The U.S.-led coalition has been unable to interrupt the organized and sophisticated oil industry in areas in Iraq and Syria controlled by the Islamic State (ISIS/ISIL), which generates an average of $1.5 million daily, reports the Financial Times (FT), citing oil experts, traders, engineers, and western intelligence officials.
ISIS is running “a sprawling operation almost akin to a state oil company that has grown in size and expertise despite international attempts to destroy it,” notes the report.
The U.S.-led coalition has declared oil trade in ISIS-held areas as a primary target of its airstrikes.
“Oil is the black gold that funds ISIS’ black flag — it fuels its war machine, provides electricity and gives the fanatical jihadis critical leverage against their neighbors,” reports FT.
ISIS is reportedly running a professional oil company, actively recruiting skilled workers, ranging from engineers to trainers and managers. The company is “minutely managed,” notes The Times.
FT learned from local traders and engineers that crude production in territory controlled by ISIS has reached between 34,000 and 40,000 barrels per day (bpd).
ISIS charges between $20 and $45 a barrel, generating an average of $1.5 million a day. Oil consumption is not limited to ISIS-held areas.
Areas controlled by ISIS’ rivals, such as Syria’s rebel-held north, also consume the diesel and petrol produced by the jihadist group.
Northern Syria “is dependent on the jihadis’ fuel for its survival. Hospitals, shops, tractors and machinery used to pull victims out of rubble run on generators that are powered by ISIS oil,” points out FT.
“It’s a situation that makes you laugh and cry,” an unnamed Syrian rebel commander in Aleppo province who buys diesel from ISIS areas told the Financial Times.
Although the commander’s forces fight against ISIS on the battlefield, he said his group has “no other choice, and we are a poor man’s revolution. Is anyone else offering to give us fuel?”
Oil production has been part of the ISIS strategy since the group’s inception in Syria back in 2013, before it swept through Iraq.
The jihadist group is reportedly using oil as a strategic weapon.
“ISIS’ oil strategy has been long in the making,” reports The Times. “Since the group emerged on the scene in Syria in 2013, long before they reached Mosul in Iraq, the jihadis saw oil as a crutch for their vision for an Islamic state. The group’s shura council identified it as fundamental for the survival of the insurgency and, more importantly, to finance their ambition to create a caliphate.”
“Most of the oil ISIS controls is in Syria’s oil-rich east, where it created a foothold in 2013, shortly after withdrawing from the north-west — an area of strategic importance but with no oil. These bridgeheads were then used to consolidate control over the whole of eastern Syria after the fall of Mosul in 2014,” it adds.
ISIS has technicians in charge of the oil filling and storage process and people working behind the scenes on the financial side of the industry.
“While al-Qaeda, the global terrorist network, depended on donations from wealthy foreign sponsors, Isis has derived its financial strength from its status as monopoly producer of an essential commodity consumed in vast quantities throughout the area it controls,” points out FT. “Even without being able to export, it can thrive because it has a huge captive market in Syria and Iraq.”