As part of its black economy, oil sales earn ISIS $2 million every day

Luay Al Khatteeb writes: The United Nation Security Council dramatically escalated the conflict with the Islamic State of Iraq and Levant (ISIL), Al Nusra Front (JNF) and other Al Qaeda splinter groups by passing UN Resolution 2170 in August 2014, thereby expanding the range of retaliatory measures (short of military action) against individuals associated with those groups. This UN Security Council is the latest in a series of draconian UN Resolutions against terror groups pursuant to its responsibility of Forgotten Obligations and affirming its primary role as peacekeepers enshrined in the UN Charter.

The cumulative effect of these resolutions recognizes the long term threat posed by ISIL which was addressed by President Obama in a White House briefing on the 18 August. What Obama did not address however was ISIL’s threat to global energy security, which forms (in part) the premise of this article.

The implications of these UN resolutions for ISIL are clear. The UN Security Council has effectively decided to cut off ISIL’s main lifeline, which is the illicit black economy derived mainly from the oil resources under its control. Consequently, ISIL’s ability to recruit and equip members, consolidate gains if not expand its theatre of operations will be affected. Furthermore, middle men including financiers, arms dealers, traders and Member States now face punitive action for failing to comply.

Whilst I have aired my thoughts on the main features of ISIL’s black market economy, I set out in this Article, my analysis of the background and significance of the UN’s latest bold move against ISIL, ANF and other Qaeda splinters.

Contrary to the media’s one dimensional portrayal of ISIL as a bunch of nihilist extremists, ISIL have moved relatively fast and in a relatively sophisticated manner to create an ‘ad-hoc’ black market economy over the territories it controls. ISIL is no longer desperate for donors’ funding to continue and expand their operations given they now possess a loosely integrated and thriving black economy consisting of approximately 60% of Syria’s oil assets and 7 oil producing assets in Iraq. It has successfully achieved a thriving black market economy by developing an extensive network of middlemen in neighboring territories and countries to trade crude oil for cash and in kind.

ISIL’s estimated total revenues from its oil production are around USD $2 million a day! Put simply, ISIL are in a position to smuggle over 30,000 barrels of crude oil a day to neighboring territories and countries at a price of between USD $25 to USD $60 per barrel depending on the number of middle men involved. [Continue reading…]

Print Friendly, PDF & Email