Weeks before ISIS unleashed its fury on Paris, the Western coalition’s Operation Tidal Wave II had already ramped up its attack on oilfields controlled by the terrorist group in Iraq and Syria.
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“We’ve stepped up our attack [and], focused our targeting on other oil facilities…” U.S. Army Col. Steve Warren told Pentagon reporters in a Nov. 13 briefing. The U.S. coalition reportedly destroyed 116 oil-laden ISIL trucks in Syria in recent weeks.
The coalition led by the United States and comprising 30 other nations including Canada, will likely intensify these efforts, as they look to cut off one of ISIL’s key revenue streams and restrict its ability to sponsor global terrorist activities, in response to the group’s attack in Paris last Friday.
“Paris will forever be seen as the touchstone that led to a ramped-up effort against ISIS,” says Richard Nephew, a former U.S. State Department official who worked on the Iran sanctions file. “Its impact was devastating and the response has been aggressive and, personally, I would like to see it even more aggressive.”
Precise figures on ISIL’s oil revenue are hard to come by. Recent media reports suggest it could be as high as US$50 million per month from its production of 40,000-50,000 barrels per day. In a February presentation, the U.S. State Department pegged the group’s monthly revenues from oil at $25 million.
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“The crude is sold to middlemen at a heavy discount, and Turkey, Syria and Iran are reportedly final destinations for the contraband product,” according to a September report by RBC Capital Markets.
The extremist group has also sought to operate certain energy facilities, such as refineries, as part of a larger effort to maintain essential services and has recruited engineers into its ranks to help with that effort, the bank said.
Until recently, Western coalition forces had not targeted the ISIL-controlled oil facilities in hopes they would eventually be retaken by Iraqi forces.
In addition, the environmental hazards of bombing oil wells echo images of Kuwaiti oil wells that burned for years after they were set alight by Saddam Hussain’s retreating forces in 1991.
The ISIL-controlled field also supplies heating and power to the local population.
To expect that anybody has a magic wand to stop (the oil revenue) — it is hard
While ISIL’s oil revenues are significant, they don’t constitute its only revenue stream and may not spell the end of the caliphate, said Ayham Kamel, director of Eurasia Group’s Middle East operations.
Other sources of revenue are from funds remitted by sympathizers from across the world, the smuggling of ancient artefacts to Turkey and other places and taxation and protection money it generates from the areas it controls.
“They are not short on money, let’s put it that way,” Kamel said in an interview from London, but he noted that the group’s oil revenue has weakened in recent months.
Coalition forces recently isolated Ramadi, Beiji and Sinjar from ISIL, according to Col. Warren, adding that an oil refinery in Beiji was being returned to the Iraq Ministry of Oil.
But Jon Alterman, senior vice-president at the Zbigniew Brzezinski chair in global security and geostrategy at the Center for Strategic and International Studies, said cutting ISIL’s oil revenues will be difficult.
“We have been fighting a war on drugs for decades, and there are still people doing drugs,” Alterman said. “To expect that anybody has a magic wand to stop (the oil revenue) — it is hard. I would argue that it is hard but it needs to be done.”
Eurasia, which advises corporations on risk management, does not expect the Paris attacks to lead to an effective global anti-ISIL military campaign, given Russia’s efforts to prop up Syrian strongman Bashar Al-Assad’s regime, which is not aligned with ISIL but shares its interest in fighting Western coalition forces, Arab armies and assorted rebel groups.
Indeed the fight against ISIL will be muddled due to the competing interests of multiple parties invested in the region. The U.S. and most of its Gulf partners such as Saudi Arabia have demanded Assad step down, but Moscow will continue to attack non-ISIL players in Syria and Iraq, consolidating the Syrian dictator’s position.
“Russia is basically putting the West into a corner, where it has no choice because (ISIL) will be the only enemy left,” said Anil Hira, a professor at the department of political science at Simon Fraser University. “Ultimately U.S. President Barack Obama will acquiesce to leaving Assad in power.”
At this point there are still significant obstacles to successful diplomacy, Eurasia’s Kamel said in a report. The U.S., France, and Saudi Arabia are still opposed to Assad’s participation in the transition, rebel groups remain largely Islamist and unacceptable partners and mechanisms for an effective ceasefire have not been established.
Matthew Reed, vice-president at Washington-based Foreign Reports Inc. believes the West would pursue a more muscular force against ISIL, which will continue to generate revenue as long as it holds territory in Iraq and Syria.
“Really for the last year the U.S. has been pulling its punches on [curbing ISIL oil trade]. Now it seem the gloves are off.”