A new financing step for the supply of petroleum products in Syria was taken when the Central Bank of Syria issued its first letter of credit in 14 years. The letter of credit was opened to finance the Syrian Petroleum Company's supply agreement with Aramco.
According to the Central Bank's statement, the transaction created a new channel for the agreement between the Syrian Petroleum Company and Aramco to be conducted within commercial and banking rules. This established an official banking mechanism for financing and payments related to the supply process.
Coordination with a U.S. bank
The letter-of-credit transaction was carried out in coordination with a major U.S. bank whose name was not disclosed. The arrangement created the banking instrument needed to finance trade related to the supply of petroleum products and process the payments.
A letter of credit is a banking instrument that guarantees payment to the exporter for the goods once the agreed conditions have been met. This method facilitates the execution of international commercial transactions through official banking channels.
Ensuring the continuity of oil flows
The Central Bank of Syria prepared the banking channels needed to finance strategic trade and coordinated the documentation between the parties. The bank and the Syrian Petroleum Company are working on financial and documentary arrangements to facilitate the supply transactions.
The arrangements are intended to support the continuity of petroleum supplies and help meet the needs of the local market in Syria. The total value of the agreement, the volume of petroleum products to be supplied and the delivery date were not disclosed.
Syria rebuilds its banking ties
The Central Bank of Syria has recently taken steps to expand cooperation with regional and international banking institutions. The bank is also working to develop the regulatory and technical infrastructure of the financial sector.
The country's financial transactions were affected for years by isolation and sanctions resulting from the policies of the Bashar al-Assad government. On December 8, 2024, opposition forces led by Ahmed al-Sharaa toppled the Bashar al-Assad government.
The new letter-of-credit transaction was presented as part of Syria's efforts to conduct its commercial payments through official banking channels.
