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U.S. Targets Islamic State's Lucrative Oil Smuggling Operations
Submitted by Nick Cuningham via OilPrice.com,
With U.S. President Barack Obama’s announcement of an open-ended plan for airstrikes on the Islamic State (IS), the U.S. and its allies will need to degrade the power and influence of the Sunni jihadist group, and that means reducing its incoming flow of oil money.
And the Obama administration seems aware of that, according to a New York Times article that reports that the President and U.S. diplomats are pressuring Turkey to cut off the stream of oil smuggled across its border.
IS controls territory in central and northern Iraq, and is thought to be producing between 25,000 and 40,000 barrels per day (bpd). Since they cannot sell this oil legitimately, they smuggle it and sell it on the black market. Some energy analysts think IS could be pulling in between $1.2 and $2 million per day.
“The key gateway through that black market is the southern corridor of Turkey,” Luay al-Khatteeb, a fellow at the Brookings Institute’s Doha Center, told the Times. “Turkey is becoming part of this black economy.”
Turkey, no friend of IS, is hesitant to help because 49 Turkish diplomats are currently being held hostage by IS in Iraq. They were taken during the initial IS onslaught in June.
Smuggled oil could be a pivotal issue for the U.S. as it seeks to destroy IS. The militant group sells oil at a reduced price – perhaps around $25 per barrel. At first, it sold the oil to middlemen, who moved the oil to Iran, Syria, Jordan and Turkey. But as IS’ operations grew, they forced out the middlemen, beat back other militant groups, and are now providing security to their own convoys of oil tanker trucks heading out of their territory to market.
The group then uses the revenues to finance its operations, pay salaries -- including support for family members of militant members, even after their death -- and sign up new recruits.
The economic lifeline for IS will certainly be a top priority for the United States. Up until now, the U.S. military has not targeted the tanker trucks that flow outwards from IS-controlled territory. But an Obama administration official told the Times “that remains an option.”
The tankers are “clearly visible from the sky should any drone pass overhead, so the smuggling is not particularly furtive,” Howard Shatz, a senior economist with the RAND Corporation, writes in Politico. The roads that tankers use could also be destroyed in order to disrupt the money trail.
Another target could be “mobile refineries,” Shatz says, which IS uses to refine crude oil into useful petroleum products. Along with smuggling crude oil, IS sells refined products to local markets. But even though these mobile refineries provide IS with income, they do not have enough capacity to process all the oil coming from IS territories. There are some larger refineries in Iraq, Syria, and Turkey that refine IS oil.
IS is aggressively trying to expand, but oil remains at the heart of its fundraising strategy. The militant group has tried several times since June to take over the massive Baiji refinery, which is 130 miles north of Baghdad. The refinery can process about 310,000 barrels of oil per day, and is a critical piece of infrastructure that the Iraqi government is desperate to hold onto.
In recent days, IS has renewed its attacks on the refinery, firing mortar rounds and hitting a storage tank, according to Bloomberg News. Luay al-Khatteeb of Brookings said if they do capture the refinery, IS will struggle to operate the huge facility without the expertise of technical staff. Nevertheless, it remains a prize for the organization.
The millions of dollars IS is making from smuggling oil may sound like a lot, but the group also has a lot of costs. Paying salaries and buying weapons is one of them, but Shatz of RAND Corporation says that as a group acting as a state, it needs to provide services to the people in its territories. Just to provide the basics of electricity, water, and other administrative services, the Iraqi government spent far more in the past in IS controlled territory than the $2 million-per-day or so the militant group is earning. Ruling with an iron fist will work for now, but if IS is to last, it will need more cash.
Air strikes may succeed in destroying vehicles and other military equipment under IS control, but cutting off the flow of money – specifically from oil smuggling – will likely go further in weakening the Islamic State.
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Uhhh, paging John Kerry and his crack smok...er, crack team of negotiators...
So what's 40 diplomats about to poop their pants worth? Damn the torpedoes they will say.
