Inside Islamic State's oil empire

Inside Islamic State's oil empire

Six months after it grabbed vast swaths of territory, the radical militant group is earning millions of dollars a week from its Iraqi oil operations

Islamic State has consolidated its grip on oil supplies in Iraq and now presides over a sophisticated smuggling empire with illegal exports going to Turkey, Jordan and Iran, according to smugglers and Iraqi officials.

 

Six months after it grabbed vast swaths of territory, the radical militant group is earning millions of dollars a week from its Iraqi oil operations, the US says. Coalition air strikes against tankers and refineries controlled by Isis have merely dented – rather than halted – these exports, it adds.

 

The militants control around half a dozen oil-producing oilfields. They were quickly able to make them operational and then tapped into established trading networks across northern Iraq, where smuggling has been a fact of life for years. From early July until late October, most of this oil went to Iraqi Kurdistan.

 

The self-proclaimed Islamic caliphate sold oil to Kurdish traders at a major discount. From Kurdistan, the oil was resold to Turkish and Iranian traders. These profits helped Isis pay its burgeoning wages bill: $500 (£320) a month for a fighter, and about $1,200 for a military commander.

 

The US has pressured Iraqi Kurdistan’s leaders to clamp down on smuggling, with limited success. But oil is still finding its way to Turkey via Syria, with Islamic State deftly switching from one market to another, smugglers say, with cheap crude channelled to Jordan instead.

 

On Monday, a UN panel urged countries neighbouring Iraq and Syria to seize oil trucks that continue to flow out from jihadist-occupied territory.

 

“We buy an oil tanker carrying around 26 to 28 tonnes [of oil] for $4,200. We sell it in Jordan for $15,000. Each smuggler takes around eight tankers a week,” Sami Khalaf, an oil smuggler and former Iraqi intelligence officer under Saddam Hussein, told the Guardian.

 

Khalaf, who lives in Jordan’s capital, Amman, said smugglers typically paid corrupt border officials $650 to pass through each checkpoint.

 

Iraqi intelligence officials confirm that Isis uses Anbar province, which shares a border with Jordan, as a major smuggling hub. Isis controls three major oilfields in Iraq – Ajeel, north of Tikrit, Qayara, and Himrin.