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ISIL - Oil

Without oil and fuel, some believe the rebellion against President Bashar al-Assad would collapse. ISIL tapped into a long-standing and deeply rooted black market connecting traders in and around the area. After extracting the oil, ISIL sells it to smugglers who, in turn, transport the oil outside of ISILs strongholds. These smugglers move oil in a variety of ways, from relatively sizeable tankers to smaller containers. ISIL controls oil refineries of various sizes and output capacities, and earned some revenue from the sale of refined petroleum products.

So who, ultimately, is buying this oil? ISIL was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transported the oil to be resold. It also appeared that some of the oil emanating from territory where ISIL operated has been sold to Kurds in Iraq, and then resold into Turkey. And in a further indication of the Asad regimes depravity, it seemed the Syrian government has made an arrangement to purchase oil from ISIL.

ISIL had its own source of funding controlling gas and oil fields in the east of Syria that gave it a revenue stream. In their fight with the Syrian government, they took over some Syrian oil facilities, potentially a huge source of revenue. In late November and early December 2012, the Syrian opposition gained momentum. The war had been nearing a stalemate when rebel forces suddenly overran multiple air bases, including Marj al-Sultan outside Damascus, several major ground installations, and the Tishreen hydroelectric dam near the Turkish border. Rebel gains in the far-flung eastern province of Deir al-Zour led to government with- drawal from its last bases in Deir al-Zour City (Syrias sixth-largest city), leaving rebels in control of the Syrian oil fields.

But initially they could only find one customer - Syria. By June 2013 ISIS had been selling smuggled Syrian oil in Turkey worth $800 million, according to Ali Ediboglu, a lawmaker for the border province of Hatay from the main opposition Republican Peoples Party (CHP). It also secured revenue by selling electricity to the Syrian government from captured power plants. The militants set their sights on Iraqs Beiji oil facility, potentially providing another source of revenue to further expand their operations.

ISIS led a coalition of Sunni militias in an astonishing takeover of a considerable portion of the Iraq's northern oil fields. The group began to smuggle close to $1 million per day in Iraqi crude, prompting some to dub the insurgents still-fragile Islamic caliphate the worlds smallest petro-state. As of August 15, the Islamic State held six oil fields in northern Iraq. But by late August, its fighters had lost control over the highly productive Ajeel oil field a result attributed to US airstrikes and Iraqi and Kurdish troops assaults. The Associated Press estimated that the IS oversaw 11 oil fields between Iraq and Syria, as of mid-September 2014.

Oil was bought from IS by Western-backed rebel militias, Syrian NGOs and the local councils that had emerged in insurgent-held areas in northern Syria. Western intelligence officials monitored Islamic State tanker trucks rolling from Iraq into southern Turkey, but had refrained from military action. The militant group continued to provide natural gas to Syrias Bashar al-Assad regime so it can operate electrical power plants.

David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, told lawmakers 13 November 2013 that oil sales that used to net IS $1 million a day have been slashed to a few million dollars a week a significant difference when it comes to maintaining a fighting force of 30,000 or more. We have information that they pay their fighters about $1,000 a month," Cohen said. "That comes to $360 million a year in just the expenses for fighters.

Western and Iraqi officials were given a good rundown on the terror groups oil trading with the Assad regime in June 2014 when IS computers and databases were seized by Iraqi intelligence officers from the Mosul home of jihadist commander Abdulrahman al-Bilawi. The raid was conducted a few days before jihadists overran the northwestern Iraqi city. The breakdown of the groups financial resources shocked even senior Iraqi officials, who say the seized databases revealed IS was receiving cash not only from oil trafficking but also from selling to overseas traders, other Syrian insurgent groups and the Assad regime.

Islamic State militants were gaining at least $50 million per month from illegally selling crude oil from occupied oil fields in Iraq and Syria, Iraqi and US officials said in October 2015. The jihadists were selling the black gold at extremely low prices. The extremists were reportedly selling crude oil at $35 per barrel, sometimes as little as $10 per barrel, four Iraqi intelligence officials told AP. According to a member of Iraq's parliamentary energy committee and a former oil minister, Islamic State is extracting about 30,000 barrels per day from Syrian oil fields and around 10,000-20,000 barrels per day from Iraqis.

Russia's Deputy Defense Minister Anatoly Antonov estimated 02 December 2015 that IS makes $2 billion (1.9 billion euros) from its oil trade. "According to available information," Antonov said, "the highest level of the political leadership of the country, President Erdogan and his family, are involved in this criminal business.... This oil enters the territory of Turkey in huge quantities, on an industrial scale along a living pipeline of thousands of oil tankers".

The US-led coalition initially refrained from bombing the oil trade lifeline of Islamic State. Russia, in contrast, in November 2015 destroyed some 500 ISIS tankers over a few days, disrupting the flow of illegal petrodollars to the terrorist group, which, according to Russian President Vladimir Putin, was selling oil to some 40 states.

Russia began carrying out an air campaign in the Arab republic at the request of the Syrian leadership on 30 September 2015. Russian Deputy Defense Minister Anatoly Antonov said 02 December 2015 that During the last two months Russian aircraft carried out airstrikes against 32 oil refinery complexes, 11 oil refineries and 23 oil pumping stations. We also managed to destroy 1080 oil tanker trucks. These measures effectively halved the illegal oil production output in Syria. Russia estimated that the terrorists' daily oil revenue had fallen from $3 million to $1.5 million following Russia's airstrikes. The U.S.-led coalition command ridiculed a Russian claim to have destroyed 500 Islamic State oil tankers in one operation, just after the Americans said U.S. planes had wiped out 116 tank trucks.

The coalition prioritized oil-related facilities and infrastructure as targets. It avoided destroying oil fields themselves, however, fearing it would make the reconstruction of Syria after the war more difficult. Additionally, there were worries that bombing oilfields would create an environmental hazard.

Striking oil tankers, most of which are driven by civilians, is a particular problem, Col. Steve Warren, the Baghdad-based coalition spokesman said, but "our assessment is that we have not caused a single civilian casualty." To avoid them in the operation that destroyed the 116 vehicles, he said, US F-15s dropped leaflets over the trucks, which are usually lined up beside Islamic State oil installations, warning drivers that "we're about to blow them up" and telling them to run away.

Thirty minutes later, the U.S. jets "flew right over, near ground level, to scare the crap out of them," Warren said. "Just for good measure, they then did strafing runs off to the side" of the trucks, "as an attention-getter . . . just in case one or two really stubborn guys" didn't get the message. "We saw them flash their lights at one another, jump out of the trucks and run away. That whole process took about 45 minutes, then we blew them up." The Russians, he said, provided no such warning.

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Page last modified: 08-12-2015 19:03:54 ZULU