Despite US-led campaign, Daesh rakes in oil earnings

Daesh militants pass by a convoy in Tel Abyad, northeast Syria.

Daesh rakes in up to $50million a month from selling crude from oilfields under its control in Iraq and Syria, part of a well-run industry that US diplomacy and airstrikes have so far failed to shut down, according to Iraqi intelligence and US officials.
Oil sales - the extremists' largest single source of continual income - are a key reason they have been able to maintain their rule stretching across large parts of Syria and Iraq. With the funds to rebuild infrastructure and provide the largesse that shore up its fighters' loyalty, it has been able to withstand ground fighting against its opponents and more than a year of bombardment in the US-led air campaign.
The group has even been able to bring in equipment and technical experts from abroad to keep the industry running, and the United States has recently stepped up efforts to close off this support.
Washington has been talking to regional governments, including Turkey, about its concerns over the importing of energy infrastructure into Daesh-run territory in Syria, including equipment for extraction, refinement, transport and energy production, according to a senior US official with firsthand knowledge of the Daesh oil sector.
Speaking to The Associated Press in Washington, he said international actors in the region were intentionally or unintentionally aiding this effort and called Daesh's management of its oil fields "increasingly sophisticated," something that has helped the group slow down the degradation of its infrastructure from US bombing raids. He spoke on condition of anonymity because he was not authorized to talk to the press.
Daesh sells the crude to smugglers for discounted prices, sometimes $35 per barrel but as low as $10 a barrel in some cases, compared to just under $50 a barrel on international markets, four Iraqi intelligence officials told the AP in separate interviews. The smugglers in turn sell to middlemen in Turkey, they said.
The Daesh group is believed to be extracting about 30,000 barrels per day from Syria, smuggled to middlemen in neighbouring Turkey. But much of the Iraqi production is not sold and instead sent to Syria to makeshift refineries the group has set up to produce fuel products.
In total, the group is believed to make $40-$50 million a month from sales, the Iraqi officials said. A report by the Daesh's Diwan Al Rakaaez - its version of a Finance Ministry - seen by the AP in Baghdad shows that revenues from oil sales from Syria alone last April totalled $46.7 million. The Daesh "finance ministry" report put at 253 the number of oil wells under IS control in Syria, saying 161 of them were operational. Running the wells were 275 engineers and 1,107 workers, it said.

• MENA