In the current campaign for US President, the American response to ISIS (or ISIL, if you prefer) has been prominently mentioned. The Republican nominee, Donald J. Trump, says that the US should seize Iraq’s oil and deprive ISIS of this funding source.
Set aside Trump’s politics or the wisdom of the idea. Suppose ISIS is using oil gleaned for Iraqi oil fields to fund its abhorrent activities. How does ISIS convert oil to cash? ISIS is mostly universally reviled. How do they find people willing to do business with them? Do people purchasing oil not know where the money goes? (I, an individual American consumer of oil and oil products, have no idea what happens to the money I pay at the pump. I just know that it is deducted from my bank account in an amount equal to the purchase.) Do people purchasing oil not care what happens to the money once they have the oil? How does the crude oil physically get from Iraq to the buyer? Is there Iraqi oil in my car (that is usually fueled here in oil-rich Texas?) Is the oil purchased from an unsavory outfit like ISIS “laundered” through a more well-liked outfit before finding its way to Western gas tanks?
It continues to astonish me that Trump doesn’t get called on this. As you note, he has repeatedly said that he would seize Iraq’s oil if he is elected. And he condemns Obama and Clinton for not doing this.
But Trump also says he has no plans to station American troops in Iraq or anywhere else in the Middle East. And he condemns Obama and Clinton for doing this.
Has anyone ever asked him to reconcile these two policies? How is Trump planning on seizing Iraq’s oil without putting American troops in Iraq? Does he feel he can somehow make Iraq give us all their oil without any force to back it up? Is he planning on loading up all of Iraq’s oil and bringing it back to America?
There’s plenty of people in that region who will fence the oil … Turkey … Saudi Arabia … “ISIS is mostly universally reviled.” I’m not so sure of that, Shia Muslims have been fairly brutal with the Sunni Muslims, I imagine there’s a few Sunnis who hate their own Shia National Government more than they hate their fellow Sunnis in ISIS …
Thanks. That was interesting. So, oil is extracted and taken by truck or even by rowboat into Turkey. It then enters the legitimate oil trade via Turkish companies.
Where does ISIS find people who know how to do this? Is it at gunpoint? Do folks who know how to operate oil wells and related facilities simply find allegiance with ISIS’s goals and methods?
All I’m thinking is that, were I to capture an oil well (and there are oil wells near where I live), I wouldn’t know what to do with it.
It’s not rocket surgery to folks who have worked around it, oil theft is a problem anywhere there are oil wells. the same trucks that haul waste salt water and oil from wells can do double duty hauling stolen oil at night. A crooked truck driver is all that’s needed. Nigerians poke holes in the pipeline, often with disastrous results, for example.
There were satellite pics of tanker truck convoys leaving ISIS-held territories crossing into Turkey not too long ago. Pay the guy at the border a few bucks, give the terminal a cut, you’re in the oil business.
You need to stop thinking of oil sales as like going to your local mall to buy clothes.
For your question. Through middlemen mostly. They will sell oil to someone for cash and kind (food, weapons, medicines, ammunition) and the person will then sell oil on the open market legally and use the money to buy more of the stuff the “bad guy needs”. Make it complicated enough and then there is noway for anyone to really know where oil came from.
Example:
ISIS personnel sell 1000 barrels of oil (oil price is about 48 per barrel today). Which would mean $48,000. However, the actual cost of extracting it to ISIS might be (say) 15 dollars so they sell it for 30.
ISIS agents contact one buyer who agrees to front them 30,000 dollars worth of (say) food. However instead of paying directly to him, they agree to transfer it to a third party who transfer it to Iraq or Turkey or hell the US. They could smuggle it. Mix it in legitimate stock. Said third party and the agent later split the profits (about $9 each per barrel).
More on the sale procedure itself.
The problem in shutting it down is the same as shutting down trade anywhere. Where there is a demand, there is a supply and people all of sudden don’t stop needing fuel oil just because the owners of the fields are despicable.