ISIS Is Making Nearly $100 Million
Per Month Selling Oil.
Who’s Buying It?
ISIS is raking in the oil money.
The Iraq Energy Institute estimates that the terrorist organization is making approximately $3.2 million per day selling oil on the black market: $1.2 from oil in Iraq and $2 million from oil in Syria.
A complex smuggling operation funnels the oil out of the region through Iran, Kurdistan, Jordan, Turkey and Syria.
Hussein Allawi is the manager of the Iraq Energy Institute in Baghdad. He told CNN,“They use oil tank trucks instead of oil pipes. There are about 210 oil tank trucks smuggling oil to Turkey and other places every day.”
The network traces its roots all the way back to the aftermath of the Gulf War in the 1990s when, in an effort to demilitarize Saddam Hussein’s regime in Iraq, the United Nations led a series of international economic sanctions against the country.
But it soon became clear that ordinary Iraqi citizens were bearing all of the hardship of the sanctions, so the Clinton administration proposed the Oil-for-Food Program to the United Nations.
This program allowed Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs.
There were multiple reports of corruption after the program ended in 2003, however. An investigation found that during the program, Saddam Hussein was able to make $10.1 in illicit revenues: $4.4 billion in illegal surcharges and another $5.7 billion smuggling oil to countries all over the world. Russia was the main buyer, receiving more than 1.3 billion barrels.
The networks and brokers that Saddam used to smuggle oil out of Iraq and all over the world did not disappear when the dictator was overthrown, and now it seems that ISIS is the primary beneficiary of this substantial black market infrastructure.
But who is actually buying the oil now? Well, mostly ISIS’s enemies, ironically.
The biggest buyer is probably Syria. The western world has imposed sanctions on Syria that block imports of fuel into the country, and ISIS now controls many of Syria’s oil fields in the northeastern parts of the country.
Joshua Landis is the director of the Center for Middle East Studies at Oklahoma University. He referenced reports that Syrian President Bashar Al-Assad has been buying oil from ISIS via a Christian intermediary for some time now when he said,
“It seems that this is going through brokers. In particular, one person who’s been fingered is a very prominent Christian businessman close to the [Syrian] president who buys it, then arranges with the Syrian government to have it shipped back.”
Joshua M. Landis- Associate Professor in the School of International and Area Studies at the University of Oklahoma Joshua M. Landis- Associate Professor in the School of International and Area Studies at the University of Oklahoma
Landis pointed out that Assad’s regime is in the midst of a full-scale war with both ISIS and the western-backed rebel groups that emerged from the Syrian revolution.
“The Assad government has to run its war machine, it has to run its cities, it needs power,”
he said, adding,
“Turkey, the Kurds — everybody is buying cheap oil and smuggling it across their border. So the notion that you have clear allies working against ISIS, it’s not the case.”
One European politician even claimed that some of that cheap black market oil is ending up in the European Union.
Just how cheap is it? It’s estimated that ISIS is selling their oil for about $40/barrel, compared to nearly $100/barrel on the international market, so it’s no surprise that there are plenty of eager buyers.
For everyone asking why the United States (who is already carrying out air-strikes against ISIS) doesn’t just bomb the oil fields, this might be the answer.
Though ISIS is making a lot of cash off of their oil, they’re selling most of it on the cheap to the countries that are actively fighting against them, so cutting off this flow of oil could actually end up hurting the battle against ISIS rather than helping it.
It’s interesting to note that oil prices have actually fallen considerably since ISIS rose to power and began selling oil earlier this year.It’s interesting to note that oil prices have actually fallen considerably since ISIS rose to power and began full-scale oil production earlier this summer (Courtesy of WTRG Economics)
Cutting off the flow of such a cheap source of oil could also raise the international price of oil, which would mean higher prices at the pump for most Americans.
Rising gas prices have always tended to breed politically-based conflict within our country, and that’s the last thing any administration wants while dealing with threats in Europe (Ukraine/Russia), the Middle East (ISIS) and Africa (Ebola/Boko Haram).
By the same token however, one could easily argue that ISIS is doing a rather good job of hurting the western oil industry by flooding the market with cheap oil. In fact, a number of oil stocks hit 52-week lows last month as ISIS made advances in Iraq.
Lastly, the Iraqi and Kurdish government forces, who are leading the ground offensives against ISIS, are hesitant to destroy oil infrastructure that would take years and millions of dollars to rebuild.
