect $18 billion over the course of 50 years. Another pact gave Iran control of the Syrian port of Tartus for 49 years, with an automatic renewal for another 49 until 2093.On November 13, 2024, just one month before Assad fled, the Iranian Parliament passed a bill creating the absolute liberalisation of trade with Syria, with the hopes of capturing the lion's share of the country's reconstruction.

To that purpose, Iran sent not only military advisors to Syria, but also skilled personnel similar to missi dominici, who facilitated commerce transactions and monitored bilateral agreements. Some sources suggest that there are currently 10,000 Iranian officials in Syria, whose destiny is unknown. This confusing position is exacerbated by the fact that these significant expenditures — the majority of which are for civilian projects in Syria — are actually funded from Iran's military budget as part of "advanced security" agreements between the two nations.

Popular resentment, which Iranian authorities had long overlooked, was evident even before Assad's fall, with several media sources constantly voicing displeasure at these monies being diverted from the country's struggling economy. Today, an increasing number of national and local political leaders are publicly criticizing this approach, with Syria's USD 30 billion debt accounting for more than 10% of Iran's GDP.