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Inside Isis Inc: The journey of abarrel of oil
Isis controls most of Syrias oil fields and crude is the militant group'sbiggest single source of revenue. Here we follow the progress of a barrel of
oil from extraction to end user to see how the Isis production system
works, who is making money from it, and why it is proving so challenging
to disrupt.
By Erika Solomon, Robin Kwong and Steven Bernard October 14, 2015
TURKEY
MosulSinjarKURDISTAN
REGIONAL
GOVERNMENTAleppo Raqqa
Deir Ezzor
al-QaimS Y R I AEBANON IRAN
I R A QDamascus
Baghdad
100km
Territorial control KeyOil fieldsIsis control Syrian regime Oil market
Mobile refineryIsis support Kurds Primary oil routes
Bought by IsisRebel-held Smuggling route
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1Where the oil is extracted
Isiss main oil producing region is in Syrias eastern Deir Ezzor province, where
production is somewhere between 34,000 to 40,000 barrels a day, according to
locals. The group also controls the Qayyara field near Mosul in northern Iraq that
produces about 8,000 barrels a day of heavier oil that is mostly used locally to
make asphalt.
It is di!icult to determine a definitive oil production figure for Isis-controlled
areas. But it is clear production levels have dropped in the Syrian fields since
they were taken over by the militants. Most oil fields in the area are aging and
despite the group's e!orts to recruit skilled workers, it does not have the
technology or equipment needed to maintain them. Even so, they continue to
SinjarTo Mosul
Raqqa
al-Tabqa
al-Jabseh
To Aleppo
Deiro Fieldal-Kharata Deir Ezzor
I R A Qal-Omar
al-Shoula al-Taim
S Y R I Aal-Tanak
DEIR EZZORSYRIA
IRAQ
al-Qaim
50km
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provide Isis with its most lucrative income stream.
The price of the oil depends on its quality. Some fields charge about $25 a barrel.
Others, like al-Omar field, one of Syrias largest, charge $45 a barrel. Overall, Isis is
estimated to earn about $1.53m a day.
Oilfield Est. production (bpd) Price ($/barrel)
al-Tanak 15,000-17,000 $40
al-Omar 9,000-13,000 $45
al-Jabseh 2,500-3,000 $30
al-Tabqa 1500-1,800 $20
al-Kharata 1,000 $30
al-Shoula 650-800 $30
Deiro 600-1,000 $30
al-Taim 400-600 $40
al-Rashid 200-300 $25
2Selling crude oil
Though many believe that Isis relies on exports for its oil revenue, it profits from
its captive markets closer to home in the rebel-held territories of northern Syria
and in its self-proclaimed caliphate, which straddles the border between Syria
and Iraq.
The group sells most of its crude directly to independent traders at the oil fields.
In a highly organised system, Syrian and Iraqi buyers queue in their tankers at
the entrances to fields, often waiting for weeks.
3
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Oil refineries
Traders have several options after they pick up their cargo:
Take the oil to nearby refineries, unload it and return to queue at the fieldusually
done by traders under contract to refineries.
Sell their oil on to traders with smaller vehicles, who then send it to rebel-held
northern Syria, or east towards Iraq.
Try their luck selling to a refinery or sell it at a local oil market. The biggest are near
al-Qaim on the Syrian-Iraqi border.
Most traders prefer to sell the oil on immediately and return to queue at the
fields. They can expect to make a profit of at least SL3,000 (about $10) per
barrel.
TURKEY
Mosul
RaqqaAleppo
IdlibTabqa
IRAQ
S Y R I Aal-Qaim
TURKEY
Aleppo
Idlib
KhshamSaraqebJisr
ash-ShugurJORDAN
S Y R I AMayadeen al-Tayyaneh
IRAQS Y R I A
al-Bukamal
al-QaimMobile refineries
Recently bought by Isis100km
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The bulk of oil refineries are in Isis-controlled Syria. The few in rebel-held
territories have a reputation for lower quality output than the refineries in the
east.
The refineries produce petrol and mazout, a heavy form of diesel used in
generators a necessity as many areas have little or no electricity. Because the
quality of the petrol can be inconsistent and is more expensive, mazout is in
greater demand.
Refining is done by local residents who constructed their rudimentary refineries
after Isis's prefabricated "mobile" facilities were destroyed by coalition air strikes.
The owners make purchase agreements with the militants for their products.
There are also signs that in recent months Isis may have returned to refining. In
interviews with traders, the FT discovered the group had recently bought five
refineries.
Raqqa
Tabqa
S Y R I Aal-Tayyaneh
Mayadeen
al-Bukamal
SYRIA
IRAQ
I R A Q40km
At Isis refineries, the former owner stays
on as a "front" man. The group supplies
the oil; in return it takes all mazout
production and splits the profits on
petrol production with the original
owner.
