To Become Oil Barons, ISIS Has Sold To Neighbors And Enemies Existing black-market structures have helped the Islamic State convert oil into cash - and their customers have included their ardent foes across borders in Turkey and Southern Iraq.
NPR logo

To Become Oil Barons, ISIS Has Sold To Neighbors And Enemies

  • Download
  • <iframe src="https://www.npr.org/player/embed/351978977/351978978" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
To Become Oil Barons, ISIS Has Sold To Neighbors And Enemies

To Become Oil Barons, ISIS Has Sold To Neighbors And Enemies

To Become Oil Barons, ISIS Has Sold To Neighbors And Enemies

  • Download
  • <iframe src="https://www.npr.org/player/embed/351978977/351978978" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

Existing black-market structures have helped the Islamic State convert oil into cash - and their customers have included their ardent foes across borders in Turkey and Southern Iraq.

SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. Coalition forces led by the United States have flown into Syrian airspace for the first time this week. Their aim - to destroy oil refineries run by the group that calls itself the Islamic State. Here's Secretary of Defense Chuck Hagel yesterday.

(SOUNDBITE OF ARCHIVED RECORDING)

SECRETARY OF DEFENSE CHUCK HAGEL: With our air partners, we've conducted 43 air strikes in Syria. Combined with our ongoing efforts in Iraq, these strikes will continue to deny ISIL freedom of movement and challenge its ability to plan, direct and sustain its operations.

SIMON: U.S. pilots flying the F-22 Raptor jet were in the lead of those air strikes. The plane sat on the tarmac through the conflicts in Libya and Afghanistan. And in a moment, we'll ask the man in charge of the fleet why they've been deployed now.

First, a closer look at the oil fields and refineries which reportedly earn $2 million a day on the black market for the Islamic State or ISIS. The oil is processed in small-scale, movable refineries then traded on the black market. We spoke earlier to Kate Dourian in London. She's the senior editor at the Middle East Economic Survey and Energy Policy magazine. And she explained how much oil the Islamic State controls.

KATE DOURIAN: They do business. Yeah. They control 60 percent of Syria's oil fields. Now that doesn't mean they're producing from all of them or they're producing at capacity, but they're producing enough to fund their operations. And they have a couple of fields - a few fields in Iraq, less than they did when they first started. But they still have, you know, maybe five oil fields in Iraq.

SIMON: And how do they produce it? How do they market it, process it, sell it?

DOURIAN: Some of it is being sold on the market in Raqqah, which is their sort of so-called capital in Syria. Some of it goes to Turkey across the border. Some of it ends up in Kurdistan where it goes to other teapot refineries. And the Kurds look the other way because they don't want the price of fuel to go up at a time when they're suffering a cash crisis. People haven't been paid their salaries. So there's collusion on several levels.

SIMON: Any reason to think any of it winds up in the U.S. or Europe?

DOURIAN: No, no, no, no. I think we're talking very small volumes. I think we're talking a bit of diesel fuel going to Turkey where it's sold below market value. So some of it's being stolen from - siphoned from pipelines in Iraq because these pipelines are full and they're not going anywhere so they're siphoning it off. And you have even Iraqis involved in selling the stuff. But no, it's not going anywhere. It's not going by ship. It's not going by pipeline. It's just bits and pieces that are being sold, but enough to generate the kind of revenues we're talking about.

SIMON: Can you explain the mobile refineries to us?

DOURIAN: Yes. They're very, very basic refineries. I mean, they don't produce the valuable products that a more sophisticated refinery would produce. So typically, they would produce something like fuel oil and gas oil. So we're talking the heavy stuff that you actually need when you're fighting a war.

SIMON: And, Ms. Dourian, from the distance we both have from events on the battlefield, can you tell if these airstrikes will do much to hinder the oil economy of ISIS?

DOURIAN: I think they probably will because they will force them to - I mean, suspect that if you don't have these modular units, you're not going to be able to refine it. And there's not very much you can do with crude oil. I think it might have - but again, you know, nobody's there on the ground. There are no journalists there. There are no aid workers. It's all hearsay. You know, you're getting second- and third-hand reports as to what's going on. So people guess it's somewhere between 50,000 and 80,000 barrels a day. But most of it was staying in Syria. I mean, what was being produced in Syria was not being smuggled out. So I think yes, if there is damage to these facilities, then I think it would hurt them. And that's why the airstrikes are targeting these modular units because you do want to cut off the lifeline. It is the major source of funding for them.

SIMON: How does it work out that countries and interests who are effectively at war with each other now are still doing business with each other?

DOURIAN: Well, that's what somebody said to me the other day. I said but I don't understand, you know, who's buying it? I mean, people have said - nobody's jumping up and saying, oh, I'm buying some of this stuff because there is a reputational risk of dealing with any of this illicit oil. But there has been a network of smuggling. It's not new. And they're not doing it directly. They're doing it through brokers. And then the brokers take it and sell it on. So if you wanted to make a quick buck, you don't really care where it comes from. I mean, Iran was doing it during sanctions. Iraq was doing it when they were under U.N. sanctions. And somehow they found buyers. So it's nothing new that there is a network of smuggling. It's historic. It's been there for a long time. And yes, they will fight each other on the ground, but at the same time, do business together. It's something that we don't comprehend, but it is going on.

SIMON: Kate Dourian is with the Middle East Economic Survey. She spoke to us from London. Thanks very much for being with us.

DOURIAN: Thank you.

Copyright © 2014 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.