Oil Refineries Cut Off but Islamic State Maintains Diversified Finances

Back in June of last year Islamic State managed to capture Iraq’s biggest oil refinery in the town of Baiji. The Baiji refinery produces around one third of Iraq’s refined fuel, and was a serious blow to the legitimate Iraqi government. Islamic State also captured nearly 60% of Syrian refineries, netting the group some two million dollars a day. However, American airstrikes were able to destroy many refineries held by Islamic State, and the Iraqi military retook Baiji back in November.

The string of victories against Islamic State’s oil refining operation have continued at the hands of the Iraqi Army and the Kurdish militias; since then Islamic State has lost all but one Iraqi oil field, Qayara. Qayara, a smaller field, produces some 2000 barrels of oil per day. As Islamic State’s oil producing capabilities dwindle Islamic State will have to rely on its diversified revenue streams, which include artifact smuggling, hostage taking, and taxation of illicit trade.

While the Islamic State is infamous for its destroying of priceless Babylonian artifacts from the Mosul Museum, Islamic State shrewdly preserves some artifacts for sale to the highest bidder. Islamic State has been encouraging archeological digs in regions it controls, instating a 20% plunder tax on loot and artifact traffickers. $36 million was gained through the looting of the al-Nabuk site west of Damascus alone. The antiquity trafficking operation maintained by Islamic State is estimated to be worth around $1 billion. Looted antiquities are smuggled out of Syria and Iraq through Turkey, facilitated by Islamic State’s control of the roads leading from Iraq, through Syria, and into Turkey. Archeologist Amr Al-Azm reports that Turkish nationals play a major role in the trade:

“Some international dealers … started to come in to Syria but it quickly got too dangerous for them. Now the dealers all hang out across the border in Turkey. Only Turkish dealers come into Syria to meet with locals. They buy and take it back. One of the main centers for the illicit trade is Tell Abiab, on the Syrian side, across the border from Urfa. There is also lots of smuggling in [the Turkish border town of] Kilis. … From there, I don’t know where it goes.”

Additionally, with Islamic State maintaining control over the roads and taxation on the transaction of goods, they stand to make a hefty sum of funds on illicit trade.

Similarly, while the Islamic State’s brutal treatment of Christians, including the defacing of Christian churches and massacres of Christian residents, its targeting of Christian is also a financial stream, as ransom proves to be a major source of funds for the Islamist group.  Currently, Islamic State militants in Syria are demanding a $30 million ransom in exchange for the release of 250-300 Christian Assyrian hostages; nearly $100,000 per individual.

The ongoing humanitarian crisis represented by the treatment of Christian refugees at the hands of the Islamic State and other Jihadists means that these communities remain vunerable and susceptible to hostage and ransom attacks.

In conclusion, while targeting Islamic State oil assets is a positive step, it is by no means a silver bullet. The jihadist group remains diversified in its fundraising efforts, and even with setbacks we can expect it to remain unbowed and committed to its violent jihad.