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Thursday, November 26, 2015

How oil is funding the jihadi terrorists

There is a very interesting article in the Financial Times that demonstrates how ISIS is being funded by those opposed to them through their control of Syrian oilfields.

The paper says that 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 neighbours:

But more than a year after US President Barack Obama launched an international coalition to fight Isis, the bustling trade at al-Omar and at least eight other fields has come to symbolise the dilemma the campaign faces: how to bring down the “caliphate” without destabilising the life of the estimated 10m civilians in areas under Isis control, and punishing the west’s allies?

The resilience of Isis, and the weakness of the US-led campaign, have given Russia a pretext to launch its own, bold intervention in Syria.

Despite all these efforts, dozens of interviews with Syrian traders and oil engineers as well as western intelligence officials and oil experts reveal a sprawling operation almost akin to a state oil company that has grown in size and expertise despite international attempts to destroy it.

They add that estimates by local traders and engineers put crude production in Isis-held territory at about 34,000-40,000 barrels per day. The oil is sold at the wellhead for between $20 and $45 a barrel, earning the militants an average of $1.5m a day:

Isis’ oil strategy has been long in the making. 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.

When it pushed through northern Iraq and took over Mosul, Isis also seized the Ajil and Allas fields in north-eastern Iraq’s Kirkuk province. The very day of its takeover, locals say, militants secured the fields and engineers were sent in to begin operations and ship the oil to market.

“They were ready, they had people there in charge of the financial side, they had technicians that adjusted the filling and storage process,” said a local sheikh from the town of Hawija, near Kirkuk. “They brought hundreds of trucks in from Kirkuk and Mosul and they started to extract the oil and export it.” An average of 150 trucks, he added, were filled daily, with each containing about $10,000-worth of oil. Isis lost the fields to the Iraqi army in April but made an estimated $450m from them in the 10 months it controlled the area.

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. Even without being able to export, it can thrive because it has a huge captive market in Syria and Iraq.

Indeed, diesel and petrol produced in Isis areas are not only consumed in territory the group controls but in areas that are technically at war with it, such as Syria’s rebel-held north: the region 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.

What is clear is that if those allying against ISIS are serious about defeating them then they need to cut off their source of revenue. Once more, it is all about the oil.

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