A report from the conflicted region between Iraq and Syria suggests the organisation of the Islamic State in Iraq and Syria, or ISIS, has captured another oilfield and is already begun selling crude from the field.
The insurgents took the al-Omar oil field in Syria last November. This past Thursday ISIS captured an eastern Syrian oil field, al-Ajeel. On Friday ISIS is said to have seized the al-Tanak oil field in Iraq.Now, according to reports, ISIS is selling the crude on the black market.
"ISIS militants are selling the oil to anyone who is interested. They need the money for weapons and ammunition,” the governor of an Iraq town in the region was quoted as saying. The militia is said to be exporting the crude through the Kurdish region to local refineries or across the Iranian border. ISIS is thought to be shipping 100 tanker loads per day, receiving between $12-14,000 per tank full.
The French Foreign Minister Laurent Fabius suggested ISIS is selling oil to the regime of Syrian President Bashar al-Assad, which is odd considering the regime is the primary target of the insurgents. But then money is always important for waging war.
The big worry is what happens down the road. In May the International Energy Agency identified Iraq as one of the most important future oil exporters. The agency suggested annual output from Iraq would be 9 million barrels a day, almost three times current production of 3.3 million barrels. The rise of ISIS has dampened the optimism on future production increases. Oil exploration companies are likely to be un-willing to invest in Iraq with ISIS in control. A recent article in "The Wall Street Journal" written by Gal Luft, the director of the Institute for the Analysis of Global Security, suggested only 15 percent of the investment in new oil fields is currently being invested in the Middle East. "With Iraq sinking deeper into protracted civil war, investment will fall even more, creating fuel shortages down the road.”