Executive Summary

In the wake of the Assad regime’s collapse, the Iranian government has faced domestic criticism over its massive expenditures to prop up the Syrian dictator, even as Iranians suffered economic hardship at home. Much remains unknown to the Iranian and Syrian public and the wider world about the extent of these expenditures and what Iran received economically in return. Did Iranian state actors, or the private sector, secure lucrative investments in exchange for the Syria intervention? How much money did Iran actually spend in Syria? What will happen to the Syrian debt file and Iran’s investments now that Assad has been deposed?

This report sheds light on the above questions, and others, by systematically mapping Iran’s economic activities in wartime Syria from 2011 to 2024. The report draws on five datasets: the database of the Observatory of Political and Economic Networks (OPEN), the Syrian and Iranian Gazettes – registers of government decisions that include new company incorporations – a series of documents leaked by two Iranian opposition hacktivist groups, and open source reports. The research team did not independently verify the authenticity of the leaked documents; where possible, it triangulated the information obtained from these documents with open source reports to corroborate findings. 

As follows are the report’s main findings:

Limited Iranian private sector involvement

Iran’s private sector did not meaningfully benefit from the Syrian intervention, as evidenced by a review of company registrations, trade figures, and public statements from Iranian officials and businessmen.

From 2011 to 2018, an average of five Iran-linked companies registered in Syria per year, as observed by the research team. This number jumped to an average of 51 observed company registrations between 2019 and 2021. That is, after the war appeared to have swung in the Syrian regime’s favour, there was a proliferation of Iran-linked companies registering in Syria. However, observed company registrations fell to an average of 11 between 2022 and 2023. Most of the newly registered companies referenced in this paragraph were in the private sector.

A number of factors may have contributed to the drop in company registrations in 2022 and 2023. Most importantly, potential investors who might have expected Syria to stabilise following Assad’s partial victory were instead faced with a Syria under Western sanctions, divided among multiple countries and armed groups, and characterised by lawlessness, a free-falling economy, and an uncertain outlook. 

In addition, throughout the conflict trade remained limited between Syria and Iran. From 2011 to 2022, Iran ranked as Syria’s 19th export market, and Syria’s 12th source of imports (according to official statistics which do not account for Iran’s exports of crude oil to Syria, provided at discount and on credit). Iranian officials and businessmen repeatedly complained to the media about their meagre share of commerce compared to other countries, despite otherwise strong ties. 

Massive expenditures to support Assad

The amount of money Iran spent during the conflict to aid the Assad regime remains unclear. However, Iranian officials’ public statements, credible estimates, and leaked documents indicate that expenditures range from US $30 billion to above $50 billion.

In June 2015, the office of then-UN Envoy to Syria, Staffan de Mistura, estimated Iran’s expenditures in Syria at $6 billion a year. Heshmatollah Falahatpisheh, former head of the Iranian parliament’s National Security and Foreign Policy Committee, has repeatedly stated Iran spent $20 to $30 billion in Syria. Following the Syrian regime’s collapse, former Iranian lawmaker Bahram Parsaei wrote that ‘Syria’s debt to Iran’ stood at $30 billion when he served in parliament from 2016 to 2020. 

Estimates of Iranian expenditures in the leaked documents range higher. One document purporting to be a memo prepared by the Iranian Foreign Ministry’s Middle East and North African desk, regarding a 2021 meeting of the Supreme National Security Council, estimated $50 billion since the conflict began, including more than $11 billion in oil.

IRGC-linked projects for partial debt repayment and strategic objectives 

During the conflict Iranian officials made public statements that Khatam al-Anbiya Construction Base, the Islamic Revolutionary Guard Corps’ (IRGC) main construction and engineering arm, was investing in Syria. Leaked documents indicate this organization oversaw investment projects in Homs phosphate mines, Oil Blocks 12 and 21 in Homs and Deir al-Zour, a new mobile carrier called Wafa Telecom, a Latakia port container scheme, and others.