Scroll down through this and realize what a load we are being fed:
https://medium.com/@NafeezAhmed/how-the-west-created-the-islamic-state-dbfa6f83bc1f
< No blood for oil!
< No blood to stop oil!
Currency crisis coming to NATO countries - we are going in to seize assets (oil in the gound).
We've already taken a lot of the gold bullion from Libya, Iraq, etc.
This is the old game of just taking their stuff gussied up as we're saving them from (our) terrorists after we've first smashed their countries to protect them from their leaders - We're back - remember us?
http://sprottglobal.com/thoughts/articles/can-petrodollar-survive-low-interest-rates/
"cutting off the flow of money – specifically from oil smuggling – will likely go further in weakening the Islamic State."
Uh, how about cutting off the flow of money coming out of the offices from Langley & the Pure Evil Psycopaths Lucerferians at the Criminal CIA / UNITED STATES, INC. / Mossad / Turkey / Saudi Ariabia / UAE / Qutar etc... And, where ever else the Criminal State is funding Terror.
Screw that.
Where can I get my hands on that $25/bbl oil? I'll refine it myself in my garage at those prices.
Right you are Paveway. That's why shutting it down won't happen. Even the most morally high minded pol would deal with Satan himself for $25/bbl oil....secretly and under the table, of course....
Goes back 1000s of years, but America got its start around 1800, when the Marines hit The Shores of Tripoli. As Muslims do, they were raiding American ships, after 1776, as we tried to trade in the Middle East.
As Muslims do, they took hostages (people & things). They wanted ransoms. Game hasn't changed much since then, North Africa through Southeast Asia. If we do business in the area, oil or not, the game will go on.
Just like last Sundays Jets game.
Who made that time out call!
The Fed will be very upset that that piece of shit president is calling out ISIS because I'm convinced ISIS works for the Fed/bankers
The "Just World" Hypothesis at work. Because the idea of uncontrollable Vandals and Visgoths is just too scary to contemplate.
Must be a drag for the Secret Service contingent with Kerry -- not much fun partying in the Middle East. They miss those visits to Colombia.
Paging Mr. Marc Rich, paging Mr. Marc Rich...
Marc Rich would have known what to do.
Late, lamented, fabulous Marc Rich who busted up The Seven Sisters and single-handedly established "spot oil".
Rand Corp analysis? LOL! They probably do their accounting and buy them supplies with a few MBA consultants to help out.
ISIS is the Air America of today. What a joke. call up Disney to release a new Tarantino beheading. I hear the next one will be done by slasher director Robert Rodriguez.
Len - Steal My Sunshine
http://www.youtube.com/watch?v=E1fzJ_AYajA (3:46)
Tried to watch this; but couldn't. Don't understand why it's relevant? but I love your hair, sweety.
What a farce; why don't they just take back the oilfields these muskrats are occupying and proudce an 85% body count in the process; does anyone seriously think this is difficult ? It isn't.
Shock and Awwwww... Fuck It!
Exactly. Belgium's army is bigger than that of ISIS. They appeared out of nowhere and have achieved inconceivable success. Something really stinks with these guys, and it's not just their holy underwear.
Yes; I'm well aware of the answer to my hypothetical question, above. The reason the 555th. of the 82nd Airborne doesn't go in there with air ground support and wipe them out is that they're our designated proxy to defeat King Assad. Where are the men from the grassy knolll when you need them?
ROFL
sorry son, you have it twisted a bit, your divisions were there several years, THAT is why we have them here now tens of thousands strong. One more thing about your divisions, if they go in there one more time, they may not return
A glass parking lot is not out of the question, should that come to pass.
Can't have actual ISIS (merc) bodies floating around, publicly seen. Then the jig would be up, revealed for the farce that it is.
Now SAT, they need congress to declare war before they can drone those tankers, troops, planes. They would f they could but their hands are tied. Someone seems to want to protect ISIL (Darth Cheney et al). Beurocracy and all. Not any type of active conspiracy. Just like they're not trying to bring Ebola back to the us by sending 3000 horny youn bucks into the epicenter.
