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Page added on November 21, 2015
The Oil War Against ISIS: Why Bombs Won’t Cut Off The Flow
Needless to say, the world’s attention is now concentrated on the activities of ISIS and the prescriptions for defeating (as opposed to containing) them. Their finances are a major part of this. The Western powers have had some success curtailing hostile groups by attacking their financial flows, restricting movements of cash from ideological supporters and/or members of an ethnic diaspora. However, ISIS has proved more resilient, partly because of its territorial control but also because as much as half of its money is thought to come from petroleum production.
The U.S., in the grand tradition of Confederate General Jones’ 1863 attack on the Burning Springs oil field, attempted to cut the groups’ oil income by bombing first, the large Baiji refinery which they had captured and, recently, scores of tanker trucks in Syria carrying off petroleum for sale. For anybody who watched video of the oil well fires in Kuwait in early 1991 or any number of Hollywood movies where petroleum explodes at the drop of a handkerchief (especially Arnold Schwarzenegger’s handkerchief), it must seem puzzling that ISIS’ oil sales have been hard to interrupt. Indeed, the oil price drop of the past year probably hurt them more than anything. (Yes, fracking fights terrorism!)
The perception that an oil installation can easily be sent up in flames is correct, but few realize that they can be repaired fairly easily. (Think World War II: We blow up the railroads in the day, the Germans repair them at night.) The primary component in a refinery is steel: a simple refinery is nothing more than a large pot for cooking and then condensing the oil. The quality of the product is going to be inferior, but for those trapped in ISIS held territory complaining to a consumer products safety board is not an option.
Oil wells are also not attractive targets. The important parts are underground: the drillpipe that leads to the deposit. In areas like Syria, where most of the equipment is old, the most sophisticated parts are essentially pumps. In a war zone, field operators are unconcerned about doing sophisticated work like seismic monitoring to optimize production; in most fields, oil will rise to the surface and merely needs to be gathered. And while the U.S. industry has some amazing pump technology, the basic concept has been known for millennia: you wouldn’t have 20 guys with buckets hauling oil in Texas, but stranger things are done in isolated areas.
The trucks are a slightly different story, as a tanker truck is a much more efficient way to haul oil than oil cans in a private car. But again, in ISIS-controlled areas, the money to be made from doing so is probably sufficient incentive to ensure the fuel gets sold, albeit for less profit to ISIS, which has to eat the higher transportation costs.
Aside from the fact that the area has a long tradition of smuggling, under the Hussein regime in Iraq, economic sanctions restricted the commercial sale of oil into the world market, creating large scale smuggling of crude and products in the region now controlled by ISIS. Again, not an efficient system, but with some of the world’s lowest cost oil production, the Iraqi government could afford to lose a significant fraction of the price to smuggling (and the associated bribes).
This means that ISIS found a large-scale (perhaps 200 tbd), albeit mostly dormant, network that was capable of smuggling oil to either wholesalers and pipeline connections, mingling it with the legitimate oil stream, or to small-scale refiners who would supply local customers with products. The huge fleet of tanker trucks recently attacked by the US is basically a leftover from the days of Saddam Hussein and is highly decentralized and thus difficult to target. And basic of its simplicity, most aspects are easy to repair or replace. Cutting the oil revenues of ISIS will thus be a challenging proposition, although their costs can be increased significantly so as to lower their revenue.
However, the organization does have other sources of income, as well-described by Bloomberg, so reducing their oil revenue by half would mean at most a loss of 25%, based on current estimates. Since they have prospered in part by seizing the properties of others, rather like the Romans, Napoleon, and many others, preventing the expansion of their territory should be effective. And the Allies could always take a notion from John D. Rockefeller, and flood the area with cheap gasoline to drive out the competition.
18 Comments on "The Oil War Against ISIS: Why Bombs Won’t Cut Off The Flow"
dissident on Sat, 21st Nov 2015 8:55 am
Pure apologia for the deliberate US inaction on ISIS oil sales. The US is very efficient imposing sanctions on states and individuals, yet in this case it does not even try to sanction the Turkish and Iraqi middlemen.
