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The Islamic State's Oil Web

Updated on December 2, 2015
The lines are rows of oil tankers waiting to be filled with oil and one airstrike.
The lines are rows of oil tankers waiting to be filled with oil and one airstrike.
Turkish oil tankers crossing the Turk-Syria border
Turkish oil tankers crossing the Turk-Syria border

ISIS Black Market Oil

Recently, Russia has declared that Turkey, a NATO member, is buying oil from the Islamic State. Then, Turkey has said that Syria is buying oil from the Islamic State, which is all bizarre because both are at war with ISIS, so they say. Let’s not forget Iraq, which also buys the oil and maybe Iran also. The oil bought by Iran probably would to Pakistan eventually. Syria needs the oil for sure and one can see how some refineries in Turkey might try to obtain some without the government knowing (or, looking away).

Most oil tanker trucks can carry 190 or so barrels and there is an estimated over 300 such trucks available and many are simply parked near the ISIS refinery waiting for fill up. IS controls 60% of the oil producing areas in Syria and some in Iraq. They ship the crude through the Iraqi Kurdistan and resell to Turkish and Iranian traders. It is hard to believe that Turkey is unaware of this happening because there are only so many roads that a tanker could use and there are border stations.

IS earns around $2,000,000 daily from crude sales because they sell the oil below the marker rate and as low as $20 a barrel. The current market rate is around $50 a barrel. So, who would not want to buy a product at 50% off the market? However, the USA has now offered a $5,000,000 reward for valid information leading oil smuggling routes and details regarding this. With Obama finally getting some nerve, he has allowed US aircraft to attack oil tankers waiting to be filled and this has decreased the IS income from oil sales to $500,000 daily. So, Obama is thinking- destroy the capability to move the oil and leave the oil fields alone. That seems to be working. With over 300 trucks to move oil, IS could sell around 60,000 barrels daily.

But as one driver and shipper reported, trucks carrying consumer goods and food cross from Turkey all the time into Syria and deliver in Raqqa, the IS capital. In a week, it is hundreds of trucks with official export customs documents issued in Turkey. Even trucks from Jordan (which has attacked IS) cross into Iraq after IS extracts a tax for the goods they carry. A truck loaded in France with goods can easily travel to Iran and then Iraq and then Raqqa using a Turkish trucking firm legally. A French TV report revealed this recently. Also, Israel purchased 19 million barrels of Kurdish oil, worth roughly $1 billion, between May and August of this year (2015). The massive amount meets two-thirds of the Jewish state’s oil needs and may be a way to covertly support the Kurds’ fight against the Islamic State. The Kurd’s state that they sell oil to independent traders who then sell to whomever they want, which his true, so unbeknownst to them, the state that buys it may or not be at war with the Kurds because the state has no idea where the oil actually came from.

A member of the Iraqi parliament declared, “That in the past eight months IS has managed to sell what is $800 million worth of oil in the black market of Turkey. This is Iraqi oil and Syrian oil, and these are carried by trucks from Iraq, from Syria, through the borders to Turkey and sold … [at] less than 50 per cent of the international oil price.”

The oil either is consumed in Turkey or is refined on Turkish territory and sold on the Turk market. What does not is sent to Jihan and then pipelines from Jihan to the Mediterranean and sold on the international market.

Turkey is the most untrusted of NATO members. It acts, many times, at odds with NATO members in its own interest. The spotlight is shining on them as they have been funding IS, as have so many others to buy cheap oil. The solution is easy- either bomb the oil fields and\or destroy the capability to ship the oil. Why has Obama so reluctant?

He has, in effect, prolonged this with inaction.

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