The United States has removed Syria from its designation as a State Sponsor of Terrorism, granting the post-Assad government of Ahmed al-Sharaa another major vote of confidence as Washington seeks to consolidate the country’s break from Iran and reduce Tehran’s regional influence. The decision, announced on Monday, marks a significant change in the relationship between Washington and Damascus and could accelerate Syria’s reintegration into the global economy after more than a decade of civil conflict.
The designation had followed Syria for decades. It was first imposed under the Export Administration Act of 1979, after the Assad regime supported militant Palestinian factions including the Popular Front for the Liberation of Palestine and its radical offshoot, the Popular Front for the Liberation of Palestine – General Command. Although those secular, left-wing organisations were eventually displaced by Islamist movements such as Hamas, Syria remained on the terrorism list largely because of its active alignment with Iran and membership of the Iran-led “Axis of Resistance”. With Syria now removed, only Iran, Cuba and North Korea remain on the list.
The Soufan Center, which provided the assessment on the decision, describes the move as recognition of the crucial role Syria’s new government is expected to play in containing Iran over the long term. Washington’s calculation is rooted in the transformation of Syria’s strategic position following the collapse of the Assad regime. Iran has lost the secure overland route through Syria that previously allowed it to resupply Lebanese Hezbollah, its principal regional ally. Hezbollah is already under pressure from an Israeli military offensive and demands from the Beirut government that it disarm. For Washington, the weakening of that Iranian network gives Damascus importance far beyond its own borders.
The decision also demonstrates the extent to which strategic considerations are shaping Washington’s engagement with Sharaa’s government. The United States is effectively accepting significant complications surrounding the new authorities, including the continuing influence of Hayat Tahrir al-Sham, once an ally of al-Qaeda. At the same time as removing Syria from the State Sponsor of Terrorism designation, Washington removed HTS from a separate list of Specially Designated Global Terrorist organisations. HTS had previously been removed from the separate Foreign Terrorist Organizations list.
The shift has economic consequences as well. The removal of the terrorism designation eliminates a major barrier to private-sector investment and gives Syria greater access to parts of the international financial and economic system. The delisting opens the possibility of direct US foreign aid and sales of civilian goods that may have military applications, while also removing some of the financial restrictions associated with dealing with a terrorism-listed state. US Secretary of State Marco Rubio described the decision as an action that could unlock Syria’s economic revitalisation and promote its reintegration into the global economy.
The US Embassy in Damascus similarly presented the change as an opportunity for Syrians to rebuild after years of war, describing the previous designation as a wall separating the Syrian people from the investments, projects and opportunities needed to reconstruct their country. Combined with sanctions relief already provided by Washington, the removal from the terrorism list is expected to reduce some of the remaining concerns among foreign investors about doing business with the Sharaa government.
Energy is central to the calculation. Washington wants the delisting to support efforts to restore Syria’s damaged oil sector and advance discussions between Baghdad and Damascus over the reconstruction of a pipeline carrying Iraqi oil to the Syrian Mediterranean port of Baniyas. If restored, the route could provide Iraq with an alternative export channel while generating revenue for Damascus. It could also contribute to reducing Iranian leverage associated with the Strait of Hormuz by creating a trans-Syria route to the Mediterranean.
The pipeline is not a new project. According to Syrian state news agency SANA, the line dates to 1952 and was taken out of service in 2003 after being damaged during the US invasion of Iraq. It had also been shut down by the regime of Hafez al-Assad during the 1980-88 Iran-Iraq war in an effort to weaken Baghdad’s war effort against Assad’s ally, Tehran. Security concerns, including threats from Islamic State cells in western Iraq and eastern Syria, had previously prevented serious consideration of restoring the route.
The scale of the proposed project is considerable. Syrian Petroleum Company CEO Youssef Qablawi has described restoration as “a vital project”, estimating the pipeline’s capacity at between 1.5 million and 2 million barrels a day. Syria currently produces about 100,000 barrels a day, with production projected to reach 250,000 by the end of next year and a target of 1,000,000 barrels a day by 2030. Major US company Chevron is studying the feasibility of reconstruction. For now, Iraq has resorted to stopgap measures including transporting fuel oil by truck to Baniyas, but these cannot substitute for pipeline-scale exports. Reconstruction is expected to take four years and cost at least $15 billion, meaning the project cannot provide Washington with an immediate instrument against Iran.
The economic opening also intersects with a larger struggle over Syria’s sovereignty. The civil war left the country divided among competing external powers, with Iran, Türkiye, Russia and the United States supporting different local partners and maintaining different spheres of influence. Iran has been pushed out, and US troops have withdrawn from the eastern desert, while Russia’s influence has diminished. Yet external competition has not disappeared.
Russia, once the principal international supporter of the Assad regime, remains present through a reduced military footprint. An agreement announced on August 9 gives Syria control of civilian facilities at the Hmeimim airbase and the commercial section of the port of Tartus, while those facilities are to be transformed into joint Russian-Syrian training centres. The arrangement reduces Moscow’s previous position without ending its presence.
The more immediate challenge comes from the competing ambitions of Türkiye and Israel. Türkiye, Sharaa’s principal backer against Assad, is using its influence to expand its military presence and strengthen its regional position. Israel, meanwhile, has adopted a posture since the October 7, 2023 Hamas attack centred on controlling buffer zones in neighbouring countries and territories to prevent potentially hostile forces from approaching its borders. Their competing interests have already brought the two US allies into direct tension inside Syria.
Last week, Israeli aircraft struck the Abu al-Duhur military air base in northwestern Syria. Israeli Prime Minister Benjamin Netanyahu said the base was targeted because of concerns that Türkiye intended to establish air-defence radars and attack drones there. US Ambassador to Türkiye and Special Envoy for Syria and Iraq Tom Barrack disputed the claim that Türkiye intended to use the base, signalling Washington’s concern about an escalation between the two regional powers.
The subsequent diplomatic manoeuvring showed the leverage Washington still retains. At the US’s behest, Israel sent Mossad chief Roman Gofman to Jordan on Sunday for an unprecedented US-brokered meeting with Syrian foreign minister Asaad al-Shaibani. The meeting represented a positive engagement, but it remained unclear whether it would produce changes in the policies of Türkiye, Syria, Israel or the United States.
The strategic bargain, however, carries another complication. Sharaa’s government has failed to fulfil pledges to expel at least 5,000 Islamist foreign fighters who helped HTS overthrow the Assad regime in December 2024. Foreign fighters and HTS members incorporated into Syria’s security forces have been accused in the assessment of committing significant human rights abuses, including extrajudicial killings of members of minority groups perceived as opposing the new government, particularly Alawites.
The treatment of Syria’s Kurdish population presents another test. Sharaa’s January offensive captured territory held by the Kurd-dominated Syrian Democratic Forces, a key US partner in the fight against Islamic State. On Tuesday, SDF commander Mazloum Abdi announced the formal dissolution of the force as an independent military organisation. Washington has sought to portray the integration as compatible with Kurdish rights, with Ambassador Barrack praising the Sharaa government for recognising the Kurdish language in education and other concessions.
The US decision therefore represents more than the removal of an old designation. It is a strategic wager that a stronger, economically viable Damascus can serve American interests by weakening Iran, opening new energy routes and reducing the space for competing powers to dominate Syria. Yet the same policy requires Washington to manage the ambitions of Türkiye and Israel, maintain pressure on questions of sovereignty and minority rights, and navigate the unresolved legacy of armed groups now incorporated into the Syrian state. Syria’s removal from the terrorism list may open its doors to the world, but the balance between strategic partnership, economic reconstruction and political accountability remains central to what comes next.