Also, bombing oil transport infrastructure is very effective and this Forbes article is full of sh*t.
paulo1 on Sat, 21st Nov 2015 9:23 am
Just about every Forbes article is Shite. On this one I made the mistake of reading it before I noticed where it came from. I think from now on it’s best to scroll before reading.
Mark Bucol on Sat, 21st Nov 2015 9:29 am
Dissident: Don’t forget that Turkey is aiding ISIS by allowing its fighters to have free access to its black market by having few restrictions on border crossing. Some of the supplies needed to keep the oil infrastructure operating are very likely coming through Turkey. If Turkey shuts its border to ISIS half the battle is won. But because the Kurds are hated by the Turks and the Kurds are fighting ISIS, border securement in Turkey is unlikely.
onlooker on Sat, 21st Nov 2015 9:45 am
Their is not an Oil War or War on Terrorism, their is only who can get the oil, who can buy the oil and who can protect the oil. Today’s enemy might be tomorrow’s friend. The Middle East is about every man to himself, dog eat dog. I would not even be surprised if Russia and the US were temporary allies there. As usual Forbes is garbage.
rockman on Sat, 21st Nov 2015 12:04 pm
Blowing up oil tankers will slow the transport but the oil could still be moved much less efficiently by steel bbls in the back of a PU truck.
But understand how oil is moved from the wellhead to the transport system: it first collects in “field storage tanks”. Needles to say those would be very easy stationary targets. One video I saw of a Russian air strike it looked like they targeted a FST. Dozens of wells, maybe many dozens, feed a single FST. Take one out and a lot of production is lost. Of course, depending on the nature of the oil coming directly out of the wellhead, they could fill individual steel bbls in the back of a PU. It might not be that easy if there’s a good bit of NG coming out with the oil. Without running it through a “separator” the NG would be immediately vented to the atmosphere… a very dangerous explosive situation.
But it wouldn’t be difficult to monitor vehicle traffic into the areas where the wellheads are located. I doubt we would have to blow up many PU trucks before such “volunteer drivers” would be difficult to recruit. LOL.
Regardless just think what it would take to move just 5,000 bopd out of a field. Maybe get 6 bbls into a PU truck and maybe 10 into a bigger truck (which would be a more obvious target). That would take at least 500 trucks per day. And how far are they having to ship that oil: a 4 day roundtrip? Or a 10 day round trip? Or a 20 days? That would take 2,000 to 5,000 to 10,000 trucks just to ship 5,000 bopd continuously.
And if for whatever reason they didn’t want to go after transport they could simply target each wellhead with a single smart bomb from an aircraft well above the ISIS AAA capabilities. That would be more costly but ISIS has no capability to bring those wells back on line.
GregT on Sat, 21st Nov 2015 12:29 pm
“oil is moved from the wellhead to the transport system: it first collects in “field storage tanks”. Needles to say those would be very easy stationary targets.”
That would require precision munitions of some sort, and somebody to give the orders to deploy them. Hmmm….
rockman on Sat, 21st Nov 2015 1:02 pm
Greg – But it takes me back to the days when Nixon authorized the bombing in N Vietnam. That accomplished what it accomplished. But it didn’t win the war.
As I said elsewhere: Jesus loves the Marine Corps: they can help keep heaven supplied with fresh souls…including their own. Marines die but the Corps lives on and thus so do their memory. The real question is how much more of our tax $’s pissed away would our voters tolerate?
GregT on Sat, 21st Nov 2015 2:08 pm
“The real question is how much more of our tax $’s pissed away would our voters tolerate?”
The real question Rock, is how to manipulate the voters into tolerating more of their tax dollars being spent on the MIC. I think that the answer to this should be very clear to anyone who’s been paying attention.
rockman on Sat, 21st Nov 2015 4:02 pm
Greg – You may recall my view: it’s the politicians that are manipulated by the voters. They follow or don’t get re-elected. The politicians run their various rhetorics but for the most part they are just saying what they think their voter base needs to hear. Sorta like the chicken/egg dynamic: what came first…the politicians’ position or the voters’ position. Same with big $ contributors. But at the end of the day it boils down to the vote count.
apneaman on Sat, 21st Nov 2015 4:52 pm
As I have said before, there is no MIC without fossil fuels and their infrastructure, so for that reason alone (there are others)there will never be any real attempts at reduction. Every realist should know this. Votes don’t mean shit – they are going to do whatever is necessary to carry on. It is still in their interest to let the sheeple think there is hope and that they have “top men” looking out for their best interests. There will be another hopey “agreement” at COPOUT21 in a couple weeks and the greenies will claim another hollow victory and the conservatards will grumble and bitch and not one single thing will change and the Keeling curve will keep climbing. No worries really since we are already cooked.
