<html>
<head>
<meta http-equiv="content-type" content="text/html; charset=utf-8">
</head>
<body bgcolor="#FFFFFF" text="#000000">
<h2 class="DP-ContentTitle">Raqqa's Rockefellers: How Islamic State
oil flows to Israel</h2>
<span class="writerName"><a>By:</a>
<a
href="http://www.alaraby.co.uk/english/author/2014/12/5/Al-Araby-al-Jadeed-staff">Al-Araby
al-Jadeed staff </a> </span> <span class="date"><br>
26 November, 2015<br>
<b><small><small><small><a class="moz-txt-link-freetext" href="http://www.alaraby.co.uk/english/features/2015/11/26/raqqas-rockefellers-how-islamic-state-oil-flows-to-israel/">http://www.alaraby.co.uk/english/features/2015/11/26/raqqas-rockefellers-how-islamic-state-oil-flows-to-israel/</a></small></small></small></b><br>
</span>
<div class="DP-Tags desktopOnly"><br>
</div>
<div class="DP-Summary">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 reach Israel?</div>
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.<br>
<br>
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?<br>
<br>
The Islamic State group uses millions of dollars in oil revenues to
expand and manage vast areas under its control, home to around five
million civilians.<br>
<br>
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.<br>
<br>
It is then most frequently transported from Turkey to Israel, via
knowing or unknowing middlemen, according to <em>al-Araby</em>'s
investigation.<br>
<br>
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.<br>
<strong><br>
Oil fields<br>
</strong><br>
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 IS group.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
According to estimates based on the number of oil tankers that leave
Iraq, in addition to <em>al-Araby</em>'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.<br>
<strong><br>
The export trek<br>
</strong><em><br>
Al-Araby</em> has obtained information about how IS smuggles oil
from a colonel in the Iraqi Intelligence Services who we are keeping
anonymous for his security.<br>
<br>
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.<br>
<br>
The Iraqi colonel, who along with US investigators is working on a
way to stop terrorist finance streams, told <em>al-Araby</em> 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, <a
href="http://www.alaraby.co.uk/english/news/2015/8/24/three-quarters-of-israels-oil-imported-from-iraqi-kurdistan"
target="_blank">Israel</a>.<br>
<br>
"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.<br>
<br>
"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.<br>
<br>
"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 commonplace.<br>
<br>
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 colonel.<br>
<br>
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.<br>
<br>
According to the colonel, these transactions usually take place in a
variety of locations on the outskirts of Zakho. The locations are
agreed by phone.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
According to the intelligence officer, border officials receive
large bribes from local Iraqi smuggling gangs and privately owned
refineries.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
The companies that buy the KRG oil also buy IS-smuggled oil,
according to the colonel.<br>
<br>
<strong>The route to Israel</strong><br>
<br>
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.<br>
<br>
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.<br>
<br>
<em>Al-Araby</em> has the names of these companies and details of
their illegal trades. One of these companies is also supported by a
very high-profile Western official.<br>
<br>
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.<br>
<br>
<br>
<em>Al-Araby</em> 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.<br>
<br>
A <a
href="http://www.marsecreview.com/wp-content/uploads/2015/03/PAPER-on-CRUDE-OIL-and-ISIS.pdf"
target="_blank">paper written</a> 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.<br>
<br>
In August, the <em>Financial Times</em> 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.<br>
<br>
Kioukstsolou told <em>al-Araby al-Jadeed</em> 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.<br>
<br>
According to a European official at an international oil company who
met with <em>al-Araby</em> 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.<br>
<br>
"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.<br>
<br>
"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.<br>
<br>
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.<br>
<strong><br>
Delivery and payment<br>
</strong><em><br>
Al-Araby</em> 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. <br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
<strong>IS responds</strong><br>
<br>
Hours before this investigation report was concluded, <em>al-Araby</em>
was able to talk via <em>Skype</em> to someone close to IS in the
self-acclaimed capital of the "caliphate," Raqqa, in Syria.<br>
<br>
"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."
<div class="moz-signature">-- <br>
Freedom Archives
522 Valencia Street
San Francisco, CA 94110
415 863.9977
<a class="moz-txt-link-abbreviated" href="http://www.freedomarchives.org">www.freedomarchives.org</a>
</div>
</body>
</html>