Not a religious man but familiar with the word. Pestilence takes a fourth, war takes a fourth. Shit's lining up pretty well. Could Oblabla be the beast who rises from the sea (indonesia) and is loved by many people?
It's our oil anyway. Until we came along all they knew to do with it was to massage their camels' butts. What a joke.
Not to the lonely camels...
Haven't you figured out it isn't even about the Oil ?
That old 'IT'S ABOUT THE OIL !' shit is trotted out very time.
-Guess what: it isn't. That is just an excuse that shut's up people who don't wan't to think about what happens without their fucking cars.
The MIC and the debt to fund the MIC is cosnting way more than the Oil ever would.
Fuck: why don't we pull out of the M.E., save the money we waste on the MIC -and just buy cheap Oil from ISIS ourselves?
How ISIS is different from/worse than the fucking Saudis???
Does the Saudi monarchy really have any more legitimate claim to the Oil riches of Arabia than ISIS does??
It would certainly be more honest to just go in and take it all.
The US will do anything to promote moar war. What bullshit this whole IS/ISIS/ISIL is.
How many times are they going to change the name anway?
Hey, they are a force to be reckoned with.... They have an army of what, 31,000. They could take over the world tomorrow if we aren't implanting all means necessary to kill them, including spying on all US citizens.. Thank God Obama and Kerry and Hillary and McCain have our backs!!
Just a couple days ago we were treated to "ISIS threatens the Suez Canal" bullshit. It's really non-stop now.
You would think they were Patton's Seventh fucking Army by the way they talk about this bunch.
What a load of crap...
Hell, we could it with 5000 over here, just get on board.
Seriously, how many supposed IS or Al Qaeda "fighters" would it take to blow some major power grid sites in the US? Seems to me after the 9/11 "terrorist" attacks we haven't had a single real incident. All the "plots" discovered so far were set up by the FBI itself.
That's just it, they are going set themselves up for a failure, it's set in stone and written.
The FIB does "sting" opts. because they're incompetant to do anything else; but the fucking CIA engineers false flags.
"How many times are they going to change the name anway?"
Uh, as far as I know they haven't used VAGASIL yet
They'll change the names as many times as it takes to disassociate them with the CIA/FSA.
Kind of like how every time facts appeared in the news about the CIA-backed Nazis being involved in the Ukrainian coup, a story would suddenly appear in an effort to tie them to the separatists instead.
Disinfo. It's what's for dinner.
And the Sheeple went Baaaaaaahhhhhhh!
The Grateful Dead - Casey Jones(Lyrics)
http://www.youtube.com/watch?v=rLs_0h9_wXM (4:36)
"Clowns to the right of me, fools to the left; and I'm stuck here in the middle with you"---sorry, Goldilocks, but nothing will ever replace those lyrics for me. But the Grateful Dead does make sense to an old fart who lived throught it all, unlike the last one you posted; which just seemed like meaningless noise. Sorry, again; opinions. I know, they suck.
and where is europe going to get its oil?
Fuck Nuland and buy it from Russia ? Just a thought. If she can say Fuck the EU, can't they say the same ? Seems fair, somehow.
Who gives a shit?
but cutting off the flow of money – specifically from Goldman Sachs oil smuggling – will likely go further in weakening the Islamic State.
What a load of horeshit....the war promotion is really on stage
The truly sad part in all of this is that the American public, by and large, will condone this tactic of more random death and destruction.
"Well, we have to do SOMETHING!!!111!!!"
What difference does it make ??
Yeah they are between a rock and a hard place alright.
Can't collect kidnapping ransoms and no oil revenues.
They will extort and they will get paid.
Yeah, we have to do something. All that cheap oil on the market is bringing the price below what the Saudi's have told the US to keep it above.
Maybe they will donate some to Citgo like Chavez did to "help the poor." Free gas to all Caliphate members. Jhihadists ride with us.
