[News] Raqqa's Rockefellers: How Islamic State oil flows to Israel
news at freedomarchives.org
Wed Dec 2 16:24:50 EST 2015
Raqqa's Rockefellers: How Islamic State oil flows to Israel
By: Al-Araby al-Jadeed staff
26 November, 2015
Oil produced by the Islamic State group finances its bloodlust. But how
is it extracted, transported and sold? Who is buying it, and how does it
Oil produced from fields under the control of the Islamic State group is
at the heart of a new investigation by al-Araby al-Jadeed. The black
gold is extracted, transported and sold, providing the armed group with
a vital financial lifeline.
But who buys it? Who finances the murderous brutality that has taken
over swathes of Iraq and Syria? How does it get from the ground to the
petrol tank, and who profits along the way?
The Islamic State group uses millions of dollars in oil revenues to
expand and manage vast areas under its control, home to around five
IS sells Iraqi and Syrian oil for a very low price to Kurdish and
Turkish smuggling networks and mafias, who label it and sell it on as
barrels from the Kurdistan Regional Government.
It is then most frequently transported from Turkey to Israel, via
knowing or unknowing middlemen, according to /al-Araby/'s investigation.
The Islamic State group has told al-Araby that it did not intentionally
sell oil to Israel, blaming agents along the route to international markets.
All around IS-controlled oil fields in northern Iraq and eastern Syria,
there are signs that read: "Photography is strictly forbidden -
violators risk their safety." They have been signed in the name of the
These oil fields are in production between seven and nine hours a day,
from sunset to sunrise, while production is mostly supervised by the
Iraqi workers and engineers who had previously been running operations,
kept on in their jobs by IS after it captured the territory.
IS is heavily dependent on its oil revenues. Its other income, such as
from donations and kidnap ransoms has slowly dwindled. Workers in IS oil
fields and their families are well looked after, because they are very
important to the group's financial survival.
IS oil extraction capacity developed further in 2015 when it obtained
hydraulic machines and electric pumps after taking control of the Allas
and Ajeel oil fields near the Iraqi city of Tikrit.
The group also seized the equipment of a small Asian oil company that
was developing an oil field close to the Iraqi city of Mosul before IS
overran the area last June.
IS oil production in Syria is focused on the Conoco and al-Taim oil
fields, west and northwest of Deir Ezzor, while in Iraq the group uses
al-Najma and al-Qayara fields near Mosul. A number of smaller fields in
both Iraq and Syria are used by the group for local energy needs.
According to estimates based on the number of oil tankers that leave
Iraq, in addition to /al-Araby/'s sources in the Turkish town of Sirnak
on the border with Iraq, through which smuggled oil transits, IS is
producing an average of 30,000 barrels a day from the Iraqi and Syrian
oil fields it controls.
The export trek
Al-Araby/ has obtained information about how IS smuggles oil from a
colonel in the Iraqi Intelligence Services who we are keeping anonymous
for his security.
The information was verified by Kurdish security officials, employees at
the Ibrahim Khalil border crossing between Turkey and Iraqi Kurdistan,
and an official at one of three oil companies that deal in IS-smuggled oil.
The Iraqi colonel, who along with US investigators is working on a way
to stop terrorist finance streams, told /al-Araby/ about the stages that
the smuggled oil goes through from the points of extraction in Iraqi oil
fields to its destination - notably including the port of Ashdod, Israel
"After the oil is extracted and loaded, the oil tankers leave Nineveh
province and head north to the city of Zakho, 88km north of Mosul," the
colonel said. Zakho is a Kurdish city in Iraqi Kurdistan, right on the
border with Turkey.
"After IS oil lorries arrive in Zakho - normally 70 to 100 of them at a
time - they are met by oil smuggling mafias, a mix of Syrian and Iraqi
Kurds, in addition to some Turks and Iranians," the colonel continued.
"The person in charge of the oil shipment sells the oil to the highest
bidder," the colonel added. Competition between organised gangs has
reached fever pitch, and the assassination of mafia leaders has become
The highest bidder pays between 10 and 25 percent of the oil's value in
cash - US dollars - and the remainder is paid later, according to the
The drivers hand over their vehicles to other drivers who carry permits
and papers to cross the border into Turkey with the shipment, the Iraqi
intelligence officer said. The original drivers are given empty lorries
to drive back to IS-controlled areas.