Leaked documents indicate, and public statements by Syrian and Iranian officials confirm, that these investments were intended as debt repayment. One leaked document, purporting to be a letter to then-Vice President Mohammad Mokhber from his deputy, estimated income from these projects at $18 billion over a 50-year period.

In addition, leaked documents indicate these investment projects had strategic aims. For example, Oil Block 12 in Deir al-Zour reinforced Iran’s position along the Iraqi border near the American garrison at Al-Tanf. The Latakia port scheme was supposed to provide Iran access to the Mediterranean coast. As for the phosphate mines, it appears Iran was eyeing Syrian phosphates for use in its nuclear program – phosphate fertilisers can be used to extract uranium for weapons and nuclear power.

Regime delayed these investments, reflecting a deprioritization of Iranian interests 

According to the leaked documents, these IRGC-linked investments were beset by problems related to logistics, conflict conditions, lack of funding and interest, and sanctions. They were also beset by Syrian bureaucracy, with several documents outlining a pattern of delaying and complicating behaviour on the part of the Syrian government.

The authors note that Damascus had a track record from before the conflict began of procrastinating the implementation of economic projects with European, Arab, and Indian partners, among others. Nevertheless, the fact that so many of Iran’s important investment projects were delayed, diminished, or derailed by the Syrian government – including Oil Block 21, the Homs phosphate mines, Wafa Telecom, and the Latakia and Al Hamidia port projects – indicates a pattern.  The regime did not prioritize these investments, and in some instances appears to have blocked them.

The reasons why vary based on the project. In the case of Oil Block 21 and the phosphate mines, Damascus appeared to have given a portion of Tehran’s expected share to Moscow.

‘None of [these projects] have been implemented, ^[1] but Russia easily takes its demands from Syria… Iran incurred a lot of costs in the military and political fields in Syria and Iraq, but after these countries reach relative peace, Iran’s economic goals will not be met,’ Heshmatollah Falahatpisheh stated in May 2023. 

In the authors’ view, the Assad regime's sidelining of these investment projects reflects a deprioritization of Iranian interests that came into focus in the post-7 October period. During the Gaza and Lebanon wars, Assad rejected action in support of Iran’s Axis of Resistance in favor of building potential ties with Arab and Western states. Subsequently, as Assad’s regime crumbled, Tehran opted not to save him. Media reports following the regime’s fall indicate that immediate military considerations dictated this non-intervention, but perhaps the Syrian dictator’s earlier behavior influenced the decision as well.^[2]

Future of the debt file and IRGC-linked projects 

Iran’s expenditures in Syria are a sensitive domestic political issue, and Iranian officials have suggested Tehran will pursue its debts from the new Syrian government. 

However, this will prove difficult in practice. In the authors’ view, Syria’s new government will balk at the idea of repaying Iran for keeping Assad in power. The new Syrian administration is reportedly preparing a memo demanding Tehran compensate the Syrian people and state to the tune of $300 billion for its support of Assad. 

The new Syrian government would seemingly be in a strong position to repudiate its debts to Iran given the international support and recognition it has received. Furthermore, Tehran has little diplomatic or economic leverage over the new government by which it could enforce debt repayment, particularly as it already halted oil shipments to Syria following Assad’s fall. 

In addition, it appears Iran and Syria had yet to finalize an agreement to determine the amount of debt owed and the mechanisms for repayment before the Assad regime collapsed, which could complicate Iran's efforts to recover the debt. Leaked documents indicate the two countries had been trying to finalize a debt agreement since at least 2019.

In theory, Tehran may have a case for trying to enforce contracts for several of the IRGC-linked investments discussed above. The contracts for Oil Blocks 12 and 21 were promulgated into law in Syria, and it is likely the contract for the Homs phosphate mines was as well. 

On the other hand, Tehran has signalled it will try to build relations with the new Syrian government to preserve what influence it can in post-Assad Syria. Doing so may require it to write off Syria’s debts and the IRGC-linked investments. Alternatively, Iran may seek to negotiate limited debt repayment. Perhaps the new Syrian government would not reject this notion out of hand, as it would be a way to demonstrate its commitment to being a responsible State actor and reassure potential investors.

