AGP Executive Report

Eastern Syria Economy Under Strain: Protesters in Syria’s Jazira region blocked fuel-tanker routes near al-Hol, citing worsening living conditions and frustration with slow government-SDF integration after the Jan. 29 deal, with residents linking economic hardship to lingering administrative uncertainty. Aviation Disruptions: Syria extended southern air-corridor closures and kept Damascus International Airport suspended, rerouting flights to Aleppo as regional Iran-Israel tensions triggered emergency airspace restrictions across Iraq and Syria. Energy and Trade Pressure: Israel struck Iran’s Mahshahr petrochemical facility, while the Hormuz risk is pushing up shipping costs—spot container rates Asia-to-U.S. West Coast jumped sharply—adding new pressure to regional logistics and prices. Syria’s Leadership Signal: U.S. President Donald Trump praised Syria’s new leadership under Ahmad al-Sharaa, saying Washington eased sanctions and that Syria is “cleaning up” its act, with potential support for broader regional security efforts. Türkiye-Syria Trade Push: A Gaziantep-Aleppo summit in Gaziantep on June 9 will focus on reviving Türkiye-Syria trade, logistics, and production links, including ideas for regulated border production zones.

Middle East Security & Trade Risk: Iran launched missiles at Israel for the first time since an April ceasefire, after Israel struck Beirut’s southern suburbs; Israel says it intercepted the barrages but warned its defenses aren’t “hermetic,” while Iran framed the move as a “warning” tied to Lebanon and warned of continued attacks if Israel doesn’t stop. Lebanon Cross-Border Shock: The Beirut strike killed two and wounded 20, and the wider escalation threat is likely to keep aviation, logistics, and insurance costs elevated across the region. Iraq–Syria–Turkey Energy Corridor: Iraq is planning to boost oil exports via pipelines and overland routes through Syria and Turkey to about 650,000 bpd, with Kirkuk flows rising toward Ceyhan and additional transport capacity planned. Syria Economy & Governance: Syria’s foreign chief visited Algeria to boost bilateral cooperation, while separate reporting points to ongoing efforts to revive tourism and infrastructure—signals of recovery priorities despite instability. Water & Food Security: Raqqa floods have reignited debate over Euphrates management and who controls releases, with farmland damage and displacement reported.

Hormuz Shock to Gulf Trade: Iraq’s foreign minister warns Baghdad is “printing cash” to cover salary gaps as oil export revenues plunge under Strait of Hormuz disruptions, calling a prolonged conflict a “financial catastrophe.” OPEC+ Output vs. Export Reality: Despite expectations of a July output increase, Iraq faces tougher delivery constraints, pushing plans to expand exports via Turkey’s Ceyhan pipeline and routes toward Jordan and Syria. World Bank Roads Push: The World Bank backs a $900m Iraq road-infrastructure upgrade aimed at boosting transport corridors, safety, and private-sector opportunities—key for trade and regional integration. US Considers Frozen-Iran Assets for Reconstruction: Reuters reports Washington is weighing redirecting Iranian assets to fund reconstruction and compensate Gulf damages, as tensions and drone/missile exchanges continue. Syria-Tied Connectivity Plans: Türkiye’s Hejaz Railway modernization is set to link to Aleppo and eventually Oman, positioning Syria-area corridors as part of an alternative trade route away from Hormuz risk. Lebanon Airport Revival: Lebanon starts rehabilitation of Qlayaat’s Rene Mouawad Airport to open within months, a move that could ease pressure on Beirut’s airport amid ongoing security threats. Humanitarian Supply Chain Detours: WFP says fortified biscuits for Afghanistan were rerouted through nine countries after border closures and Hormuz disruptions, underscoring how regional shocks hit food logistics. QRCS Eid Aid Reaches Syria: Qatar Red Crescent’s Eid al-Adha campaign delivered aid to 247,344 beneficiaries across 14 countries including Syria, highlighting continued cross-border humanitarian flows.

Tourism & Investment: Libya’s envoy to Syria, Walid Ammar, met Syria’s tourism minister Mazen al-Salhani in Damascus to revive past tourism agreements and expand cooperation, including training, support for handicrafts, and joint projects. Diplomacy: Egypt appears to be moving toward approving a new Syrian ambassador nominee after reservations delayed earlier acceptance, with Mohammad Taha Al-Ahmad named as the latest candidate. Ports & Trade: Syria’s Latakia port handled over 2 million tons of cargo in the first five months of 2026, with 273 vessels and about 120,000 containers, citing modernization and faster customs procedures. Aviation & Connectivity: Lebanon kicked off rehabilitation of Rene Mouawad Airport in Qlayaat to open as the country’s second civilian airport within months, aiming to serve routes including Istanbul and Dubai and reduce pressure on Beirut’s airport. Humanitarian Supply Chains: WFP says fortified biscuits reached Afghanistan after a 15,000-km detour through nine countries due to border closures and Strait of Hormuz disruptions. Regional Finance: Amman Chamber of Commerce reported a 24.1% rise in export certificates of origin value to 624 million dinars in five months, with Syria among key destinations.