According to the colonel, these transactions usually take place in a
variety of locations on the outskirts of Zakho. The locations are agreed
Before crossing any borders, the mafias transfer the crude oil to
privately owned rudimentary refineries, where the oil is heated and
again loaded onto lorries to transfer them across the Ibrahim Khalil
border crossing into Turkey.
The rudimentary refining, according to the colonel, is performed because
Turkish authorities do not allow crude oil to cross the border if it is
not licensed by the Iraqi government.
The initial refining stage is conducted to obtain documents that would
pass the oil off as oil by-products, which are allowed through the border.
According to the intelligence officer, border officials receive large
bribes from local Iraqi smuggling gangs and privately owned refineries.
Once in Turkey, the lorries continue to the town of Silopi, where the
oil is delivered to a person who goes by the aliases of Dr Farid, Hajji
Farid and Uncle Farid.
Uncle Farid is an Israeli-Greek dual national in his fifties. He is
usually accompanied by two strong-built men in a black Jeep Cherokee.
Because of the risk involved in taking a photo of Uncle Farid, a
representative drawing was made of him.
Once inside Turkey, IS oil is indistinguishable from oil sold by the
Kurdistan Regional Government, as both are sold as "illegal", "source
unknown" or "unlicensed" oil.
The companies that buy the KRG oil also buy IS-smuggled oil, according
to the colonel.
*The route to Israel*
After paying drivers, middlemen and bribes, IS' profit is $15 to $18 a
barrel. The group currently makes $19 million on average each month,
according to the intelligence officer.
Uncle Farid owns a licensed import-export business that he uses to
broker deals between the smuggling mafias that buy IS oil and the three
oil companies that export the oil to Israel.
/Al-Araby/ has the names of these companies and details of their illegal
trades. One of these companies is also supported by a very high-profile
The companies compete to buy the smuggled oil and then transfer it to
Israel through the Turkish ports of Mersin, Dortyol and Ceyhan,
according to the colonel.
/Al-Araby/ has discovered several brokers who work in the same business
as Uncle Farid - but he remains the most influential and effective
broker when it comes to marketing smuggled oil.
A paper written
by marine engineers George Kioukstsolou and Dr Alec D Coutroubis at the
University of Greenwich tracked the oil trade through Ceyhan port, and
found some correlation between IS military successes and spikes in the
oil output at the port.
In August, the /Financial Times/ reported that Israel obtained up to 75
percent of its oil supplies from Iraqi Kurdistan. More than a third of
such exports go through the port of Ceyhan.
Kioukstsolou told /al-Araby al-Jadeed/ that this suggests corruption by
middlemen and those at the lower end of the trade hierarchy - rather
than institutional abuse by multinational businesses or governments.
According to a European official at an international oil company who met
with /al-Araby/ in a Gulf capital, Israel refines the oil only "once or
twice" because it does not have advanced refineries. It exports the oil
to Mediterranean countries - where the oil "gains a semi-legitimate
status" - for $30 to $35 a barrel.
"The oil is sold within a day or two to a number of private companies,
while the majority goes to an Italian refinery owned by one of the
largest shareholders in an Italian football club [name removed] where
the oil is refined and used locally," added the European oil official.
"Israel has in one way or another become the main marketer of IS oil.
Without them, most IS-produced oil would have remained going between
Iraq, Syria and Turkey. Even the three companies would not receive the
oil if they did not have a buyer in Israel," said the industry official.
According to him, most countries avoid dealing in this type of smuggled
oil, despite its alluring price, due to legal implications and the war
against the Islamic State group.
Delivery and payment
Al-Araby/ has discovered that IS uses a variety of ways to receive
payments for its smuggled oil - in a manner similar to other
international criminal networks.
First, IS receives a cash payment worth 10 to 25 percent of the oil's
value upon sale to the criminal gangs operating around the Turkish border.
Second, payments from oil trading companies are deposited in a private
Turkish bank account belonging to an anonymous Iraqi person, through
someone such as Uncle Farid, and then transferred to Mosul and Raqqa,
laundered through a number of currency exchange companies.
Third, oil payments are used to buy cars that are exported to Iraq,
where they are sold by IS operatives in Baghdad and southern cities, and
the funds transferred internally to the IS treasury.
Hours before this investigation report was concluded, /al-Araby/ was
able to talk via /Skype/ to someone close to IS in the self-acclaimed
capital of the "caliphate," Raqqa, in Syria.
"To be fair, the [IS] organisation sells oil from caliphate territories
but does not aim to sell it to Israel or any other country," he said.
"It produces and sells it via mediators, then companies, who decide whom
to sell it to."
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