BAGHDAD: The Islamic State of Iraq and the Levant (ISIL) was estimated to be making $2 million per day from oil smuggling. There’s nothing new about smuggling oil in the Middle East. The Iraqi government sold an estimated $8billion in oil despite an international embargo, between 1997–2003, according to the UN-commissioned.
Over the past year, ISIL has made a reputation for smuggling oil to fund its activities, but it’s far from the only group involved.
‘There are different ways that the oil industry functions in Syria and Iraq,’ says Michael Stephens, deputy director for the Royal United Services Institute’s Qatar office. Much depends on the geographical location. ‘In Syria, there are simple systems where you boil up the oil in a kiln and then ship it down to a local petrol station to use,’ he says.
There are also more complex operations where you have refineries with tankers that go up to the border with Turkey and Iran, according to Stephens. The oil is sold to middlemen with bribes paid at checkpoints. ‘Oil is smuggled in hidden compartments, or there’s assistance from corrupt government officials,’ he says.
The smuggling routes tend to be done by pre-existing networks of smugglers who have ways of concealing oil in compartments in vehicles, adds Stephens. There is a demand for the energy coming out of Iraq and Syria, particularly in Iran and Turkey, and some oil is even sold from rebel areas back to areas controlled by Bashir al-Assad.
There is also oil coming out of Syrian Kurdistan, but it’s less well refined. In Iraqi Kurdistan most oil refineries are very well accounted for and come under the structure of multinational companies.