"help the poor" ? Well, it's a nice thought, MsCreant but I wouldn't hold your breath. You see, they're Jihadists in name only; this is a front for their purpose which is to fight Assad in Syria.
Infographic has it wrong.
Sells for $40 on the free market.
Sells for $90 on heavily leveraged / regulated market.
What are you, a perfectionist ? You expected accuracy on a Web Blog. Jeez. Be glad they're as close as they are.
It has always been "Blood Oil." All of it is "Blood Oil."
Tell us some news. We are innoculated and innured to this news.
SSDD
Not always, MsCreant, when Texaco, (Texas-Arabian-Co.), was first formed, they agreed to pay the Saudi's one dollar for each barrel they took away with them. The Camel humpers thought they'd died and gone to Allah. And there was no blood involved. Lately, peoples been gettin uppity and wantin real payment for there shit and shit; and you know how that goes.
We should tie the saudis to their camels and whip the crap out of the camels. What a sight, saudis flying across the desert dargging behind their noble beasts. Am I dreaming?
nuclear war tampons would be one way to cut off the 'flow'.
cause it's that time of the millenium.
i know the above makes no sense. but i'm sticking by my millenarianism.
Isn't this how the US finances its Freedom (terror) operations as well
Nicole Scherzinger - Herbal Essences Moroccan My Shine TV Commercial
http://www.youtube.com/watch?v=PJ7aOusGTLs (0:30)
EU (Allied) buy´s cheep smuggeld oli from ISIS through Turkey (NATO allied).... "ther¨s a hole in the bucket dear Liza " belafonte way back. and riots again in Kiev... maby Obomba should stick to Enola fighting,,,, kill them all...
I didn't see this listed as a risk in the ISIS annual report. The SEC should look into this.
Entrepreneurship is all about creating opportunity. Maybe the Wharton School of Business should consider this example for a underclassmen course.
Are they the ones bringing down the price of crude oil on the market the last few months? Sounds like we need some more $40/barrel oil for a while longer so we can get the commodity speculators out of the market. Somehow I think this means ISIS is going to have problems on their hands. They probably need to sell it at $90/barrel and maybe they'll be allowed to exist...you know, to promote honest price discovery and what not!
Here is how it works;
Turkey lets ISIS use their back door (ha ha!) to move oil out of Iraq for sale to the EU. After a set amount of profit is had ISIS eventually frees the Turkish diplomats. Turkey claims ISIS did it on their own, no quid pro quo, no ransom paid. All very nicely swept under the rug. And some guys in Turkey got their palms greased for cooperating.
Oh and a minor detail ... turns out later there never were any diplomats.
They are all in on it and have been in on it for 800 years.
What is really amusing is listening to the progressive liberals who were shouting "No Blood for Oil" and condemning the NeoCons, flip-flop and become interventionist liberal clowns, advocating the same policies of war for oil and support of our involvement in creating turmoil and civil war in the Ukraine, all because their guy is the Prez now. Hypocrits.
Hypocrite is too optimistic; mindless idiots would be closer to the tragic reality, I'm afraid.
Who has warred, bribed, bombed, blackmailed, bullied and backed crimials the most for oil in the history of the world?
Xrayd; hmmm. let's see; that's a hard one, could I have some extra time on that one?
Since when has the US policy of "we need to do just this and we win" worked? I can't recall the last time....
Since before the CIA took over foreign policy.
We have won 2 wars in 238 years. That's not a very good track record.
The wars on freedom and intelligence?
quite simply the best video in a long long time
comedy gold
classic
Ukraine's finance minister gets thrown into a skip!
http://www.youtube.com/watch?v=XMf2_RQWdUQ
von rumpoy and baroso watch out : )
Van Rump Boy, Baroso, Porky, Yats, Yulla and the other Ukie oligarchs need to be thrown in a wood chipper. Or waterboard them until they tell us who shot down MH17 and where did the Ukie gold go.
Waterboard them, have a short trial and find some rope and a lamp post.
