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Oil Smuggling Highlights Challenges in Shutting Down IS Finances

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In the span of one year, Islamic State militants made more than half a billion dollars by seizing government banks, illegal oil sales, kidnapping and extortion, making them one of the wealthiest terrorist organizations in the world.

The United States, its allies and the United Nations are making efforts to shut down the money flows. Airstrikes in Iraq and Syria have knocked out oil fields and refineries. The United Nations Security Council has adopted strongly worded resolutions to prevent oil smuggling.

Pentagon spokesman Rear Admiral John Kirby said Friday that the Islamic State “certainly continues to get revenue from the oil industry black market” but that airstrikes have made a dent.
Michael Lynch, president of Strategic Energy and Economic Research, says oil is still being smuggled into Turkey and even being refined in Iraqi and Syrian backyard distilleries for local sales.

“I think it’s almost impossible to control unless you have essentially the rule of law in that area, and you just don’t have that,” he says.

​​An underground network of smugglers was first built up in the region when the world imposed economic sanctions against Saddam Hussein’s Iraq in the 1990s. And the Islamic State is following the same pattern, using Iraqi, Kurdish, Syrian and Turkish smugglers to move truckloads of oil from Iraq to Syria and Turkey’s Ceyhan port, where brokers blend it with other oil and ship it out.

Located relatively close to the Syrian border, Ceyhan is a major trans-shipment point for oil.

‘Blood oil’

Unlike blood diamonds – diamonds that are mined in war zones then sold to fund insurgencies in West Africa – the Islamic state “blood oil” is not being tracked, Lynch says.

“With blood diamonds you can kind of do tests to figure out where the diamond came from. With oil you can theoretically do the same thing, but somebody has to want to do it. So if the oil is being shipped off to some place like Greece, or Cyprus, for refining, or Italy, they are probably not trying to see if there are any chemical signs that the oil came from northern Iraq.”
According to the U.S. Treasury department, in 2014 the Islamic State group may have earned as much as several million dollars per week, or $100 million in total from the sale of oil and oil products to local smugglers.

Lynch says the majority of payments are in cash. And because smugglers are not shipping big tanker loads on the ocean but individual truck loads, the payments are simply passed between the truck driver and the producer, and then the truck driver and the person to whom it is delivered.

On February 12, the U.N. Security Council passed a resolution condemning any direct and indirect trade, in particular oil and oil products, with IS and other terrorist groups.

Expressing concern that vehicles coming and going from al-Qaida and IS-controlled areas of Syria and Iraq could be carrying everything from oil to gold and electronics, the resolution calls on states to step up their efforts to prevent and disrupt the trade.


voice of america

7 Comments on "Oil Smuggling Highlights Challenges in Shutting Down IS Finances"

  1. Plantagenet on Sat, 28th Feb 2015 5:03 pm 

    It would be a simple matter for obama to bomb the oil tankers carrying IS oil from Syria to Turkey. Curiously this isn’t being done.

  2. GregT on Sat, 28th Feb 2015 5:18 pm 

    Obama doesn’t bomb people Plant. Obama is an actor and a politician, not a soldier or a military strategist.

  3. Plantagenet on Sat, 28th Feb 2015 8:36 pm 

    Obama isn’t an actor, Greg. He is the president.

    Please educate yourself about the president’s duties—they are somewhat larger than you imagine.


  4. GregT on Sat, 28th Feb 2015 9:45 pm 

    LOL, Little Planter

  5. GregT on Sat, 28th Feb 2015 10:05 pm 

    “Most of us have witnessed a unique phenomenon in the history of American politics. We have seen a gifted orator without any proven ability, experience or training to lead the greatest country in the world literally talk his way into that position. What’s even more astonishing, however, is the gullibility and naivete of the majority of the American people and mainstream media.”

    Obama is an actor, installed into the White House by the corporate elite. He does what he is told to do, nothing more, nothing less. If he oversteps his boundaries, he will be read the riot act, or much worse.

  6. Apneaman on Sat, 28th Feb 2015 10:09 pm 

    The Petroleum Factor
    Wars for Resources?

    “Recent conflicts in Iraq, Libya, Syria, and Ukraine have ostensibly been about “bad guys” who threatened peace with weapons of one kind or another, or stifled freedom and democracy.

    Whatever the accusation, concerns about petroleum — oil and gas — are missing from official pronouncements. Yet each of these “hot spots” involves petroleum, a vital commodity for economies worldwide.

    Since 9/11, the West has intervened in one country after another. But snapshots of events in each country create a collage with recurring petroleum themes that deserve attention.”

  7. GregT on Sun, 1st Mar 2015 12:47 am 

    “Since 9/11, the West has intervened in one country after another.”

    Yep, ever since those cave dwellers from Afghanistan brought down the most secure nation in the world with box cutters, the ‘War On Terrorism’ has increased exponentially. Civil rights and freedoms have been eroded, and the best constitution ever written has been completely shredded.

    Wake up people, this is only the beginning. If you allow your own government to act outside of the law, the laws that protect you yourselves from tyrannical governments will also be stripped away. Anybody that is capable of murdering innocent civilians, and refers to them as ‘collateral damage’, doesn’t give a crap about human rights anywhere, including yours.

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