ISIL Sells Its Oil, but Who Is Buying It?

MIDDLE EAST AND NORTH AFRICA, 7 Dec 2015

Carole Nakhle – Al Jazeera

The group hasn’t only recruited suicide bombers, it has also drawn technicians and engineers to manage the oil fields.

There is no one magic or quick bullet to end ISIL’s oil trade, irrespective of who is conducting the military campaign, writes Nakhle [Getty]

6 Dec 2015 – Thanks to the illicit oil trade, millions of dollars enter the Islamic State of Iraq and the Levant’s coffers on a daily basis. Although we are getting into guesswork, estimates have varied between $1m and $1.5m a day. Russia’s President Vladimir Putin has referred to billions of dollars worth of oil trade, since mid-2014.

These numbers are based on estimates of daily production figures of the oil fields that have fallen under ISIL’s control, including some of Syria’s largest fields, with a cumulative daily production of around 30,000 to 40,000 barrels, and on prices ranging between $20 and $40 per barrel at which ISIL has been selling the oil.

ISIL has not only been recruiting suicide bombers, it has also engaged petroleum technicians and engineers to manage the oil fields and the refining process, and so far they have been successful.

No one knows how such a terrorist organisation can somehow command the services of these skilled people: Do they offer them payments so lucrative that they cannot resist, or do they simply shoot anyone who refuses to cooperate? In the absence of modern societies’ rules of law, anything is possible.

Oil fields – particularly the ageing ones that are under ISIL control – require maintenance to sustain a certain level of production for as long as possible.

But maintenance is costly. That is why some commentators have argued that at some point ISIL’s lucrative business will eventually dry out because of the rapid decline in production.

This, however, may not materialise any time soon because even if production drops it can go on for many years, even decades.

Web of buyers

The oil trade, irrespective of its specific value, is supporting ISIL’s survival. Not only does oil give the terrorist group the continuous financial backing it needs to recruit new members, secure arms, buy local support, and sustain its far reaching propaganda campaign, it also strengthens its position through self-sufficiency since part of the production is consumed locally, thereby satisfying ISIL’s strategic needs for electricity, mobility, and heating.

The other big and more critical question, apart from how much ISIL is making, is who is buying ISIL’s oil. Just like any other black market, the answer is murky.

Accusations, even at state level, have been made but with no material evidence produced with respect to who is exactly involved.

Following the shooting of the Russian plane by Turkish forces, the Russians have openly accused Turkey of facilitating ISIL’s oil trade. In retaliation, Turkey stated that it was the other way round: by protecting the Assad regime who is one of ISIL’s loyal clients, Russia is a de facto accomplice.

While such high level accusations may amuse some and certainly sadden many, the grim reality is that black markets have a highly organised and extensive web of shadow partners and clients, who are attracted by the money, irrespective of their nationalities, religious beliefs or principles, if they have any, and are active in Iraq, Syria and Turkey.

Investigators may be lucky to identify a couple of individuals or organisations, but it would be naive to believe that such a complex system can be easily exposed.

To complicate matters further, it is important to note that not all those involved in the trade fall into that corrupt category. There are the unconventional clients who rely on ISIL’s oil for survival: think of the millions of people living in ISIL-controlled areas who need access to diesel to meet their basic needs for electricity, heating and mobility.

Some rebels, ISIL’s own enemies, also ironically fall in that category as they have no other choice. And there are the truck drivers, mostly civilians, who transport ISIL’s oil to smugglers, traders and middlemen and are in desperate need for any source of income.

And once the oil and its refined products go beyond ISIL-controlled areas, they become very difficult to trace – someone, somewhere, and completely unknowingly, may well end up burning ISIL oil.

No magic bullet

No outsider knows the details of what transpires on the ground. One thing, however, is clear: such a complicated matter is unlikely to be resolved by any one course of action.

Some argue that the only way out is to completely disable the producing oil fields by bombing them. That notion is somehow vague. If the intention is to temporarily halt production, ISIL has proven its ability to bring it back onstream, even if at lower levels.

If the intention is to cause permanent damage to the nine producing assets, then civilians, as well as any hope to rebuild local industries post-ISIL, will all suffer. Another option would be to destroy the transport facilities – namely the trucks.

Here too, there are challenges: the sheer size of the truck trade, the involvement of civilians and the fact that trucks can be more easily replaced than pipelines or oil tankers, are just some examples. Besides, the oil trade – while highly profitable – is not the only source of income for ISIL. Drug trade, crime, hostage-taking, antiquities trade, taxes and donations among others, also play an important role.

There is no one magic or quick bullet to end ISIL’s oil trade, irrespective of who is conducting the military campaign.

Turkey can make a major contribution by tightening its border control but such a step alone will not suffice. Under normal circumstances, the fact that oil can be more easily transported than other sources of energy, like natural gas, is a blessing.

In this particular case, however, it is clearly a curse. Even if Turkey prohibits any trade coming from Syria, other escape routes will soon be identified.

The starting point for a more effective solution is a closer cooperation between regional and international governments, especially in terms of coordinating their efforts and military strategies, and sharing intelligence to expose various players involved.

The increasing confrontation between Turkey and Russia is simply putting the international community in its fight against ISIL on the wrong path.

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Carole Nakhle is the founder and director of Crystol Energy, an advisory, research and training company in London.

Go to Original – aljazeera.com

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