Port & Trade: Latakia Port handled over 2 million tons of cargo and containerized goods in the first five months of the year, moving through 273 vessels and about 120,000 containers, as modernization efforts streamline customs and speed up turnaround times. Business & Recovery: Syria is pushing for “bankable projects” and a clearer economic identity as recovery planning shifts toward “partnership” rather than privatization, aiming to attract foreign investment. Currency & Daily Economics: With local currencies under strain, more people are turning to the dollar as trust erodes—an economic pressure that hits vendors, pricing, and household purchasing power. Regional Finance: The World Bank approved a $900m package for Iraq and the Kurdistan Region to upgrade road corridors linking Baghdad with Turkey, Syria, and Jordan, targeting safer transport and better trade access for businesses and communities. Security & Cross-Border Risk: Reports say Israeli forces shelled areas in southern Syria’s Daraa countryside and briefly advanced near farmland, underscoring ongoing sovereignty violations that can disrupt local economic activity.

World Bank Infrastructure Push: The World Bank approved a $900m package to upgrade Iraq and the Kurdistan Region’s road network, targeting two main corridors linking Baghdad to Turkey (E2/E1 routes) and to Syria and Jordan, aiming to improve safety, reliability, and trade while benefiting about 7.9–8 million people. Syrian Power & Prices in Court: Syria’s Civil Court dismissed a lawsuit challenging electricity price hikes, citing procedural grounds and lack of jurisdiction, leaving consumers’ complaints over affordability unresolved. Captagon Crackdown: Anti-narcotics units in Syria carried out raids and seized Captagon pills as the government pushes back against the drug trade that helped fund the former Assad regime. Syria-Economy Angle: Coverage also points to Syria’s push to attract investment through “bankable projects” and broader recovery planning, as well as efforts to boost tourism and airspace activity amid regional disruption. Regional Risk Signals: The U.S. Embassy in Jerusalem issued a security alert urging Americans to reconsider travel to Iran, Iraq, Lebanon, Syria, Gaza and Yemen (Level 4) and to exercise extra caution across much of the Middle East (Level 3).

Syria–Algeria Diplomacy: Syria’s foreign chief Asaad Al-Shaibani met Algeria’s President Abdelmadjid Tebboune to push cooperation in energy, economy, investment, and security, with plans to reactivate a joint high committee and a Syria–Algeria business council. Syria Currency Update: Syria’s Central Bank extended the deadline again for exchanging old banknotes into the new Syrian lira, saying the process is 63% complete, while economists warn the repeated extensions show monetary transition strain and weak recovery of old notes. Finance & Payments in Syria: Reports say Visa and Mastercard restarted business in Syria, a move that could improve card payments and merchant access as the country’s recovery efforts continue. Trade & Logistics: Turkey is discussing reviving the Hejaz Railway and extending it toward Oman as an alternative corridor to the Strait of Hormuz, with the Damascus–Amman link mentioned as potentially reactivatable—an angle that matters for regional trade routes and Syria’s connectivity. Business Risk Watch: A major cyber-fraud case in India involved accounts tied to a bank in the name of a firm, highlighting how financial fraud networks keep evolving—relevant for regional compliance and bank controls.

Syria’s economic reset: Damascus is moving from privatization toward a “strategic partnership” model, elevating the private sector as the “engine of economic development” and framing the state as a regulator and guarantor as recovery and reconstruction ramp up. Central banking discipline: Syrian Central Bank Governor Mohammad Safwat Raslan said the next phase will be based on institutional work and coordination, ruling out improvised decisions as the banking sector dialogue continues. Sanctions and delisting pressure: Syrian President Ahmed al-Sharaa told Trump that lifting sanctions is key to reviving the economy, while the remaining U.S. State Sponsor of Terrorism designation is still a major blocker for finance and aid. Tourism push: Damascus announced a new Tourism Police Unit to guide visitors and secure routes, alongside hotel and heritage-site rehabilitation plans. Private-sector momentum: The National Private Sector Dialogue in Damascus signaled a new economic identity for Syria’s recovery, with UNDP support and a focus on investment and value-chain reconnection. Regional trade corridor idea: Turkey is discussing reviving the Hejaz Railway and extending it toward Oman, with the Damascus–Amman link highlighted as part of an alternative route to Hormuz. Security transition concerns: OPCW inspectors reported newly uncovered hidden chemical weapons materials in Syria, adding pressure to manage a fragile, shifting security landscape.

