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ISIS and oil

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On radio 4 this morning there was a piece about the oil price, and the OPEC summit today. The discussion moved to the issue of ISIS and oil, noting that they make $1 million per day from sales. The commentator also said that disrupting oil production is potentially a very effective way of harming ISIS; and that the RAF raids yesterday were the first time that well heads have been targeted.

This seems odd. It's not like their location is a secret. Or that the US, France and Russia lack the weaponry to target them. Or the analysis that this would be an effective strategy to adopt.

So I find it hard to understand why it's not been done until now. I'm not a conspiracy theorist, but can anyone suggest an explanation for this that doesn't involve some pretty murky intentions that are not currently being openly discussed?
 MG 04 Dec 2015
In reply to no_more_scotch_eggs:

Possibly that if ISIS territory is seen as only being held temporarily, as is hoped, destroying key industrial infrastructure has long term economic effects?
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 Trangia 04 Dec 2015
In reply to no_more_scotch_eggs:

There is a bit on BB1 at this very moment discussing this. It seems that money derived from oil has been falling steadily over the last year or so due to the reduction in oil prices. Oil is no longer Daesh's main source of income.

Most of their income is being raised by taxation and extortion from the populations of the territory they have seized.

They are also providing infrastructure and services for these populations and are well aware of the importance of winning hearts and minds in these areas.

Combating this and removing these sources of income is going to be a much harder task for the coalition, and will be virtually impossible short of winning back this territory by military force.

One surprise from these discussions is that they are selling gas and possibly electricity to the Assad regime because they control much of the infrastructure required to supply this!!
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 dread-i 04 Dec 2015
In reply to no_more_scotch_eggs:

When Sadam blew up well heads in Kuwait, he was accused of eco crimes against humanity. The apocalyptic footage of huge plumes of black smoke covering the middle east was a reminder of just what a bad man he was. They were even visible from space.

But, when we blow well heads we'll do it in an eco friendly way, because we're the good guys.
 Phil79 04 Dec 2015
In reply to no_more_scotch_eggs:

I read several articles about this in the last few weeks, as I was interested in who was buying the stuff and why it hasn't been stopped.

http://www.ft.com/cms/s/2/b8234932-719b-11e5-ad6d-f4ed76f0900a.html#axzz3tL...

This article gives some good info.

Essentially, ISIS seem to have control of oil production over such a wide area, that totally destroying the refining and distribution capacity would impact the civilian population (who buy much of both the crude product and refined fuels) and the moderate rebels (who also buy it) as much or more than ISIS itself.
MarkJH 04 Dec 2015
In reply to dread-i:


> But, when we blow well heads we'll do it in an eco friendly way, because we're the good guys.

How do you know the RAF hit the well-heads themselves? The MOD press release says "six targets on an oilfield". It would be an interesting comparison if it could be justified. Presumably you have seen pictures of burning oil wells etc.
 Trangia 04 Dec 2015
In reply to no_more_scotch_eggs:
Both Russia and the Syrian government have today condemned the RAF strikes.

I'm not sure why, but there already seem to be cracks in the Alliance Cameron seems to be relying on when he urged Parliament to back his policy of bombing.........
Post edited at 09:59
 dread-i 04 Dec 2015
In reply to MarkJH:

> It would be an interesting comparison if it could be justified.

It would indeed. Two, of many stories, are linked below. I don't know if it is actually the well head, or if that is just a word the media or government ministers associate with an oil field. I agree, it might make more sense to bomb the other infrastructure, pumps and pipes etc


http://www.theguardian.com/world/live/2015/dec/03/syria-airstrikes-britain-...
http://www.offshorepost.com/oil-fields-bombed-in-first-raf-syrian-air-raid/
 off-duty 04 Dec 2015
In reply to Trangia:

> Both Russia and the Syrian government have today condemned the RAF strikes.

> I'm not sure why, but there already seem to be cracks in the Alliance Cameron seems to be relying on when he urged Parliament to back his policy of bombing.........

By all accounts Assad is buying the oil produced by ISIS so attacks on oil targets will not be aiding him.
Really I suspect both Russia and Assad would like the coalition to concentrate on ISIS combatant forces only, to enable them to shore up/strike against the other more moderate opposition forces instead of being split on numerous fronts.
 gd303uk 04 Dec 2015
In reply to off-duty:

By all accounts? really? there are a few reports that Turkey has been buying oil from Isis its a bit convenient for the turkish president to accuse Assad and Russia of buying oil when there are a lot of reports to suggest turkey is buying Oil from Isis.
i am not saying Assad has and is not buying oil but its is far from all accounts.
 dread-i 04 Dec 2015
In reply to off-duty:

>By all accounts Assad is buying the oil produced by ISIS so attacks on oil targets will not be aiding him.

