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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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ISIS Forced To Cut Wages As Oil Revenues Tank

Leaked documents purport to show that the Islamic State (ISIS) is cutting the salaries of its foreign fighters as low oil prices and continued air strikes on terrorist-controlled oil targets hit back with a monetary jihad.

The documents—which are said to have been leaked by the ISIS ‘treasury department’, or the Bayt Mal al-Muslimeen—state that foreign-fighter salaries in Syria have been reduced 50 percent due to “exceptional circumstances,” including continued air strikes of Syria-based ISIS oil operations and low oil prices. Related: T. Boone Pickens On Obama Oil Tax: ‘’Dumbest Idea Ever’’

Citing the Koran, the documents mention the “jihad of wealth” and the “jihad of the soul” in relation to the dwindling ISIS coffers that have prompted the group to cut salaries for foreign fighters, with no exceptions for rank or position. But local fighters are immune.

According to media outlets in the Balkans—from whence hundreds of fighters have arrived in the Middle East—the salary cut isn’t going well, and foreign fighters are beginning to desert.

While foreign fighters appear to be the only ones suffering lower wages, they were also reportedly getting paid double what local fighters were receiving. According to reports, the new ISIS foreign-fighter salary—after cutbacks—is $400 per month on average. Bonuses are in the form of stipends and based on their dependent children. Related: IEA: No Oil Price Rally In The Short Term

Bosnia and Herzegovina—the European country with the highest number of ISIS fighters proportionate to its population—has reported an increase in the return of its nationals from the Middle East and has responded by detaining them. But so far they have been unable to confirm that the returns were directly related to the reported ISIS salary slashes.

Profits from the illegal sale of petroleum is the most important revenue source for ISIS, and military upkeep is thought to cost the group tens of millions of dollars a month and account for roughly two-thirds of the operating budget.

So while ISIS takes advantage of the chaos created by cheap oil—which weakened many countries’ ability to fight ISIS—it also takes an economic hit of its own with oil hovering around $29 per barrel. Related: Who Would Be The Best Presidential Candidate For Energy Companies?

According to a report by the Financial Action Task Force published in February 2015 on the financing of ISIS, the terror group was allegedly selling oil to middlemen on the black market for $20-$40 per barrel. These middlemen were then reselling between $60 and $100 per barrel to outside buyers. In this way, ISIS was said to be earning an average of $1.5 million a day—profits that are now increasingly out of reach given today’s oil prices.

Beyond this, the wage cut is also being attributed to bombing runs on ISIS oil fields, refineries, and trucks transporting oil to black market buyers.

U.S. officials claim that ISIS has now lost 40 percent of the territory it controlled in Iraq and 20 percent of the territory it once controlled in Syria—most of those losses around oil facilities. In the meantime, ISIS has its sights set on Libyan oil and finding a clear path through the civil war chaos there. So far it’s launched a series of attacks on Libyan oil facilities and taken over the city of Sirte along with hundreds of miles of coastline. Once it cements its hold here and succeeds in recruiting its own oil and gas engineers, it might be able to afford to raise the salary for its foreign fighters.

By Julianne Geiger for Oilprice.com

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  • Toby on February 12 2016 said:
    yeah, price will rebound once ISIS is destroyed.

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