The Biden administration has decided it will not renew a waiver that allowed a politically connected U.S. oil company to operate in northeast Syria under President Donald Trump's pledge to “keep the oil” produced in the region, according to a U.S. official familiar with the decision.
Treasury Department rules prohibit most U.S. companies from doing business in Syria. The waiver for Delta Crescent Energy was issued in April 2020, months after Trump announced that he wanted to keep some U.S. troops in the oil-rich region to maintain control of the oil profits.
Trump's “keep the oil” message was no longer U.S. foreign policy under the Biden administration, and using the U.S. military to facilitate Syrian oil production was deemed inappropriate, according to the official, who was not authorized to publicly discuss the decision and spoke on condition of anonymity.
The company was founded in 2019 by James Cain, U.S. ambassador to Denmark under President George W. Bush; James Reese, a retired Army Delta Force officer; and John Dorrier Jr., a former executive with United Kingdom-based Gulfsands Petroleum. Cain, a onetime executive with the NHL’s Carolina Hurricanes, has donated more than $30,000 to the Republican Party and GOP candidates over the years.
Northeastern Syria is the center for what remains of Syria’s oil industry. It is in shambles but remains one of the main sources of revenues for the Kurdish-led autonomous administration there.
Trump repeatedly spoke of keeping some U.S. troops in Syria to help “keep the oil" and “secure the oil," but his aides sought to dispel the idea the United States was trying to profit from the region's oil reserves. After DCE's license, from the Office of Foreign Assets Control, to operate became public last August, the State Department issued a statement in which it underscored that the “United States government does not own, control, or manage the oil resources in Syria."
Trump's comments about Syria's oil frustrated critics, and some allies, who said the loose talk fed into the narrative that American policy in the Middle East was driven by U.S. energy concerns and they argued it undercut U.S. diplomatic efforts to press for peace and stability in the region.
Dorrier, DCE's CEO, said the company had some $2 billion in contracts to sell oil into the international market that will benefit American allies in northeast Syria that have helped in the fight against the Islamic State group. He said Trump’s comments did not lead to the company winning the oil licensing agreement and that presidential orders issued during the Obama administration had invited U.S. companies to apply for licenses in agriculture, telecommunications and oil and gas in Syria.
“If the Biden Administration chooses not to renew the OFAC license, it will be a substantial change in policy that does not support Coalition Allies who fought and died to eliminate ISIS,” Dorrier said in a statement. “Depriving our Allies of the opportunity for sanctions relief on critical infrastructure as laid out by the Obama administration would, in effect, turn the North and East of Syria over to Russian, Regime and Iranian forces.”
Dorrier also said Trump’s “keep the oil” message “was hyperbole, not policy.”
The White House press office declined to comment about the decision, stating that as “a general matter” it does not comment on specific licenses, including to confirm whether one exists.
Biden administration officials, during a visit this month to northeast Syria, stressed to Kurdish administrators overseeing the area that the U.S. military presence was exclusively focused on preventing an IS resurgence, according to a State Department official who was not authorized the discuss the matter publicly and spoke on condition of anonymity.
The news site Al-Monitor was first to report of the administration's decision to end the waiver.
DCE said it has not received word from the Treasury Department that the license, which was set to expire at the end of April, will not be renewed. The department typically gives companies additional time to wind down operations, according to the U.S. official.
A former U.S. official familiar with the discussions said the administration has been communicating that it does not intend to renew the waiver but had not taken final action yet. This person was not authorized to publicly discuss the matter and spoke on condition of anonymity.
The Treasury Department did not respond to a request for comment.
The U.S. decision to allow an American company to refine and market oil was denounced by Syrian leader Bashar al-Assad’s government and ally Russia after it became public last August, not long after then-Secretary of State Mike Pompeo acknowledged during the a congressional hearing that the Kurdish-led administration in northeast Syria had come to an agreement with an American oil company.
Trump became focused on northeastern Syria’s oil in October 2019 after he abruptly announced his intention to draw down U.S. troops deployed against IS in the area.
At the time, Turkey’s president, Recep Tayyip Erdogan, had been pressing Trump to withdraw troops from the region. With his decision, Trump cleared the way for a Turkish military assault and effectively abandoned Kurdish fighters who fought alongside American forces in the yearslong battle to defeat IS militants in the region.
But when advisers floated the idea of keeping some troops in northeastern Syria to guard oil fields, it resonated with Trump. It also presented U.S. military commanders -- wary of entirely leaving the area -- with a way to keep some troops in place.
The area controlled by the Kurdish-led autonomous administration shrunk after Turkey's military offensive in northeast Syria in October 2019.
Then-Defense Secretary Mark Esper said at the time that the main goal of the American troop presence was to make sure the IS was contained and unable to gain control of the oil fields and the revenue they generated. The administration also saw some benefit to Kurds being in control of the oil.
Still, Trump repeatedly said in remarks to reporters and on his Twitter account that U.S. troops were staying in Syria to keep and protect northeast Syria’s deep oil reserves.
“We stayed back and kept the oil,” Trump told reporters in November 2019. “Other people can patrol the border of Syria ... and Turkey. Let them. They’ve been fighting for a thousand years. Let them do the border. We don’t want to do that. We want to bring our soldiers home. But we did leave soldiers because we’re keeping the oil. I like oil. We’re keeping the oil.”
Associated Press writer Eric Tucker in Washington contributed to this report.