Syria’s water crunch: A Syrian hydrologist warns that hundreds of thousands of illegal wells are worsening the country’s water “catastrophe,” draining aquifers and drying springs—an issue that matters for both farming and energy output along the Euphrates. Damascus business push: Syria’s National Private Sector Conference opened in Damascus, signaling a push for a new economic vision and more investment-ready projects. Regional trade corridor plans: Türkiye is planning to modernize and extend the Hejaz Railway, starting with a link to Aleppo in Syria, aiming to build an alternative route to reduce reliance on the Strait of Hormuz. Lebanon airport revival (spillover for Syria logistics): A new civilian airport is expected from the Lebanese Army’s Qlayaat base, with redevelopment plans that could reshape northern Lebanon’s connectivity for regional commerce. Sanctions & reconstruction talks: Reports say Syria’s al-Sharaa and Trump discussed lifting remaining sanctions and reconstruction in phone calls, keeping economic recovery on the agenda. Oil & gas activity: Coverage notes activity ramping up in Syria’s oil and gas sector, alongside broader efforts to expand export routes.

Syria Tourism Push: Syria has set up a Tourism Police unit to guide visitors and secure routes to designated attractions, as Damascus looks to revive tourism after years of war and economic strain. Damascus Market Activity: Two large deals lifted trading on the Damascus Securities Exchange on June 3, pushing total turnover to about SYP80.8mn across 296 transactions. Oil & Gas Momentum (Regional Spillover): Activity is ramping up across the oil and gas corridor tied to the Strait of Hormuz disruption, with Iraq moving to expand exports via Turkey’s Ceyhan and using Syria-linked routes. Iraq Export Diversification: Iraq’s cabinet approved a major jump in pipeline exports toward Ceyhan, aiming to raise shipments to as much as 770,000 bpd within weeks, while also directing Kurdistan producers to resume operations. Sanctions Relief Talks (Syria): Syria’s leadership discussed sanctions relief and reconstruction with Trump, signaling continued efforts to unlock investment and restart the economy. Flood Impact on Eastern Syria: Euphrates flooding damaged farmland and forced emergency response and displacement in Deir ez-Zor, adding pressure to recovery and livelihoods. Security & Governance: Syria’s broader economic recovery agenda is also being shaped by security measures and governance steps, including new institutional moves like the tourism unit.

Syrian Private Sector Push: Syria’s National Private Sector Conference opened in Damascus, with the Economy Ministry, UNDP and Japan backing a new public-private cooperation model aimed at investment, recovery and a better business climate. Reconstruction & Investment Framing: In the same push, officials stressed Syria’s “historic juncture,” calling for “bankable projects” and leveraging the country’s geography to attract global markets. Food Security Pressure: Wheat farmers protested government procurement prices, arguing $330/tonne fails to cover input costs as the Syrian pound slides—raising fresh questions about how far liberalization can go in a politically sensitive staple. Regional Trade Routes: Turkey discussed reviving a Gulf transport corridor via Syria and Jordan, signaling renewed interest in logistics links that could matter for Syrian trade corridors. Russia’s Syria Resupply: The Wall Street Journal reported Russia resumed resupplying its Syria bases after Assad’s fall, underscoring continued strategic leverage at Tartus and Hmeimim. Damascus Airspace Revenue: Reporting suggests the Iran-Israel conflict is boosting Syria’s airspace-related revenues as airlines reroute.

Private Sector Push: Syria’s government hosted a National Conference for Dialogue with the Syrian Private Sector in Damascus, with finance, transport and agriculture ministers meeting businesspeople and UNDP/Japan partners to map a post-war growth phase as reconstruction needs are estimated at about $216bn. Sanctions Relief Bid: Syria’s leadership is pressing Washington to lift remaining hurdles, including the long-standing state sponsor of terrorism designation, arguing it blocks investment and slows economic recovery. Food Security Tension: Wheat farmers across Syria are protesting government procurement prices after the Economy Ministry set $330/ton, saying it won’t cover costs amid currency swings—raising pressure to liberalize parts of the wheat-flour-bread chain. Water Shock in Deir Ezzor: Euphrates flooding damaged farmland and water infrastructure in eastern Syria, submerging 16,870 dunums and knocking out 83 water stations, with some repairs already underway. Refugee Funding Crunch: WFP suspended food assistance for 135,000 Syrian refugees in Jordan host communities due to a funding shortfall, while UNHCR reported 196,000 voluntary returns from Jordan since Dec 2024. Regional Trade Route Talk: Turkey’s FM said talks aim to revive a transport corridor linking Turkey, Syria and Jordan to Saudi Arabia and Gulf markets to cut shipping costs and boost trade.

