|
How
Islamic State uses captured oil fields to finance
its campaign
By Mark Gollom - CBC News
|
|
|
An oil jack pumps oil in the Al-Jbessa oil field in
Syria. The Islamic State, or ISIS, has taken over
large sections of Syria and Iraq, and controls as
many as 11 oil fields in both countries. Photo:
Reuters /Ekurd.net
•
See Related Articles
September 26, 2014
To finance its militant campaign in Iraq and Syria,
ISIS has relied heavily on the revenue it generates
from captured oil fields, some of which are now
being targeted by U.S.-led airstrikes.
ISIS oil production has been estimated at tens of
thousands of barrels a day, and generates between $1
and $3 million a day of revenue, analysts say. But
the challenge for the militant group, which is said
to control at least 11 oil fields, is finding buyers
for its product.
"No big traders, no serious companies are going to
fool around with that oil," says Matthew M. Reed,
vice-president of Foreign Reports, a
Washington-based consulting firm that analyzes oil
and politics in the Middle East. "That oil is
essentially radioactive at this point. No one wants
to touch it."
What that means is that the vast bulk of ISIS's oil
sales is going to so-called "middlemen," who own
their own tanker trucks and who have connections to
established smuggling networks in northern Syria and
southern Turkey, or to local refineries in places
like Syria, Iraq, Kurdistan and Turkey.
"They're relying on very small transactions and a
lot of them in order to move the oil because they're
selling it by tanker truck more often than not. And
a tanker truck can't hold that much oil," Reed said.
Robin Mills, a Dubai-based energy consultant and the
author of two books on the politics of oil, said
that these rogue tankers will fill up at the fields
and cross the border at smuggling points.
"This is a long, established smuggling trade that's
gone on for many years," Mills told CBC's The
Current.
Refined oil being used in
places fighting ISIS
ISIS is also refining some of this oil itself and
selling the product in the local market. As well,
the group is using some it to supply its own war
effort, Reed said.
"There's good reason to believe that the refined
product coming from ISIS oil is actually being used
in places that are fighting ISIS," he added.
And that includes the groups's sworn enemy, the
regime of Syrian President Bashar al-Assad, which is
probably getting oil either directly or indirectly
from ISIS-controlled fields or territories.
"The regime in Damascus has pulled its punches with
ISIS from the beginning in order to promote the idea
that all of Assad's enemies are terrorists," Reed
said. "So if you allow ISIS to flourish and then
ISIS in return also gives you breathing space —
let's say it allows oil to pass through its
territory, allows refineries they could cut off to
keep operating under regime control — it benefits
both sides."
ISIS is said to control a few smaller fields in
northern Iraq but most of its oil comes from eastern
Syria, where it has undisputed control of most of
that territory.
However, international companies that were operating
those fields have since fled the region, Mills said,
and while ISIS has had some success attracting oil
engineers, "production is far below what it used to
be."
Working on skeleton staff
Most estimates place oil production in the
ISIS-controlled parts of Iraq and Syria at around
80,000 barrels a day, but that is a sharp decline
from pre-conflict days. In Iraq for example, those
same assets would have produced around 220,000
barrels a day, Luay al-Khatteeb, founder and
director of the Iraq Energy Institute, told CNN.
"In a lot of these places it sounds like they're
working on skeleton staffs of engineers and others
who are able to run the refineries," Reed said.
"Some of those people are just doing it to keep
their jobs, others certainly are under threat. They
have been told they have to show up."
The oil is also being sold at a steep discount, in
some cases as low as $25 a barrel. But that is still
a price that allows ISIS to generate up to $3
million dollars a day, some analysts say.
Carjackings, bank robberies, extortion, kidnappings
for ransom are also used to fund its organization.
But Reed said there seems to be a general agreement
that oil is the numberwww.Ekurd.net
one revenue stream for them.
"It's the only thing they have to sell, really, and
you can only steal so much from the people."
He said it's too early to tell what impact the
recent U.S.-led airstrike on at least four oil
installations and three oil fields controlled by
ISIS will have on their operations or revenue.
But al-Khatteeb told CNN that the impact of these
strikes is "going to be immense and grave."
"If they are hitting the facilities and the oil
convoys on the smuggling roads they will
significantly disrupt supply and regular production.
If the bombardments continue it will impact the
energy supply and deny ISIS much-needed fuel for
their mobility and the servicing of the communities
under their rule."
Copyright ©, respective author or news agency,
cbc.ca
Top |
|
|
|