The Elephant in Paris – the Military and Greenhouse Gas Emissions
“There is no shortage of words in the latest negotiating document for the UN climate negotiations taking place in Paris at the end of November – 32,731 words to be precise, and counting. Yet strangely there is one word you won’t find: military. It is a strange omission, given that the US military alone is the single largest user of petroleum in the world and has been the main enforcer of the global oil economy for decades.
The history of how the military disappeared from any carbon accounting ledgers goes back to the UN climate talks in 1997 in Kyoto. Under pressure from military generals and foreign policy hawks opposed to any potential restrictions on US military power, the US negotiating team succeeded in securing exemptions for the military from any required reductions in greenhouse gas emissions. Even though the US then proceeded not to ratify the Kyoto Protocol, the exemptions for the military stuck for every other signatory nation. Even today, the reporting each country is required to make to the UN on their emissions excludes any fuels purchased and used overseas by the military.”
http://www.resilience.org/stories/2015-11-19/the-elephant-in-paris-the-military-and-greenhouse-gas-emissions
BobInget on Sat, 21st Nov 2015 5:47 pm
you tell em Apneaman !
dissident on Sat, 21st Nov 2015 7:08 pm
@rockman,
You can’t be serious with the pickup truck barrel service replacing oil tankers. That is total nonsense. If the tanker trucks extended in 50 km convoys, the pickups would have to be in the thousands of km convoy length. ISIS will not have enough pickups and any that they try to gather up into this ridiculous effort will be bombed. So, no, the article is full of BS and oil transport can be shut down very effectively with bombing.
apneaman on Sat, 21st Nov 2015 7:21 pm
The U.S. Government Supplied ISIS’ Iconic Pickup Trucks
http://www.globalresearch.ca/the-u-s-government-supplied-isis-iconic-pickup-trucks/5481804
Video: U.S. Apache Attack Helicopter Follows Behind ISIS Convoy … Doesn’t Fire a Single Shot
http://www.washingtonsblog.com/2015/11/video-u-s-apache-attack-helicopter-follows-behind-isis-convoy-into-syria-from-iraq-doesnt-fire-a-single-shot.html
dissident on Sat, 21st Nov 2015 7:47 pm
http://www.thedailysheeple.com/wp-content/uploads/2015/02/ISIS-made-in-USA1.jpg
I am quite sure that in reality the US air force presence in Syria since 2014 was to suppress the Syrian air force and not to harm ISIS. Those bloody Russian ruined everything and McCain is choking on his hate:
http://russia-insider.com/en/politics/did-john-mccain-actually-literally-choke-his-own-rage/ri11352
makati1 on Sun, 22nd Nov 2015 4:45 am
Paulo1, I ALWAYS skip to the end to see who signs the paycheck before I read an article. Saves hours of wasted time reading junk. I may skip to the comments of those article to see if my decision was correct.
rockman on Sun, 22nd Nov 2015 8:26 am
d – “You can’t be serious with the pickup truck barrel service replacing oil tankers. That is total nonsense.” Chill out you goofball. LOL: that was exactly the point I was making. A point that apparently everyone else got.
Davy on Sun, 22nd Nov 2015 6:11 pm
Here is a good intro to the Russian MIC:
https://www.youtube.com/watch?v=zWM3fmtLT_4
waterpowerman1 on Mon, 23rd Nov 2015 2:46 pm
Ya know this is pretty stupid- spend a million dollar smart bomb to destroy a 100 thou $ truck with a couple hundred dollars worth of oil on one side then give them (their buddies actually)hi-luxes for free.