If one were the cynical type, one might presume that the global over supply of oil, that has caused the price to crash, could be rectified by taking out extra supply. Countries such as our friends the Saudis, could then raise prices, American shale would be viable again and stock markets would react in a positive way. But, this isn't about oil.
 Postmanpat 04 Dec 2015
In reply to dread-i:

> >By all accounts Assad is buying the oil produced by ISIS so attacks on oil targets will not be aiding him.

> If one were the cynical type, one might presume that the global over supply of oil, that has caused the price to crash, could be rectified by taking out extra supply. Countries such as our friends the Saudis, could then raise prices, American shale would be viable again and stock markets would react in a positive way. But, this isn't about oil.

It's the Saudis that wanted the price driven down.
 dread-i 04 Dec 2015
In reply to Postmanpat:

>It's the Saudis that wanted the price driven down.

They wanted the price driven down, to put American shale out of business. Lots of US oil companies have lost a lot of money and many of the projects will not be viable until the price rises substantially. There are also many reports that Saudi state is suffering from the low price and that it is unsustainable for them.
 Phil79 04 Dec 2015
In reply to dread-i:
> >It's the Saudis that wanted the price driven down.

> They wanted the price driven down, to put American shale out of business. Lots of US oil companies have lost a lot of money and many of the projects will not be viable until the price rises substantially. There are also many reports that Saudi state is suffering from the low price and that it is unsustainable for them.

No doubt its unsustainable in the long term, but they only need it to work in the short term. The plan appears to be to oversupply and soak up the costs with the massive cash reserves they have, while (hopefully) the US domestic shale producers go to the wall, and they regain some control over US supply. God (or perhaps Allah in this case) only knows how long they can sustain oversupply for though.

I cant see it working TBH, even if the current producers/companies are forced to stop production or mothball projects, surely it will become viable again once prices recover?

I guess the Saudis have had it there own way for so long, they don't like the fact their biggest customer has gained a fairly independent supply.
Post edited at 10:49
 Postmanpat 04 Dec 2015
In reply to dread-i:

> >It's the Saudis that wanted the price driven down.

> They wanted the price driven down, to put American shale out of business. Lots of US oil companies have lost a lot of money and many of the projects will not be viable until the price rises substantially. There are also many reports that Saudi state is suffering from the low price and that it is unsustainable for them.

Yes, but they can drive the price back up again whenever they want. They don't need ISIS oil production to be taken out.
 Simon4 04 Dec 2015
In reply to gd303uk:
> By all accounts? really? there are a few reports that Turkey has been buying oil from Isis its a bit convenient for the turkish president to accuse Assad and Russia of buying oil when there are a lot of reports to suggest turkey is buying Oil from Isis.

Most of those reports seem to emulate from Russia, or from Russian controlled sources. While that does not necessarily mean they are not true, or not partially true given that Turkey and in particular its semi-Islamist president has been playing a very ambiguous role throughout this conflict, it is best to treat Russian reports about Turkey, or vica-versa, with considerable caution.
Post edited at 10:58
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 Shani 04 Dec 2015
In reply to no_more_scotch_eggs:
Let's just get on to the elephant in the room....

ISIS are worth well over a BILLION dollars. If this money was physical, it would require vast storage areas. It would also be vulnerable to damage from air strikes, spoilage, theft etc....

But much of it is stored electronically. This means it is in the finance system and reachable by electronic means from ANYWHERE in the world. It also means the banking system is required to move it around.

And here is the elephant; the banking system is corrupt and lacks transparency. It is complicit in the laundering of dirty money. If we tackled ISIS' electronic money supply then their society would de-technologise rapidly and be reduced to a bartering system but one which could not afford sophisticated and extensive materials of war.

