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Losing of oil exports income may reduce ISIS functioning in 2016 Featured

ISIS might have proven its ability to wage complex attacks around the world in 2015. But in the heart of its "caliphate" in Iraq and Syria, the group suffered at least one important setback: losing a substantial portion of its oil-exports income, according to the Iraq Oil Report.

Without the major source of revenue and foreign currency, the group might have a reduced ability to maintain the appearance of state-like services and functions inside the caliphate, potentially harming its ability to hold on to territory as global efforts against the group intensify. The Iraq Oil Report's 28 December story is one of the most detailed accounts of the jihadist group's oil infrastructure that's publicly available. It's based on interviews with over a dozen people living in ISIS-controlled areas, including anonymous oil-sector workers. The story also includes escriptions of documents from the nearly 7 terabytes of data seized from the compound of Abu Sayyaf, the Isis oil chief for Syria killed in a US Special Forces raid in May.The story provides a mixed picture of Isis's oil resources 16 months after the start of a US-led bombing campaign against the group.

 The US was slow to understand the strategic value of targeting Isis's oil infrastructure, viewing oil platforms, refineries, and vehicles "as a financial target with less battlefield urgency, rather than military targets," according to Iraq Oil Report. Even with the loss of nearly all of its oil fields in Iraq, Isis still controls a single conventional refinery in the country, in Qayyarah, near Mosul. Less efficient open-pit refining techniques and continued control of oil fields in Syria mean that fuel prices within the Islamic State have stabilized somewhat in parts of the caliphate after fluctuating wildly over the past year and a half. 

The report contains one piece of evidence that the Middle East may be well past the heyday of the Isis oil economy. Isis's once formidable oil-export economy, which used to produce $40 million in revenue a month for the group, has all but evaporated.As the story recounts, Isis oil exports were once a highly centralized operation, with middlemen like tanker-truck drivers paying about $10 to $20 per barrel at the point of sale.Isis would then recuperate the apparent discount on the barrel of oil through a series of tightly imposed transit taxes. The oil would hit the Turkish market through truckers or Isis officials bribing officials in either Turkey or Iraqi Kurdistan.The caliphate's oil industry was staffed using 1,600 workers, most of whom were recruited from around the world. Because of global disruptions to the oil industry, even an illicit non-state group like Isis didn't have trouble running an international recruiting drive for skilled labor, as workers were "enticed with 'globally competitive' salaries at a time when the oil industry was undergoing waves of layoffs."a


Read 4986 times Last modified on Monday, 25 April 2016 08:46