Read the headline and the first paragraph, then Fast-Forwarded to here, because it's all CIRCUS and NOISE, unless and until ONE fucking Question is answered:
Why won't ISIS attack its dangerous neighbors, i.e. KSA, Qatar or UAE? Why? Until they do that, it's all BS and a huge waste of my/our time to dwell on this prime-time, global soap opera: As The World Turns, All My Children, General Inhospitable...
It's difficult to drive Toyota pickups across water.
Its also interesting how they want to create a new caliphate excluding israel lands
These people are dangerous, incompetent, stupid, naive and themselves manipulated. Here's a paragraph on today's Obama presentation before the Senate:
"Defense officials told lawmakers on the Senate Armed Services Committee that they were confident the rebel force would put its three-year war with Bashar Assad's forces on the backburner as the Syrian opposition focuses on battling the Islamic State (IS), also known as ISIL or ISIS. They insisted that would prevent the US from getting sucked into Syria's civil war while creating an acceptable partner to combat the Islamic State inside its home base."
Now given that the various groups signed a non-aggression pact just days ago, who or what is this Free Syrian Army? Truly.
Adding this -- so the Pentagon is simply going to order the "rebel groups" to "put aside" the war on Assad and go fight IS? So the FSA, by the Pentagon's own implicit admission, is simply a mercenary force for the West. I bet they don't even get how they just admitted that.
Oh, well, if that's what they said they were going to do, then I'm sure everything is all right. Check out the U-tube interviews with the head of this Free Syia Army guy; he doesn't even bother acting; it's all, "like, Al Qaeda, we got nothing against Al Qaeda"; yeah, no shit.
Years ago some Iranian diplomats were captured and later executed by the Taliban.
This might have been during the battles for Mazar al Sharif.
Anyhow,the Iranians were pissed off.Seems like they felt their diplomats should be
entitled to diplomatic immunity,unlike the US diplomats held hostage in Tehran....
The economic lifeline for IS will certainly be a top priority for the United States. Up until now, the U.S. military has not targeted the tanker trucks that flow outwards from IS-controlled territory. But an Obama administration official told the Times “that remains an option.”
Clearly it is not a top priority or the Navy/Marines/AF would be knocking the hell out of them now. They must be an easy target.
Something smells fishy to me.
you are wrong! it does not smell fishy. it smells like bullshit! they rae trying to patch holes in the isis story and they just create more holes.
isis is funded and supplied with western funds and weapons.
Okay, okay, fishy bullshit. Is that alright now ?
The tankers are “clearly visible from the sky should any drone pass overhead, so the smuggling is not particularly furtive,” Howard Shatz, a senior economist with the RAND Corporation, writes in Politico. The roads that tankers use could also be destroyed in order to disrupt the money trail.
...
You could have said the same about all them humvees and other US equipment ISIS used, equipment I might add was clearly marked so it could identified from the air it was ISIS when they rolled into Iraq initially.
I am surprised that Obama has
not placed "sanctions" against ISIS
http://www.bloomberg.com/news/2014-06-05/honeywell-ships-mobile-refineri...
...
Assembling the equipment off-site may help energy companies solve the critical challenge of keeping large construction crews out of harm’s way while erecting infrastructure to tap oil fields in dangerous locales. Nigeria, the OPEC member that’s fighting the Boko Haram militant Islamist group, is among the markets where Honeywell sees sales potential, Gautam said.
...
The company bought a 70 percent stake in Thomas Russell Co., a builder of modular natural gas processing plants, for $525 million in 2012.
Iraq ContractPlans to take Thomas Russell global are under way with the sale of a modular gas processing facility that will be delivered to Iraq, the first outside of North America for the business, said Rebecca Liebert, chief of UOP’s gas processing and hydrogen business.
As it expands the modular concept to refineries, UOP this week signed a contract to deliver a prefab unit for crude oil to Iraq.
...
“When you look at mini-refineries and modular units of various kinds, this is a pretty good growth factor for us,” he said.