Traders say Isis has its own tankers that
supply crude to its refineries from oil
fields regularly. The group also appears
to retain many of its earlier contracts
with una!iliated gas stations and other
refineries.
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4
Fuel to market
Once the oil is refined, it is bought by traders or taken by dealers to markets
across Syria and Iraq. At this point, Isis is almost completely disengaged from the
trade. About half the oil goes to Iraq, while the other half is consumed in Syria,
both in Isis territories and rebel-held areas in the north.
There are fuel markets throughout Isis-controlled areas and rebel-held Syria,
often located close to refineries. Most towns have a small fuel market where
locals buy and sell oil. But traders supplying these smaller markets often buy
their oil in bulk from larger hubs.
TURKEY
Manbijal-Bab
RaqqaAleppo
al-BirayhaTheban
al-QaimS Y R I ASYRIAIRAQ
40km
IR A Q
Isis markets
There are larger Isis-controlled markets
in towns like Manbij or al-Bab in Aleppos
eastern countryside. Traders here must
present a document proving they havepaid zakat, a tithe, to buy oil without tax.
Traders from rebel-held Syria who have
not paid the tithe, must pay a tax of
SL200 per barrel, or about $0.67.
Some privately-owned markets also levy
taxes. Al-Qaim market, one of the largest
in the region, charges buyers and sellers
about SL100 ($0.30) per barrel of crude
purchased.
Mosul
In Isis-controlled Iraqi cities like Mosul,
TURKEYMosulKURDISTAN
REGIONALGOVERNMENT
Sinjar
S Y R I A I R A Qal-QaimBaghdadANBARJORDAN 100km
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5
Fuel smuggling
With Isis only concerned with making its profits at the pump, smuggling fuel
the fuel is sold at mini petrol stations
with two pumps. They are ubiquitous on
Mosul street corners and locals usually
name the oil according to the part of
Syria it came from. This helps buyers
determine the quality of the oil and
compare prices.
Elbeyli/Al-Rai
TURKEY
Besaslan Sarmada Aleppo
HacipasaKafr Halab
Maarat al-NaasanIdlib
Kharbet
al-Jawz
S Y R I A
20km
Rebel markets
Two types of fuel are sold in rebel-held
Syria: pricier fuel refined in Isis areas, and
cheaper locally refined fuel. Residents
typically buy a mix of both, and use the
cheaper variety for generators and keep
better quality variety for their vehicles.
The importance of Isis oil to those living
in rebel-held areas of Syria is one reason
why the US-led coalition has been
reluctant to target the group's trade
routes. The coalition says it is wary of
alienating local populations by bombing
fuel now critical for their daily lives.
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into neighbouring countries can be good business for entrepreneurial Syrians
and Iraqis. Syrian smugglers say it has been declining in recent months, not
because of tighter border controls but because the sharp fall in international oil
prices make it unprofitable. But some determined smugglers continue their
trade.
Most of the smuggling from the Syrian side has gone through opposition areas
in the northwest. Locals buy fuel at the market, pour it into jerry cans and carry it
over the border on foot or, in mountainous areas, by donkey or on horseback.
In Iraq, the bulk of smuggling through the northern Kurdistan region has been
blocked, so locals say the route now goes south through Anbar province towardsJordan.
20km
Al-Rai
TURKEY
S Y R I AOrontes River
Sarmada Aleppo
Besaslan
Hacipasa
IdlibKharbet al-Jawz
25 litre jerry canWeight when full: approx 22.5kg
Equivalent to 15, 1.5kg bags of flour
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Boat
When oil prices were high, smugglers loaded larger jerry cans (50-60
litres) of oil into metal tubs or small row boats and, using ropes attached
to each river bank, pulled their cargo across the river and into Turkey. On the
other bank, tractors picked up the supply and took it to a local informal market,
where it was picked up by large trucks, which sold it on.
Pumps
Some Syrian and Turkish border towns have co-operated by burying
small rubber tubes under the border, such as at Besaslan. In recent
months, Turkey has stepped up border patrols and are constantly digging out
the makeshift pipelines.
On foot
A popular crossing point for smugglers carrying jerry cans of fuel on their
backs has been from Kharbet al-Jawz in rebel-held Syria to Guvecci in
Turkey. This has been largely shut down by Turkish forces, but the remote
terrain makes it impossible to stop.
Horseback
In places like al-Sarmada and al-Rai, smugglers have crossed the border
by mule, donkey or horses that can carry four to eight jerry cans at a
time.
Why is the Isis oil trade so di!icult to disrupt?
Find out
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More coverage
How oil fuels the jihadi
terrorists
The organisation runs a
sprawling oil operation
forcing even its enemies to
do business with it
Syrias mafia-style gas
deals with jihadis
The need for energy drives
Assad regime into a deadly
game where state-run
company sta!are pawns
Syria explainer: Allies and
enemies
Making sense of the
relationships beteween all
the di!erent actors
Sources: Institute for the Study of War; FT research
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