ISIS Energy Security

by Sara Westfall

Just as traditional states worry about their energy security, so too does the Islamic State of Iraq and Syria (ISIS), especially now that it controls large swaths of territory. Some of that territory includes oil fields and small refineries and some of the oil and gas produced there is smuggled through neighboring states. These operations represent an important part of ISIS funding. U.S. airstrikes, however, have started to target refineries under its control and have put pressure on neighboring countries to curb smuggling. Still, if the United States seriously expects to stop ISIS, it must apply even more pressure on this crucial, but vulnerable, aspect of ISIS operations.

Since its rampage across Syria and Iraq began earlier this summer, ISIS has taken over 11 oil fields, including the Omar field, which is Syria’s largest. By some estimates, ISIS controls 60% of oil producing fields in eastern Syria. However, ISIS has only one refinery in Iraq and some small refineries in Syria, with major refineries in both countries still under government control. Moreover, it is not able to fully use these refineries as they lack the expertise that was previously supplied by international companies that left the area when the civil war broke out in Syria. ISIS has set up mobile refineries capable of refining 500 to 1,000 barrels per day to refine the crude oil, but it is a dangerous process.

ISIS also sells crude oil to local Iraqis and Syrians and smuggles it into Turkey through its porous border with Syria. In Turkey, ISIS sells the crude oil through middlemen to small businesses, sometimes around 40% cheaper than the market rate. Despite the fact that Turkish officials have vowed to crack down on illegal smuggling, the trade continues and is often done with aid from the Turkish gendarmerie. ISIS also trades crude oil for refined gasoline as its mobile facilities cannot meet demand. Most of it comes from Turkey. The money from the sales goes towards equipment, providing services, and its soldiers’ salaries.

Thirteen U.S. airstrikes in September targeted refineries and oil fields under ISIS’s control in Syria. According to U.S. officials, these refineries produced between 300 and 500 barrels per day of refined gasoline. Luay Al-Khatteeb, director of the Iraq Energy Institute at Brookings Institutions’ Doha Center, estimates that U.S. strikes against ISIS’s oil refineries have reduced profits from between $2 and $3 million per day to just thousands of dollars per day. The United States will not, however, target refineries in Iraq, as Baghdad has asked Washington not to destroy oil infrastructure its territory. In mid-November, the Iraqi army retook the Baiji refinery, its largest and an important victory for Baghdad.

ISIS is almost completely independently funded. It taxes and extorts citizens and businesses under its control and engages other illegal activities such as bank robberies and kidnapping, but funds from the oil it sells are a large and critical part of how their organization is funded. Continuing to target refineries and smuggling into Turkey would not only cut into ISIS’s funds, but would also cut off ISIS’s access to refined gasoline and slow its war machine to a halt. To stop ISIS, the United States needs to continue targeting refineries, especially the mobile ones if it can, and start putting more pressure on Turkey to curb smuggling.