Islamic State oil business still booming despite coalition air strikes

Islamic State oil business still booming despite coalition air strikes.
The Smugglers Who Fuel ISIS

October 19, 2014


BAGHDAD,—On the road between Kirkuk and Erbil, which cuts across the fault-line between Iraq proper and the semi-autonomous Kurdistan region, convoys of tanker trucks can be seen travelling northwards. When you ask where they are headed, local café owner Fahmi says “They are smuggling oil to Turkey.”

In the café in Altun Kupri—a town in Kirkuk province just south of Iraqi Kurdistan—Fahmi, a former tanker truck driver himself, tells Asharq Al-Awsat that he was only able to establish his café thanks to his former job as a smuggler. “I left because I was tired, even though I was making very good money as an oil tanker truck driver.”

Fahmi explains that the oil is extracted from wells in the Kurdistan region. “It is then prepared in Kirkuk, very close to the borders of Erbil province, on the road to Erbil
you will see many tanker trucks on the side of the main road, they are waiting for crude oil loads to take to Turkey or Iran.” Some trucks waiting by the roadside will also smuggle oil to other parts of Iraq, Fahmi says.

Fahmi, who does not divulge whether he smuggled oil for the Islamic State of Iraq and Syria (ISIS), admits that ISIS continues to sell oil to smugglers despite the coalition airstrikes targeting the jihadist group.

“Today, there is ISIS oil that is being extracted by ISIS elements from oil wells under control of the group, whether in Iraq or Syria. ISIS is selling this oil very cheaply,” he says. “ISIS oil is mainly being transported to Turkey via Kurdistan.”

Fahmi says that he is not sure whether Kurdish authorities are aware of the extent of the problem but describes the authorities response to the terrorist group’s smuggling operation as ineffective. “The tanker trucks all travel together from Kirkuk to Turkey and it is difficult to differentiate between tankers carrying legal oil and tankers carrying illegal ISIS oil.”
The international community has grown increasingly concerned over the enormous wealth that ISIS has managed to accumulate through illegal oil sales. ISIS is using oil revenue to fund its terrorist operations in Syria and Iraq. In September, Luay Al-Khatteeb,www.Ekurd.net a visiting fellow at the Brookings Institution’s Doha Center in Qatar, told the Associated Press that ISIS was earning 3 million dollars a day in profits from oil sales.

However this was before the US began air strikes against the terrorist organization in Syria and Iraq. According to reports, the strikes—which have included the targeting of convoys and refineries—have succeeded in damaging some of ISIS’s illegal oil network but failed to completely stamp out the terrorist organization’s lucrative business model.

Shallal Abdoul, a senior administrative official in the town of Tuz Khurmatu in Salah Al-Din province, told Asharq Al-Awsat that between 50 and 100 tanker trucks pass through the town every day carrying crude oil. The illegal ISIS oil tankers subsequently take unpaved dirt roads in order to reach the Iraqi interior, avoiding security checkpoints.

“Each tanker can carry between 30 and 36,000 cubic liters of oil, and is sold by ISIS for between 10,000 and 14,000 US dollars,” Abdoul said.

According to Abdoul, armed groups and ISIS are stealing crude oil from wells near the Hamrin Mountains, including a well no more than 20 miles from Tuz Khurmatu. “These areas are not under the control of the government or the military . . .and since the fall of Nineveh on June 9, a large portion of this area has fallen directly into ISIS hands.”

The well-established smuggling networks across the Middle East and cash payments make it easy for ISIS to cover their tracks and hide the money trail. The middlemen are unlikely to turn down ISIS oil when it is sold so cheaply. Kurdish Iraqi businessman Hoshang Barzinji explains that “ISIS sells one barrel of oil for between 10 and 12 US dollars, while brokers or dealers can subsequently sell this on for between 25 and 30 US dollars.”

As for truck drivers like Fahmi, they can sometimes make as much as 50 US dollars a day in a country where 28 percent of families live below the poverty line, according to statistics released earlier this year. However, while the rewards are high, so too are the risks. Smugglers live under the constant threat of arrest and imprisonment, playing a dangerous game of cat-and-mouse to elude security checkpoints and police patrols.
So if a driver, for example, has to elude authorities and the journey takes three days then he can make 150 dollars,” Barzinji says.

He adds that smuggling in Iraq, even for ISIS, is not considered taboo by some criminals, particularly given the harsh economic realities that have existed in the country since even before the emergence of this terrorist organization. “For drivers, this [smuggling] operation is considered a personal adventure, especially within Iraqi territory.”

Fahmi might have retired from smuggling, but for many others it is the money and adventure that keeps them hooked in this dangerous and illicit business.

By Ma'ad Fayad - Asharq Al-Awsat