Precise look at the rise of ISIS and their exponential financial growth as a result of building a system of highly lucrative oil black markets.
Consider those who make their fortunes from oil. Mukesh Ambani ($22.4bn), Len Blavatnik ($19.8bn), Harold Hamm ($17.8bn), Islamic State militants ($2bn).
Yes, that’s right. Thanks to several years of murder, looting, destruction and violence, the militants have gone from being a ragtag band of extremists to the richest terror group in the world.
The jihadists came from nowhere but now control 11 oil fields in Iraq and Syria, which accounts for an estimated $1.2m of oil from Iraq and $3m from Syria every single day. It is pumping, refining and selling oil just like anyone in OPEC.
The burning question is then – who could possibly buy from this ruthless and reviled group?
Smuggling oil is big business in Iran and Turkey, a fashion that began in the time of Saddam Hussein, and experts believe these two countries are behind it. In an interview with CNN, Luay al-Khatteeb, the director of the Iraq Energy Institute, explained that “IS smuggles the crude oil and trades it for cash and refined products, at a refined price.”
One would imagine it would be impossible to find the balm to sooth a troubled conscience over doing business with an organisation that burns people alive in cages or carries out mass beheadings. But it appears that getting a 75% discount for a barrel of oil is just the trick. It is worth it to Islamic State because of the speed with which they can get rid of the ever giving product. Through this the official undersecretary to the Treasury David Cohen remarked in 2014, “ISIS has amassed wealth at an unprecedented pace.”
Al-Khatteeb explains how it gets from IS’ hands to distributors. “The crude is transported by tankers to Jordan via Anbar province, to Iran via Kurdistan, to Turkey via Mosul, to Syria’s local market and to the Kurdistan region of Iraq, where most of it gets refined locally,” he told CNN. “Turkey has turned a blind eye to this and may continue to do so until they come under pressure from the West to close down oil black markets in the country’s south.”
It will have to be considerable pressure. In October 2014 that process was started under the US’ instruction. It involved 20 countries and organisations to discuss how to halt the spread of ISIS’ wealth, but Cohen consoled against high hopes for swift action, “We have no silver bullet, no secret weapon to empty ISIL’s coffers overnight. This will be a sustained fight and we are in the early stages.”
The militants are now believed to control 50% of Syria. The Iraqis have just realised after months of being told ISIS were on the way out, that that’s a pipe dream.
Fighters still stream to ISIS, attracted by the group’s mythologizing and power and perhaps also to its reputation as a ‘plush holiday resort’ as its self-penned tourist guide reports. The book written by a British jihadist who skipped bail and is thought to have joined ISIS in Syria who boasted about the group’s “dead serious” attitude about its transport networks – “The natural progression for the transport network in the Islamic State has to be trains then ships and aeroplanes,” it states, “but everything is on the table: zeppelins, hovercrafts, trams [and] microlites.”
The group’s ultimate aim is to create a caliphate, a form of Islamic government. It is despite the best efforts of the world’s superpowers, becoming a reality. A recent article in The Economist pointed to – beheadings notwithstanding – “their administrators win plaudits for their efficient management, clean streets and timely payment of salaries. They have partially restored electricity to Mosul, refurbished a hotel there and opened Saddam Hussein’s palaces for weekend strolls.”
When you consider that the Islamic State is already being viewed as a reality by many experts, the notion of it being an oil rich exporter – though terrifying and alarming – isn’t such a leap after all.