Despite being recently defeated from their major strongholds of Mosul and Tel Afar in Iraq, more than two years after Iraqi forces specifically sought to retake oil-rich areas from the Islamic State, its militants are continuing to steal, spill and smuggle crude oil from Iraqi oil fields as a means to wreak havoc and fund their spluttering but surviving campaign of terror.
“While ISIS is steadily losing its hold on populated areas, it still controls a not-insignificant portion of territory that contains oil and oil infrastructure,” Justin Dargin, global energy expert at the University of Oxford, told Fox News. “As a result, ISIS is continuing at a frantic pace to produce and smuggle as much oil as possible in a bid to acquire its ever-declining revenue base.”
According to Iraq’s state-run North Oil Company (NOC), ISIS still controls scores of wellheads in parts of the northern Ajil field which are considered contested land between Iraq and Kurdish governments. The terror network still controls some 75 percent of the Alas Dome in the nearby and prominent Hamrin field, NOC adds.
ISIS gained control of the two fields in June 2014 after its sudden assault on the country’s second-largest city of Mosul. While Iraqi forces took back much of the region in early 2015, the militants have retained a foothold in the more remote parts, such as the provinces of Salahuddin and Diyala. The black-clad jihadist army can access these areas from its last major Iraq stronghold of Hawija near the oil-rich city of Kirkuk.
It is in these areas that the terrorists are reported to have orchestrated a massive oil spill spanning thousands of acres southbound from the Hamrin Mountains and into emancipated territory, where it is even flooding into the streets of villages just northeast of Tikrit, according to Iraq Oil Report and satellite imagery of the area.
But beyond its severe environmental impact, ISIS is still making money from the trade. The group continues to exploit local, financially desperate workers to continue the production and delivery of oil, and relies heavily on the professional technicians and engineers previously working in the areas to maintain and administer wells and production.
“ISIS was able to utilize to a great degree the old smuggling networks established during the Saddam (Hussein) regime to evade the international sanctions regime,” Dargin said. “While there has been a significant degradation of these networks due to the bombardment and global efforts against ISIS, they still exist. When one smuggling route is under threat, ISIS is able to switch to another route.”
Indeed, ISIS’s capacity to extract, refine and export oil has been markedly degraded over the last two years as it has now lost some 90 percent of the land it once dominated. But since the group’s shocking rise to prominence in 2014, the terrorists have managed to survive through their illicit oil and gas trade. At its pinnacle in 2014 and much of 2015, it was estimated ISIS was making as much as $50 million per month from its contraband energy operations, a figure that has been reduced now to a still-notable $10 million or less, according to Dargin.
Lee Oughton, a longtime Iraq security expert and former global manager for executive protection at oil field service giant Halliburton, pointed out that smuggling and selling endeavors have gone on with the help of splinter cells that have allowed illegal trafficking into Turkey, Syria and Iran.
“ISIS and other militia groups often have state-of-the art weapons systems and intelligence networks just as good as some of the best intel agencies in the world,” he contended.
Oughton also observed that ISIS-originated oil is known to have been trafficked up through Iraq and into Turkey, and refined inside Turkey and then either utilized within the country or extended outside its borders. The U.S. State Department in January also accused the Syrian government of making deals with the militants to buy the black market oil, which Bashar al-Assad's regime denied.
But the reality is that in majority of sales, the recipients of the terror-financing oil often have no idea of its starting point.
“That is why ISIS oil operations have been so successful,” explained Joseph Fallon, Islamic extremism expert and U.K. Defense Forum research associate, adding that the smuggling is essentially undertaken by an ISIS network of “venture capitalists” using smuggling routes across Syria, Iraq and Turkey where they then bribe or threaten government officials to accept their oil and get paid market prices. It is then mixed with the oil in legitimate pipelines, thus becoming untraceable, and buyers often are unaware of its terrorist origins.
“ISIS makes its money up front selling to smugglers who take the risk and, if successful, make a significant profit. In addition to trucks and tankers, smugglers use boats, horses or go on foot,” Fallon continued. “ISIS is unlike other terror groups, the Taliban or Al Qaeda, because the transportation routes for smuggling are also used by international energy companies; this source of revenue cannot be eliminated by traditional sanctions on a terror group’s banking network. Because of oil laundering, no one knows if the oil purchased is from ISIS.”
Dargin asserted that those who knowingly purchased the ISIS oil would often wire payments to female members of ISIS in countries like Turkey, upon the belief that women would not be as suspicious as men upon receiving international transfers.
“The money would then be physically transported into Syria and Iraq (to the terrorists) by courier,” he said.
Hussein Allawi, CEO of the Akkad Center for Strategic Affairs and Future Studies and a national security professor at Baghdad’s Al Nahrain University, also stressed that ISIS continues to profit from “oil derivatives” within the communities it controls. Civilians are left with little choice but to buy gasoline, diesel and fuel to supply electricity from the militants reigning over them.
And before being run out an area by liberating forces, ISIS in its final blow notoriously sets oil wells and tankers on fire to limit vision and prohibit coalition airplanes from striking the area. The terrorists also set pour oil into the streets and open taps on pipelines not only to damage towns, but also to trigger major pollution in the Tigris River, which empties into the Persian Gulf.
In Allawi’s view, only a solid partnership between Baghdad and locals will be the key to ensuring another terror faction like ISIS doesn’t swoop in and imitate the financing-with-fuel model of militancy.
“The control of the land by Iraqi forces and people is the guarantor,” he added. “But we need an economic program for development that makes communities work in the oil areas for a partnership to protect wealth from theft, smuggling and financing of terrorist groups.”