Backgrounder on ISIS Control of Oil Fields in Iraq and Syria and How They Are Selling the Oil on the Black Market

September 25, 2014

Syria, Iraq Oil Controlled by Islamic State Group

BEIRUT — For the first time since the Unites States and five Arab countries started bombing positions of the Islamic State group in Syria, oil installations under control of the militants were targeted overnight and early on Thursday. Here is a look at the oil in the hands if the Islamic State group, which has overrun several large oil fields in Syria and a smaller one in Iraq.

HOW MANY OIL FIELDS DOES THE ISLAMIC STATE GROUP CONTROL AND HOW DOES IT SELL THE OIL?

The group controls as many as 11 oil fields in both Syria and Iraq, analysts say. It is selling oil and other goods through generations-old smuggling networks under the very noses of the Kurdish regional government in northern Iraq as well as authorities in Turkey and Jordan.

Last year, the Islamic State group launched wide offensives in oil-rich areas in eastern Syria and was able to gain control of virtually all major oil fields, including the Omar oil field, Syria’s largest, with a capacity to produce 75,000 barrels a day. On the Iraqi side of the border, the group controls small fields in the central province of Salahuddin and the eastern Diyala province, including the Ajeel and Himrin fields.

HOW MUCH DOES THE ISLAMIC STATE GROUP SELL ITS OIL FOR?

The militants sell the smuggled oil at discount prices —$25 to $60 for a barrel of oil that normally fetches more than $100 — but their total profits from oil exceed $3 million a day, according to Luay al-Khatteeb, a visiting fellow at the Brookings Institution’s Doha Center in Qatar.

The group’s reliance on oil as its main source of revenue could easily be disrupted by the U.S.-led coalition’s airstrikes.

HOW MANY INSTALLATIONS WERE ATTACKED ON THURSDAY AND WHAT WAS THE DAMAGE?

At least four oil installations and three oil fields were hit around the town of Mayadeen in the eastern province of Deir el-Zour, according to the Britain-based Syrian Observatory for Human Rights and two local activist groups. A third activist group loyal to the militants confirmed the reports. It wasn’t immediately clear how important the installations and the fields were.

DOES THE ISLAMIC STATE GROUP CONTROL ANY REFINERIES?

All the major refineries in Iraq and Syria are under government control but the Islamic State extremists control one small refinery in Iraq, the Gayara refinery in the Mosul area. Syria’s two main refineries are in the central city of Homs and the coastal town of Banias. People in areas under Islamic State control use primitive and dangerous ways to refine oil.

WHEN DID THE MILITANT GROUP CAPTURE THE OIL FIELDS IN SYRIA AND IRAQ?

In Iraq, the group captured the oil fields after its offensive in June, during which it overrun large parts of northern, central and western regions of the country. In Syria, rebels have been seizing fields since late 2012, a year after the country’s crisis began. Over the past year, the Islamic State group has taken control of most of the country’s oil fields.

WHAT WAS SYRIA’S OIL PRODUCTION BEFORE THE CRISIS AND WAS THE GOVERNMENT ABLE TO EXPORT OIL AFTER THE CRISIS BEGAN?

The U.S. and European Union banned Syrian oil exports in 2011, depriving Syria of its main European customers. After that, exports came practically to a halt and the constantly dropping production was diverted to domestic needs.

Before the uprising against Syrian President Bashar Assad’s government began in March 2011, the oil sector was a pillar of Syria’s economy, with the country producing about 380,000 barrels a day and exports — mostly to Europe — bringing in more than $3 billion in 2010. Oil revenues provided around a quarter of the funds for the government budget.