Follow the money. Always.
Post edited at 11:10
 gd303uk 04 Dec 2015
In reply to Simon4:
There are western reports out there,
but yes, even a stopped clock tells the right time twice a day

US special forces raided the compound of an Islamic State leader in eastern Syria
The target of that raid, was an Isis official responsible for oil smuggling, named Abu Sayyaf. well known to Turkey. From mid-2013, the Tunisian fighter had been responsible for smuggling oil from Syria's eastern fields, which the group had by then commandeered. Black market oil quickly became the main driver of Isis revenues , and Turkish buyers were its main clients.

http://www.nytimes.com/2014/09/14/world/middleeast/struggling-to-starve-isi...

http://www.ft.com/cms/s/0/6c269c4e-5ace-11e4-b449-00144feab7de.html#axzz3tL...

http://www.globalresearch.ca/yes-turkey-is-buying-oil-from-isis/5492795

http://uk.businessinsider.com/links-between-turkey-and-isis-are-now-undenia...

http://yournewswire.com/obama-remains-silent-on-evidence-that-turkey-buys-o...

http://www.infowars.com/obama-knows-that-turkey-is-buying-oil-from-isis-and...
Post edited at 11:36
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In reply to Shani:

Following that money might be a useful way of keeping track of them ? If your stock in trade is Islam, murder, violence, fear , intimidation...then cash is probably not as important as it is to you and me. Good point though
 neilh 04 Dec 2015
In reply to Shani:
It takes time to do this and usually the US nail it in the end ( you only have to look at FIFA to understand this). As long as USD $ are involved they will track it down. It just takes time and is not done at the " press of a button".

If the trading is not done in $ or let us say it is bartering or using anothe rcurreny then it takes longer or is almost impossible to do.
Post edited at 11:28
 tony 04 Dec 2015
In reply to Shani:

> Let's just get on to the elephant in the room....

> ISIS are worth well over a BILLION dollars. If this money was physical, it would require vast storage areas. It would also be vulnerable to damage from air strikes, spoilage, theft etc....

> But much of it is stored electronically. This means it is in the finance system and reachable by electronic means from ANYWHERE in the world. It also means the banking system is required to move it around.

How much? From what I've been reading recently, it seems that much of ISIS's revenue these days comes from tax (aka extortion) of local populations, and degrading the oil infrastructure isn't going to have the impact that some of our leaders would have us believe. I doubt much of the locally-derived revenue from extortion is electronic.
 Postmanpat 04 Dec 2015
In reply to Shani:

> And here is the elephant; the banking system is corrupt and lacks transparency. It is complicit in the laundering of dirty money. If we tackled ISIS' electronic money supply then their society would de-technologise rapidly and be reduced to a bartering system but one which could not afford sophisticated and extensive materials of war.

> Follow the money. Always.

Absolutely agree, but one assumes that it finds its way into Middle Eastern banks, is laundered very quickly, and then becomes incredibly hard to trace. Can the US, or anybody else, force banks in Saudi or the Gulf States to open up their books? Doubt it.
 The New NickB 04 Dec 2015
In reply to gd303uk:

Russia Today is certainly keen for us to believe that most of the IS oil is going to Turkey. But they would, wouldn't they!
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 gd303uk 04 Dec 2015
In reply to The New NickB:
as i said , even a stopped clock ', an all that ;

but just to be clear not all reports are from RT or Russian sources, lets avoid those reports for fear of being called un-credible !

http://www.theguardian.com/world/2014/nov/19/-sp-islamic-state-oil-empire-i...

and in the FT link i posted it is headlined,;
Isis sells smuggled oil to Turkey and Iraqi Kurds, says US Treasury


PS,
i didn't click the Dislike button BTW
Post edited at 12:07
 Phil79 04 Dec 2015
In reply to tony:

> How much? From what I've been reading recently, it seems that much of ISIS's revenue these days comes from tax (aka extortion) of local populations, and degrading the oil infrastructure isn't going to have the impact that some of our leaders would have us believe. I doubt much of the locally-derived revenue from extortion is electronic.

Yeah I would agree. They apparently make a fair proportion of their money from tax, I cant imagine they rock up with a chip and pin device when they do that!

Some further digging and I've found this, only skimmed the summary but makes interesting reading:

http://www.fatf-gafi.org/media/fatf/documents/reports/Financing-of-the-terr...
In reply to no_more_scotch_eggs:

Gd303uk's post on lemming's 'war' thread seems to answer my question- he quotes a pentagon spokesman stating that the reason the US hasn't been targeting the oil production is an assessment that it will be more harmful to the local population than to ISIS, and is likely to fuel extremism further.

Ok, I can accept that could well be true

In which case, why are we bombing the oil fields? It would seem that we are doing something that our closest ally judges would be counterproductive.