In sum, Tehran was struggling to recoup its debts and benefit from its IRGC-linked investments when Assad was in power, and the possibility of doing so now is more remote with his opponents ascendant. The extent to which Tehran pursues its debts and the implementation of the IRGC-linked projects will likely impact its relationship with the post-Assad Syrian state. 

Sectoral Analysis 

As follows are key findings related to Iran’s wartime involvement in various economic sectors in Syria from 2011 to 2024:

• Phosphates: Starting in 2017 Iran invested in the Khunayfis and al-Sawwanah (al-Sharqiya) mines in Homs, although there is conflicting information about the nature of Iranian versus Russian involvement in these mines. A purported Khatam al-Anbiya performance report indicated that Iran sold Syrian phosphates to ten different countries, with the lion’s share of phosphates heading to Iran.Numerous leaked documents indicate the Iranian company KMKA (Kimiya Maaden Kani Aazma)  sold Syrian phosphates to Italian and Iranian companies.

• Oil and gas: The research team reviewed the texts of two Syrian laws from 2020 giving Iran the right to complete exploration, development, and production in Blocks 21 and 12 in Homs and Deir al-Zour. However, Damascus appears to have handed over a portion of Block 21 to Russia. Block 12 had military value to Iran due to its proximity to the Iraqi border and the American base at Al-Tanf.

• Telecommunications: In February 2022, a third mobile phone operator was licensed in Syria, Wafa Telecom. Wafa was billed by authorities as owned by ‘national’ companies; however, an investigation by OPEN and the Organized Crime and Corruption Reporting Project (OCCRP) revealed in December 2022 that Wafa is partly owned by a Malaysian company linked to the IRGC. According to leaked documents, Tehran counted Wafa Telecom among its investment projects in Syria intended as debt repayment. The company’s launch was repeatedly delayed, with one leaked document referencing the Syrian partners of Wafa Telecom ‘repeatedly prolonging the negotiations regarding the text of the company’s articles of association.’

• Shipping and transportation: Leaked documents indicate Iran intended to establish a port at Al Hamidia, 20km south of the Tartous port, but this project was derailed by procrastination on the part of the Syrian government. Leaked documents further indicate that Iran was in discussions with the Syrian government to take over the management and operation of the container terminal at the Latakia port, until the Syrian government renewed the French company CMA-CGM’s contract to do so in 2019. The research team learned from an email correspondence with CMA-CGM that the company’s contract was renewed once again in 2024. In lieu of managing the container terminal, the leaked documents note Iran received a portion of the Latakia port’s revenue as debt repayment.

• Construction and real estate: Iran was widely reported in regional media to be building a zone of influence in the Sayyida Zeinab neighbourhood, including through the purchase of homes and shops, and the construction of hotels, mosques, and cultural centres.  Leaked documents indicate a project between KMKA, representing the Milad Group, and the IRGC’s Unit 18000 to build six residential blocks in the Sayyida Zeinab neighbourhood totalling 161 units. The documents also detail various small projects to develop the area.

• Trade: Despite the Free Trade Agreement signed between Iran and Syria in 2011, as well as other trade agreements, trade between Iran and Syria remained limited during the conflict. Iranian officials and businessmen repeatedly decried their country’s low share of trade with Syria.

• Tourism and culture: According to the Syrian Gazette, the Hajj and Visitation Organization in the Ministry of Islamic Guidance in Iran has a small stake in the Sayyida Zeinab Tourism and Visitation Company, a Syrian entity, which was established in 2016 in order to ‘establish, run, and invest in tourism complexes to accommodate visitors to the Sayyida Zeinab shrine in Damascus.’ Syrian and regional media have reported on Iran-linked entities investing in religious sites across the country in order to encourage religious tourism and convert residents of surrounding areas to Shia Islam.

To review the the full report, click here.

To review the Executive Summary of this report, click here.

To check the interactive network visualization, click here.