Sanctions & Reconstruction: Syrian Transitional President Ahmad al-Sharaa told Donald Trump that lifting the remaining U.S. sanctions is “crucial” to restart the economy, unlock investment, and improve living standards, with both leaders also discussing regional security and the need to prioritize diplomacy. Central Bank Currency Move: Syria’s central bank extended the deadline for exchanging Syrian currency to end-July, a sign of continued efforts to stabilize payments and liquidity. Floods Hit Eastern Syria Farms: Euphrates flooding after heavy rainfall and increased flows from Turkey damaged farmland and homes in Deir ez-Zor and Raqqa, disrupting irrigation and drinking-water pumping and forcing families to flee. Energy Trade Signal: Azerbaijan’s SOCAR chief said Azerbaijan will keep expanding gas supplies and noted Syria has recently joined its export list, positioning gas deliveries as a stability factor. Investment Climate Push: A former Jordanian planning minister said Syria needs predictable laws, clear regulations, and “bankable projects” to convert reconstruction interest into real foreign investment. Legal Accountability: A Vienna court began hearing a universal-jurisdiction case against a former Syrian general accused of torture and other abuses from 2011-2013.

Lebanon Ceasefire Talks: Lebanon’s US embassy says Hezbollah accepted a US proposal for “mutual cessation of attacks,” with Israeli strikes on Beirut’s southern suburbs to stop if Hezbollah refrains from attacks, and talks set to continue in coming days. Humanitarian Pressure: The UN World Food Programme warns Lebanon’s displacement crisis is deepening, with over a million people still displaced and food prices and lost incomes pushing assistance out of reach. Syrian Reconstruction & Sanctions: Reports say Trump and Syria’s al-Sharaa discussed sanctions relief and reconstruction in phone calls, as Washington also signals continued pressure on Syria. Trade Signals: Jordan’s industry minister says exports rose to JD 2.129 billion in Q1 2026, citing gains to Syria and broader market access. Regional Energy Moves: Turkey’s Erdoğan highlights gas supplies to Syria as supporting stability, while Azerbaijan’s energy diplomacy at Baku Energy Week points to expanding electricity and gas links across the region. Security-Driven Markets: Analysts flag how renewed Lebanon fighting and wider Middle East instability can spill into shipping, energy costs, and regional economic planning.

Sanctions & Reconstruction Talks: Syrian President Ahmed al-Sharaa spoke by phone with US President Donald Trump, urging lifting remaining US sanctions as a “fundamental step” to restart Syria’s economy and reconstruction, while Trump stressed stability and prioritized diplomacy. US Diplomatic Moves: Trump also expanded the role of Tom Barrack—keeping him as US ambassador to Türkiye while adding special envoy responsibilities for Syria and Iraq, signaling deeper engagement as Syria’s transition continues. Currency Policy: Syria’s central bank extended the currency exchange deadline to end-July, a move aimed at easing pressure in FX markets. Flood Response & Water Stress: Euphrates flooding receded in eastern Syria, but emergency response continued as thousands were displaced and farmland damaged; separately, Syria warned of consequences from reduced Euphrates flows after Turkey cut water supplies. Southern Syria Security: Israeli forces carried out fresh ground incursions into Quneitra and Daraa, setting up temporary checkpoints and searching residents and vehicles.

Sanctions & investment push: Syrian President Ahmed al-Sharaa spoke by phone with Donald Trump, urging the lifting of remaining U.S. sanctions as “essential” to revive the economy, unlock investment and speed up reconstruction, while both sides stressed diplomacy to prevent escalation. Envoy reshuffle: Trump expanded Tom Barrack’s mandate, keeping him as U.S. ambassador to Turkey while naming him Special Presidential Envoy to Syria and Iraq, after Rubio said his Syria envoy title had ended—signaling deeper U.S. engagement on regional files. Currency reform: Syria’s central bank extended the deadline for exchanging old banknotes by 30 days to end-June/July 1 start, aiming to keep the redenomination process moving and support financial stability. Floods hit eastern Syria: Euphrates flooding in Raqqa and Deir ez-Zor is receding after emergency response, but the episode damaged farmland and homes and raised fresh questions about water management. Regional security spillover: Israel’s ground push in Lebanon widened, with reports of the capture of Beaufort Castle and instructions to expand the incursion, underscoring continued volatility around Syria’s borders.