ISIS has lost its caliphate. The infamous terrorist organization that just a few years ago had even the most powerful world leaders terrified as it snapped up more and more land in the Middle East has now been pushed out of nearly all of it. Today, the Islamic State is left with just a strip of land to call home, back where they started in Syria. Just because ISIS has run out of land, however, doesn’t mean that they have run out of power.
What the Islamic State lacks in land holdings is more than makes up for in cold hard cash. “Even as U.S.-backed forces wrest back the Islamic State’s last strip of territory in Syria,” reports the Atlantic, “the United States and its allies are nowhere close to bringing down the terrorist organization’s economic empire.” We’re not talking about pocket change here. The shadowy organization continues to move millions of dollars a week.
“The group remains a financial powerhouse,” boldly proclaims the Atlantic. “It still has access to hundreds of millions of dollars, according to experts’ estimates, and can rely on a battle-tested playbook to keep money flowing into its coffers.” It would take a lot less than that for the organization to stay relevant, even in the moneyed Middle East. In short, ISIS is not dead yet. Not even close.
But just where, you may ask, did all this wealth come from? In a word: oil. By exploiting, coercing, and flat-out stealing oil from fields where the terrorist cell-controlled territory in Iraq and Syria--in combination with a system of imposing taxes on citizens under the Islamic State’s reign of terror--the Islamic State has been able to fund itself many times over. An anonymous source purported to be a senior Iraqi security official told reporters at the Atlantic that through these money-making strategies the Islamic State was able to pull in about a million U.S. dollars per day, “transforming the group into the world’s richest terrorist organization.”
While the loss of land holdings has restricted ISIS’s access to oil, it has been a financial boon to the organization at the same time. “The loss of turf also eliminated the Islamic State’s biggest expenses: salaries, maintenance and other financial burdens that come with governing territory, according to intelligence officials and experts,” the Washington Post reported late last year. Related: The U.S. Smashes Another Oil Export Record
This is not new news. We already knew that the Islamic State was siphoning resources out of its oil-filled territories and getting rich off of doing so. The United States has led an aggressive campaign to stifle the organization’s cash flow since 2014, but has only seen very moderate success, as evidenced by ISIS’ current status as a “financial powerhouse”. The organization still has a vast network of money-laundering operations and black-market dealings. In fact, muddying the waters even more, at the end of 2016 WikiLeaks published a massive cache of almost 58,000 emails leaked from the private email account of Turkey’s incumbent energy minister Berat Albayrak which revealed that Albayrak had vast knowledge of and complicity in Powertrans, a company that had been importing oil from ISIS-controlled oil fields.
This was a particularly salient realization due to the fact that it revealed not only that there was governmental complicity in selling the Islamic State’s stolen oil in Turkey, funneling it from the black market into the Turkish economy, but that the complicity went almost all the way to the top--Albayrak is not just a government official, he is also the son-in-law of Turkish President and U.S. ally Recep Tayyip Erdogan. But even back in 2016, this was not new news. It just gave credence to existing allegations. As OilPrice reported at the time, “Allegations that Erdogan and members of his family are linked to ISIS oil trade are not new. Last year, almost to the date, opposition lawmaker Eren Erdem said he would soon provide proof of Erdogan’s role in the smuggling of Islamic State oil. Just two weeks later Erdem found himself facing charges of treason.”
This complex problem of black-market oil lining the Islamic State’s pockets had been mostly resolved over the past few years, as ISIS has been pushed back and the group’s access to Iraqi and Syrian oil fields has therefore become severely restricted. But when United States President Donald Trump announced earlier this month that he would be pulling all U.S. troops out of Syria, all of this progress has been thrown into an extremely precarious position. Without the support of U.S. troops, their Kurdish allies will be left to the mercy of Turkey, leaving Kurdish fighters unable to continue their suppression of the Islamic State in Northern Syria. Related: Is Eating Meat Worse Than Burning Oil?
This will have many implications, many of which are potentially very good news for the Islamic State. Thousands of ISIS fighters could be able to escape from incarceration without Kurdish guards to keep them there, and it may just be a matter of time before we see a major resurgence and another land-grab by ISIS now that there is not sufficient military presence to stop them. This also means that oilfields in the area will be unguarded, potentially giving ISIS access to the black gold and the black market once more.
In fact, just this week, Trump backpedaled on his decision to pull all troops out of the region, not because of his much-derided abandonment of the Kurds, but because of oil. “The Pentagon is considering keeping some U.S. troops near oilfields in northeastern Syria alongside Kurdish-led Syrian Democratic Forces (SDF) to help deny oil to Islamic State militants,” Reuters reported on Monday. Defense Secretary Mark Esper told the news agency’s reporters, “We presently have troops in a couple of cities that [are] located right near that area [in Northern Syria]. The purpose is to deny access, specifically revenue to ISIS and any other groups that may want to seek that revenue to enable their own malign activities.”
Even without access to oilfields, the Islamic State is sitting on hundreds of millions of dollars. If they are able to regain access to oil fields in Northern Syria, giving them access to even more riches, it will have dire consequences. The conditions are uncomfortably close to perfect for a massive resurgence of the Islamic State’s power and influence over the Middle East.
By Haley Zaremba for Oilprice.com
More Top Reads From Oilprice.com:
- Dreams Of An Aramco IPO Are Fading Fast
- Russia Predicts The Death Of U.S. Shale
- Oil Rebounds On Rare Market Optimism