Oil smuggling finances Islamic State’s new ‘caliphate’ — at least until they can get the tourist numbers up!

Islamic State militants seized four small oilfields when they swept through north Iraq last month and are now selling crude oil and gasoline from them to finance their newly declared “caliphate.”

Near the northern city of Mosul, the Islamic State has taken over the Najma and Qayara fields, while further south near Tikrit it overran the Himreen and Ajil fields during its two-day sweep through northern Iraq in mid-June.

The oilfields in Islamic State hands are modest compared to Iraq’s giant fields near Kirkuk and Basra, which are under Kurdish and central government control. Most of the Islamic State-held oil wells – estimated by a Kurdish official to number around 80 – are sealed and not pumping.

But the monopoly over fuel in the territory it has captured gives the Islamic State leverage over other armed Sunni factions who could threaten its dominance in northern Iraq.

Iraqi officials say that in recent weeks the group has transported oil from Qayara to be processed by mobile refineries in Syria into low quality gasoil and gasoline, then brought back for sale in Mosul, a city of 2 million people.

Larger shipments of crude, some of them from Najma, are also sold via smugglers to Turkish traders at vastly discounted prices of around $25 per barrel, they said…

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I am beginning to think that despite how ridiculous this “caliphate” sounds, they do have something al-Qaeda and the Taliban in Afghanistan never had: oil and gas.

Actually Afghanistan is not devoid of resources either – it even has some oil itself. Yet al-Qaeda and Taliban did not seem to be able to exploit this.

The fields are undeveloped but still – ISIS seems to be somehow – what is the word – more plugged into how the modern world economy works.   I do not think it will be an easy task to dislodge them from the areas they have taken.

Can they spread further?  I doubt they can move far into the Shia south of Iraq.  The Shiites have militias too.

But they are harassing the Kurds.  If the West wanted to arm anyone now, it would not be questionable “rebels” in Syria, but the Iraqi Kurds.

See an interview with the Kurdish commander of the Kirkuk subdistrict for the Iraqi federal police here.

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