Skip to content

NOT INVULNERABLE: Islamic State's thriving bootleg oil operations may not be unsustainable

By Catholic Online (NEWS CONSORTIUM)
8/25/2014 (3 years ago)
Catholic Online (www.catholic.org)

Jihadists' black market trade is hugely inefficient, oil analysts say

Declared by U.S. Defense Secretary Chuck Hagel on Thursday called the group "as sophisticated and well-funded as any group that we've seen" and "beyond just a terrorist group," the Islamic State is using a vast network of stolen petrochemical goods to keep their war machine going. While all this stolen oil from captured areas keeps the organization afloat to the tune of $2 million daily, oil analysts say that these ill-gotten gains may not be sustainable - proving what may be IS' "Achilles heel."

Analysts say ISIS' fledgling petro-state is already running into problems.

Analysts say ISIS' fledgling petro-state is already running into problems.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
8/25/2014 (3 years ago)

Published in Middle East

Keywords: Islamic State, bootleg oil market, repression, embargo


LOS ANGELES, CA (Catholic Online) - The Islamic State insurgency has control over swatches of Syria and Iraq and has begun to lay the foundations to become a small petro-state.

Analysts say the fledgling petro-state is already running into problems.

SAVE Iraqi Christians from Genocide --

While the Islamic State and its Sunni allies are known to have dominion over extensive smuggling routes into Jordan, Turkey and Iran, some experts believe they have been turning a blind eye to the group's illicit tankers and makeshift pipelines.

There are also unconfirmed reports of the Islamic State bribing the Syrian regime with oil to avert airstrikes. "We're talking about a regional black market extending from Syria to Iraq, from Jordan to the southern part of Turkey," Luay al-Khatteeb, director of the Iraq Energy Institute says.

U.S. military officials have also begun to suggest that wider intervention in Iraq and perhaps even

U.S. military officials have also begun to suggest that wider intervention in Iraq and perhaps even Syria could be on the horizon.


The Islamic State has coerced employees of oil facilities in Syria and Iraq to keep working, stabilizing oil production to an unprecedented degree for a non-state actor. It's an approach that reflects the Islamic State's immediate need for cash to bankroll ambitious plans of regional expansion.

The Islamic State's black market trade is hugely inefficient. For example, at the extraction stage, the insurgents will never be able to match maximum flow rates without the investment and expertise of private oil companies, who of course won't want to do business with a feared extremist group.

Islamic State oil then needs to be pawned off to middlemen at rates discounted by up to 75 percent, according to some estimates, as a fixed distribution network would be easy pickings for U.S. and Iraqi missiles.

Organized smuggling operations, "capture a lot of the value, offering one price to whoever controls the fields and then caging quite a high mark-up, which will still be well below the local market price," Richard Mallinson, a geopolitical analyst at London-based consultancy Energy Aspects says.

Finding customers, even indirectly, from an armed network reviled for its brutality is not easy, even if it comes with a drastically reduced price tag.

"This really restricts the scale of operations. There's always a market for smuggled oil at that low price, but not one that will simply expand and expand," Mallinson adds.

U.S. military officials have also begun to suggest that wider intervention in Iraq and perhaps even Syria could be on the horizon. Many suspect the caliphate could still be wiped out in its infancy.

There are also further questions about just how long Iraq's Sunnis will continue to tolerate the extremist takeover of their lands.

"Now that Western forces are operating more surveillance on Islamic State terrorists, I'm sure they can better identify where trucks are being filled, what routes they're taking, what borders they're crossing," said Mallinson.

---


'Help give every student and teacher Free resources for a world-class moral Catholic education'


Copyright 2018 - Distributed by THE CALIFORNIA NETWORK

Pope Francis Prayer Intentions for JANUARY 2018
Religious Minorities in Asia.
That Christians, and other religious minorities in Asian countries, may be able to practise their faith in full freedom.


Comments


More Middle East

Will protests in Iran bring religious freedom for Christians? Watch

Image of Protests have rocked Iran, which many hope will result in concessions from the hardline regime, but most experts think changes are unlikely.

Ongoing protests in Iran could be a sign of hope for repressed religious minorities, if protesters demand that conscience rights be ... continue reading


2,700-year-old seal discovered in Jerusalem confirms Biblical truth Watch

Image of The seal may have been used as a souvenir or to accompany special, important documents.

Archaeologists have announced the discovery of a Biblical-era seal in Jerusalem. The 2,700-year-old artifact once belonged to a governor of ... continue reading


Suicide bomber kills 8 at church in Pakistan Watch

Image of A suicide bomber killed eight people at a Methodist church in Pakistan.

At least eight churchgoers were killed and another 30 injured in a double suicide bomber attack at a Methodist church in southwest ... continue reading


Vatican concerned over President Trump's decision in Israel Watch

Image of U.S. President, Donald Trump announced he would be moving the U.S. Embassy in Israel to Jerusalem.

Following U.S. President Donald Trump's Dec. 6 notice that he will be moving the U.S. embassy in Israel to Jerusalem, the Holy See has ... continue reading


Pope Francis opposes Trump plan to move embassy to Jerusalem Watch

Image of President Trump has announced the U.S. embassy will move from Tel Aviv to Jerusalem.

President Trump is announcing that the U.S. embassy in Tel Aviv, Israel will soon be moved to Jerusalem, which is the actual capital of ... continue reading


Never Miss any Updates!

Stay up to date with the latest news, information, and special offers.

Information
Learn about Catholic world

Catholic Online
Inform - Inspire - Ignite

Catholic Online Saints
Your saints explained

Catholic Online Prayers
Prayers for every need

Catholic Online Bible
Complete bible online

Catholic Online News
Your news Catholic eye

Daily Reading
Today's bible reading

Lent / Easter
Death & resurrection of Jesus

Advent / Christmas
Birth of Jesus

Rest of Catholic Online
All Catholic world we offer

Services
Products and services we offer

Catholic Online Shopping
Catholic medals, gifts & books

The California Network
Inspiring streaming service

Advertise on Catholic Online
Your ads on catholic.org

Catholic Online Email
Email with Catholic feel

Catholic Online Singles
Safe, secure Catholic dating

The California Studios
World-class post production service

Education
Learn the Catholic way

Catholic Online School
Free Catholic education for all

Student Classes
K-12 & Adult Education Classes

School Teachers
Teacher lesson plans & resources

Support Free Education
Tax deductible support Free education

Socials
Connect with us online

Catholic Online on Facebook
Catholic social network

Catholic Online on Twitter
Catholic Tweets

Catholic Online on YouTube
Enjoy our videos

Catholic Online on Instagram
Shared Catholic moments

Catholic Online on Pinterest
Catholic ideas style inspiration

Catholic Online Logo

Copyright 2018 Catholic Online. All materials contained on this site, whether written, audible or visual are the exclusive property of Catholic Online and are protected under U.S. and International copyright laws, © Copyright 2018 Catholic Online. Any unauthorized use, without prior written consent of Catholic Online is strictly forbidden and prohibited.