...
Yes it is especially once you start with breaking windows over in the IS and region in general and try to keep it ongoing and unstable. I would say investing in companies who make these mobile gas and oil refineries would be good candidates to bet on in the casino.
Not to be outdone.
http://www.alibaba.com/showroom/mobile-oil-refinery.html
better not look too closely
for who is buying oil from Isis--
you might get too good a look
at the man behind the curtain.
Air strikes may succeed in destroying vehicles and other military equipment under IS control, but cutting off the flow of money – specifically from oil smuggling – will likely go further in weakening the Islamic State.
Don't steal, the government aka the Federal Reserve hates competition aka oil sold not priced in petrodollars.
Guess it's not being paid in dollars huh.
I thought oil can not come out of the ground at 40 USD per barrel? 40 USD is below replacement cost?
So, either the 40 per barrel figure is bullshit,
or
ISIS is selling the oil at that 40 USD price, but, they will be cannibalizing their oil pumping and delivery infrastructure in the process. This means that over time repairs and maintenance are not being done on the equipment. So, eventually oil will stop flowing at 40 and the money will stop flowing to them.
I know there are experts here that can elingthen us on the "cost out of the ground" number.
I don't know what to believe anymore really.
the $40 per barrel extraction figure is
pure bullshit for Saudi or Iraqi oil, even
way high for fracked oil....Saudi/Iraqi oil
is more like $2-$5 per barrel--
probably a bit more because
of wartime conditions.
The cost of extraction from existing fields is low (often well under $10). Those fields are in decline and to maintain output they have to spend money on drilling extra wells in existing fields and on new extraction techniques.That raises the cost of the replacement production much higher (perhaps $20-50/barrel). Also new fields need to be found and they are usually not as big or productive as the existing fields so they might not be economically viable without assurances that oil will remain at high levels.
ISIS of course isn't concerned about long term production and will skimp (or ignore) maintenance and won't worry about damaging the fields (like leaving stranded oil or causing envioronmental degredation). That means that their costs are very low and they will pocket most of that $40/barrel.
Air strikes may succeed in destroying vehicles and other military equipment under IS control, but cutting off the flow of money – specifically from oil smuggling – will likely go further in weakening the Islamic State.
Even Jimmy "Candy Pants" Carter would have bombed the refineries - more likely just the transport infrastructure - back in February '14 w/o asking permission. Congress and the country would have gotten a hard on about it. How do you spell Tibilisi? How many US airmen died bombing SE Europe in WWII to cut off Hitler's oil flows. Really hard to put refineries underground. Guess what. It worked. Really well.
One is almost forced to conclude by virtue of the fact that there is any oil or electricity production in the Caliphate, that Obama is in league with it.
Everybody remember that "nice bomb" we used in Bosnian/Serbian mess early in the Clinton years. It rained metal strips down on an electric plant to short the transformers and generators. Didn't totally trash the place. Probably able to get it back on line in a few days. But the message was that we could turn off the power anytime we wanted - so start being good. They did. Even ISIS likes the lights on. Saddam was bad and lit up the Kuwaiti oil fields. Most ungracious. All one needs to do is light up the pipelines. I assume that that can be done with a drone. If not, surely with a cruise missile. Don't need the B-52s although I understand that carpet bombing has a very adverse effect on the opponents morale. B-52s risky these days with all of the sophiticated anti-aircraft stuff.
Hey Obola
The cat's out of the bag already.
Your cohorts have a BIG mouth
http://www.breitbart.com/Breitbart-London/2014/09/05/EU-Buys-ISIS-Oil-Ambassador
Shut the Fcuk up. Your game is up.
Finally we know the real reason why WTI crude is down from $105 few months ago.
We don't need boots on the ground, we need wingtips on the ground. Send in the suits!
So what about the dollar pipeline from Saudi Arabia, when will the US bomb that even as the New York Times pretends that said pipeline does not exist? Are these clowns capable of even shame?