Even if we've got a different assessment, the fact that we appear unable to agree a common strategy with the US on this, never mind with turkey and Russia, doesn't leave me very hopeful that this is going to go well.

Baffling.
 Simon4 04 Dec 2015
In reply to tony:

> I doubt much of the locally-derived revenue from extortion is electronic.

Yes, but that can only last for a short time, essentially a slash-and-burn system where you pillage any existing wealth in an area but do nothing to increase it, while destroying any productive capacity in the area you control. Much as looting conquerors have always done, despoil somewhere and then move on when you have destroyed that place, which is partly why they use brutal conquerors methods of terror and intimidation, like Ghengis Khan or Tamurlaine. So they need more long-term and reliable sources of revenue and those can be gradually tightened up on.

Some of course is reported to come from looting antiquities, but that is probably small, as they are difficult to transport and dispose of.

It is dangerous to imagine that Islamic extremists like ISIS are stupid, underestimating your enemy. They are certainly deeply malign and barbaric, but there is frequently a logic to their actions, perverse though that logic is to us. And that logic requires continuing supplies of resources, including readily usable money to keep going - they have to maintain the "Caliphate" to keep up their Islamic USP, despite claims that if it were removed, they would simply move elsewhere, they have stuck their flag to a particular, though variable, piece of territory, it would be a considerable loss of face for them to be removed from it. So trying to dry up their finances certainly IS worth doing, even if pretty difficult to do comprehensively.

 neilh 04 Dec 2015
In reply to no_more_scotch_eggs:

I doubt that the usaf and the raf would have different assessments, considering the level of cooperation between the 2.Remember raf had pilots flying "training" missions over Syria until the summer.
 wbo 04 Dec 2015
In reply to no_more_scotch_eggs: Symbolism

They might be worth a billion, but that will include oil fields and stuff, not money in banks, bunkers.

 Shani 04 Dec 2015
In reply to wbo:

> Symbolism

> They might be worth a billion, but that will include oil fields and stuff, not money in banks, bunkers.

Not oil fields but does include military hardware, $2m a day from oil production and smuggling, mining (precious metals), extortion, ransoms and kidnapping (Japan paid $200m for the release of two citizens alone), taxation inside the Caliphate, crop control, antiquities....much of this is electronic.

This a poor region with maybe 6 million people in Iraq and Syria controlled by ISIS. The trades ISIS engage in are international and involve millions. Transferring suitcases of such cast sums is all but impossible - unless they are large denomination notes, in which case they are unspendable.
In reply to neilh:

> I doubt that the usaf and the raf would have different assessments, considering the level of cooperation between the 2.Remember raf had pilots flying "training" missions over Syria until the summer.

Ok... So if we've got the same assessment- the one that stopped the US bombing the oil production facilities- as it would be counterproductive- why on earth are we doing it...?

Still baffled.
 The New NickB 04 Dec 2015
In reply to gd303uk:

> as i said , even a stopped clock ', an all that ;

I think the key thing in my comment was the RT suggestion that most of the oil is going to Turkey.

I'm sure some is, but it's not just Turkey.

> i didn't click the Dislike button BTW

Don't worry I've got a follower!
 neilh 04 Dec 2015
In reply to no_more_scotch_eggs:

Because it may take years to trace the money. people forget there was a similar scandal about Iraqi oil being sold when there was a ban. It took them years to trace it back.

It looks simple to do, but it is not.
In reply to neilh:

Not sure i follow- US Pentagon spokesman reported to have said that the US hasn't been bombing oil production facilities as it will cause hardship to locals, turning moderate opinion against us and fuelling extremism

If we've got the same assessment, why would we bomb them?

Are we doing it for political reasons- so we can be seen to be doing something that wasnt already happening, even though it has been assessed it will harm the overall cause?

 Shani 04 Dec 2015
In reply to neilh:

> Because it may take years to trace the money. people forget there was a similar scandal about Iraqi oil being sold when there was a ban. It took them years to trace it back.

> It looks simple to do, but it is not.

That is because the banking system in cloaked in secrecy, obfuscation and extensively corrupt. Funny how governments want to intrude upon and monitor our personal communications and eavesdrop on phone calls and emails, yet when it comes to intelligence on international monetary transfer and storage - a largely electronic and so auditable phenomena, no one is willing to take the lead to open it up.

Follow the money.
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