Daesh faces oil revenue losses

Daesh oil
US-led coalition forces' airstrikes and Iraq's and Turkey's border security keep Daesh from selling oil, a recent report said

Coalition forces’ airstrikes combined with strong border security in Iraq and Turkey has prevented Daeshfrom selling oil, a recent report prepared under the supervision of Turkey and the United States reveals. 

Bombings have hit the limited oil refining capacity of the militant group, Daesh, which is the Arabic acronym for Islamic State of Iraq and the Levant, according to the Financial Action Task Force’s report entitled “Financing of the Terrorist Organization Islamic State in Iraq and the Levant.”  

The air strikes have also pushed the group to use more primitive methods in refining oil, the report said.

The limited refining methods, such as burning the crude in open pits, a technique which produces low yields of poor-quality product, have also hurt the group’s oil revenues.  

But Daesh’s oil revenues have also suffered from the fall in oil prices, and the oversupply on the oil market.  

“Daesh benefits mostly from using the petroleum and petroleum products it controls or by earning revenues from sales of these resources to local customers,” the report states. 

Daesh’s oil revenue also comes from sales through middlemen and smugglers who transport the oil and oil products to Daesh-controlled territories and nearby areas, including the Syrian regime. 

Powerful local families that have long and historical relationships with the Syrian regime constitute a wide network for Daesh’s oil to be traded, as these families “are known to have dealings in arms and drug smuggling.” the report reveals.

These smugglers and middlemen buy oil from Daesh at below the market price, paying only $20 to $35 per barrel, and then trade it at $60 to $100 per barrel in local markets, the report said. 

“A representative truck carrying approximately 150 barrels of crude oil earns roughly $3,000 to $5,000, depending on the degree of refinement of the crude oil,” the report said.