US Claims Victories By Striking ISIS Middlemen, But Militant Group Still Holds Strongholds With Oil

In the oil fields of Deir Ezzor in eastern Syria, members of the Islamic State group stand guard at the wells the organization owns, looking for any attackers, either in the air or on the ground, that would threaten the black gold. The oil is the militant group’s most prized possession now that it has lost production facilities and refineries in Iraq. The group also known as either ISIL or ISIS pumps thousands of barrels of oil there each day, according to oil experts and researchers interviewed by International Business Times. The organization then transports its product into northern Iraq, selling it to middlemen for profit. Although most of the oil is consumed domestically, some of it winds up in the hands of individuals who sell it for profit outside the territory held by the Islamic State group, such as in Iraqi Kurdistan and Turkey.

The militant group has lost control of major oil fields in Iraq during the past seven months, as well as the Baiji refinery, one of the largest in the country, so the oil trade in eastern Syria is now one of the only ways it can make money through trade. Its fields there appear to be in a quiet zone in the war being waged against the organization by the U.S.-led coalition. At least currently, it seems the group’s oil infrastructure in eastern Syria and in some of the smaller fields it controls in the Anbar province of Iraq are safe from attack.

The U.S.-led coalition is focusing on targeting Islamic State group leaders and middlemen, but analysts say that this strategy will not do enough to completely cut off its oil profit.

“Over the past month, we’ve killed 10 ISIL leadership figures with targeted airstrikes, including several external attack planners, some of whom are linked to the Paris attacks,” Army Col. Steve Warren, a representative of the U.S.-led military campaign against the Islamic State group, said at a press briefing last week. “Others had designs on further attacking the West.”

Among those killed was Abdul Qader Hakim, who facilitated the militants’ external operations and was linked to the Paris attack network, Warren said. He was slain in the northern Iraqi city of Mosul Dec. 26.

A coalition airstrike Dec. 24 in Syria killed Charaffe al Mouadan, a Syria-based Islamic State group member with a direct link to the suspected leader of the coordinated bombings and shootings in and around Paris Nov. 13.

The focus on hitting the militant group’s leaders has allowed the oil wells the organization controls and the pipelines that service them to operate almost at full capacity.

The Islamic State group has major strongholds in eastern Syria and western Iraq despite the U.S.-led airstrikes that have killed several of its leaders. Those strongholds include Deir Ezzor and Raqqa in eastern Syria; Fallujah in Iraq’s Anbar province; Mosul, the de facto headquarters of the militant group in Iraq; and parts of Iraqi Kurdistan such as Hawija. The group has access to major trade routes between the two countries, allowing it to continue to transport oil and other goods to fund its so-called caliphate, according to a report prepared by George Kiourktsoglou, a researcher at the University of Greenwich in the U.K.

The Islamic State group is selling oil not only to middlemen in Iraqi Kurdistan and Syria but also to buyers in Turkey who demand ultracheap prices, such as small shipping companies, Kiourktsoglou reported. At one point in 2014, the militant group sold 3,000 to 8,000 barrels a day on the high seas through the Port of Ceyhan in Turkey, he said.

“They were selling oil to the region and neighboring countries,” said Ahmed Sheikh Ali, a member of parliament in Iraq. “There were people that would buy buy oil from ISIS and sell it very cheap to people working with the Kurdish Regional Government in Iraq.”

The U.S. State Department has denied this claim.

Although the U.S.-led coalition has hit dozens of Islamic State group oil-truck convoys in Iraq and Syria, the organization’s infrastructure remains largely intact. The militant group is still in control of two oil fields in western Iraqi Kurdistan — the Najmah and Qaiyarah fields — where it is producing about 20,000 barrels of oil a day. The fields also have two power stations and connect to small pipelines that lead directly to Mosul.

“If you want to stop this, you have to bomb the oil fields,” said James Jeffrey, a former U.S. ambassador to Iraq and Turkey and deputy national security adviser under George W. Bush. “But this administration won’t do that. They say they fear civilian casualties.”

So, the Islamic State group continues to pump oil and sell it, although the profit is smaller now than it was in 2014 because it controls less land in Iraq. As a result, the militant group is relying on old allies among the Sunni tribes in Anbar province, ties that were developed long before the Iraq War and strengthened after former Prime Minister Nouri al-Maliki came into power.

Some of the Sunni tribes living in Anbar province are supporting the Islamic State group with fuel pumped from wells on their land, while others are giving the militant group other vital resources such as ammunition and weapons.

Consultants employed by energy companies in Iraqi Kurdistan said they are aware the Islamic State group is still selling to middlemen in the region and making a profit. Along with the State Department, they said the sales are just a “drop in the bucket” in comparison with the massive, legitimate oil trade going on in Iraqi Kurdistan.

“Going after these middlemen is so hard,” Jeffrey said. “And it is nearly impossible to get rid of them without destructing the entire oil market in that region.”

The Kurdistan Regional Government (KRG) is the most vulnerable entity operating in the oil market during the battle against the Islamic State group. The oil industry sits at the center of its economy.

Hoping to revive this economy via the oil trade, the KRG began exporting oil independently through the Kirkuk-Ceyhan Oil Pipeline in May 2014. At one point, Baghdad also could access the pipeline, but damage to the infrastructure and fighting effectively shut out the central government. Meanwhile, there are several smaller pipelines throughout Iraqi Kurdistan that connect to the larger pipeline.

The U.S. Treasury Department is spearheading its own campaign to ensure that Islamic State group funds cannot be used outside of the territory it controls. It is working with other countries in the coalition to track down financiers of the Sunni militant group and any bank transactions that could be tied to its leaders.

During the Iraq War, the U.S. deployed what were known as Iraqi Threat Finance Cells. The teams consisted of employees of the Defense and Treasury departments who were tasked with tracking down financiers of al Qaeda and collecting information whenever that group’s strongholds were seized. The teams actively worked to shut down the financing of al Qaeda on the ground. That approach is far different from the strategy promoted by the Obama administration, some analysts say.

“This administration wants to point the finger and tell everyone else that they aren’t doing enough, but at the same time they refuse to send troops in and take care of this thing,” Jeffrey said.