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Page added on August 22, 2014
ISIS’ thirst for oil could lead to ‘global catastrophe’ if unchecked
Islamic State’s thirst for blood has the world on edge, but its equally insatiable yearning for oil could prove a “catastrophe” for the global economy if the terror organization isn’t stopped, experts say.
The jihadist group, formerly known as ISIS, now controls seven oil fields and two small refineries in northern Iraq, bringing in as much as $2 million per day by selling up to 40,000 barrels via middlemen in illicit deals. The black market oil sells for roughly $25 to $60 per barrel, compared to the current market rate of $102, according to Luay al-Khatteeb, founder and executive director of the Iraq Energy Institute. And while this is a veritable drop in the global bucket of oil production, the crude spigot will continue translating into terror funds for Islamic State militants if unchecked, al-Khatteeb and other experts told FoxNews.com.
“Unless we choke this organization’s revenues, and the areas it’s able to access revenues, it’s going to keep growing,” said Denise Natali, a senior research fellow for the Institute for National Strategic Studies. “The Iraqi government has announced it now, but this has been going on for months.”
“Unless we choke this organization’s revenues, and the areas it’s able to access revenues, it’s going to keep growing.”- Denise Natali, Institute for National Strategic Studies
On Wednesday, Iraq’s Oil Ministry warned buyers of crude oil that unauthorized purchases made in the country could be used to fund terror activities by Islamic State. Buyers were urged to “exercise caution” and were reminded that any purchases without authorization from Iraqi officials could result in sanctions for financial terror activities.
Experts told FoxNews.com that ISIS-controlled oil fields and refineries in northern Iraq could potentially produce as much as 80,000 barrels daily, but is currently netting about half of that since most of the oil is confiscated directly from tanks and pipes. By comparison, southern Iraq produces more than 3 million barrels daily, while Texas produces about 2.5 million. A more direct comparison would be to production in Alabama and Mississippi, where approximately 28,000 and 66,000 barrels are produced daily, respectively. (Turkey, meanwhile, produces about 46,000 barrels daily, according to estimates.)
One of the stated goals of Islamic State militants, Natali said, is to take over the Arabian Peninsula, home to vast amounts of the world’s natural energy resources. If ultimately achieved, that development could drastically alter the region’s landscape.
“This can significantly imbalance, if continued, some of these regional energy sources,” Natali told FoxNews.com. “So the idea that ISIS is going to even touch of the fields in the south, which has not happened yet, is still enough of a threat to get involved. This could destabilize the entire region.”
Natali continued: “That’s what I think the focus has to be. Whose priority is this?”
A source close to the matter told London-based newspaper Asharq Al-Awsat that Islamic State is selling Iraqi oil to Kurdish traders in regions bordering Iraq, Iran and Syria before being shipped to Pakistan, where it’s being sold for less than half of market rates.
While production within those oil fields is globally insignificant, it does directly power the extremist group, offering the militants a degree of fiscal autonomy, according to al-Khatteeb.
“They’ve become very much self-sufficient,” he told FoxNews.com. “They control about 60 percent of Syria’s producing fields in its oil-rich eastern region. In Iraq, they control about seven oil-producing fields and two small refineries with a potential output of 80,000 barrels. And the black market is expanding into Turkey, which is becoming the main beneficiary of that market.”
Al-Khatteeb noted that the oil money is far from the extremist group’s sole income, citing its frequent illegal operations like extortion, kidnapping for ransom and by selling the large numbers of antiquities stolen from looted sites in northern Iraq.
“It’s insignificant at this point, but it provides them significant financial backing,” al-Khatteeb said of the oil production facilities now controlled by Islamic State. “Just on the Iraqi side, this is nearly three-quarters of a billion a year and this is, of course, not their only source of revenue.”
The extremist group numbers as many as 25,000 fighters, roughly half of whom are foreign-born, or outside of Iraq or Syria. The collective eyes of the terror organization now lie on oil-rich territories in Libya and throughout the Arabian Peninsula, particularly in Saudi Arabia.
“Now if that’s to happen, then we’re going to have a global catastrophe because that’s a region that produces 40 percent of global energy and holds 60 percent of conventional oil and gas taken hostage by terrorists,” al-Khatteeb told FoxNews.com. “Will the world need to wait until that moment happens? If that happens, it’ll create havoc across the hemisphere.”
A Turkish lawmaker reportedly claims that the militants have smuggled Syrian oil into Turkey worth approximately $800 million. Ali Ediboglu, a Republican People’s Party legislator for the border province of Hatay, told Taraf newspaper he fears the violent atrocities and indiscriminate killings that have taken place throughout Iraq and Syria could migrate to his country.
“You can never know what demands they could make to Turkey, a country whose regime they consider to be un-Islamic,” Ediboglu told the newspaper. “No one can guarantee they will not repeat the massacres they commit in Iraq today or carry out similar attacks in Turkey tomorrow.”
10 Comments on "ISIS’ thirst for oil could lead to ‘global catastrophe’ if unchecked"
M_B_S on Fri, 22nd Aug 2014 1:43 pm
Oil is the problem not the solution!
This fox never catches the dug.
M_B_S
Northwest Resident on Fri, 22nd Aug 2014 1:44 pm
(fill in the blank)’s thirst for oil could (WILL!) lead to ‘global catastrophe’ if unchecked.
Plantagenet on Fri, 22nd Aug 2014 2:23 pm
How big a deal can this be if Obama is still on vacation on Martha’s Vineyard and playing golf every day?
Dredd on Fri, 22nd Aug 2014 4:19 pm
Insatiable “thirst for oil” …
Are “we all ISIS” now (The Universal Smedley – 3)?
John Orr on Fri, 22nd Aug 2014 4:44 pm
Well….we can get it from elsewhere…..the world doesn’t stop…
• Argentina’s shale prospects are heating up with another new discovery on 14 August by YPF in the Neuquen basin, showing shale oil in the Agrio formation. George Soros has also boosted the prospects here by doubling his stake in state-owned YPF. Our assessment is that Argentina will pull out of its debt problem and the stigma of the seizure of Spanish Repsol’s YPF shares is being reduced significantly.
• US-based Apache Corp reports that an exploration well offshore Western Australia state had found as much as 300 million barrels of crude. Apache predicts this could turn out to be one of Australia’s largest discoveries in decades. Drilling was in the Phoenix South-1 well in the offshore Canning Basin. The well was drilled in 133 meters of water.
• Uruguay’s state-run oil company Ancap began exploring for petroleum reserves in Salto along with the American company Schuepbach Energy Uruguay. On 13 August 2014, Ancap President José Coya, Director of Exploitation and Production Héctor de Santa Ana, and Schuepbach Director Martin Schuepbach officially announced the initiative in San Antonio. Samples are being sent to laboratories in the U.S. for analysis, which is expected to be completed by the end of 2014, according to our partners at Southern Pulse.
• Turkish state-run Vakifbank and private Isbank will lend $1 billion to state oil company TPAO so it can buy Total’s stake in an Azeri gas project, an energy official told Reuters on condition of anonymity. With the purchase of Total’ shares, TPAO becomes the second-largest shareholder in Azerbaijan’s Shah Deniz field, after BP. The Shah Deniz oil field produces 120 million barrels of crude per day. Shah Deniz is operated by BP with a share of 28.83%. TPAO holds 19% and the Azeri state-run oil company, SOCAR, holds 16.67%.
• Kuwait has concluded a new 10-year deal with China’s Sinopec Corp to nearly double supplies by offering to ship the oil and sell on a more competitive cost-and-freight basis. State-run Kuwait Petroleum Corp will export 300,000 barrels per day (bpd) of crude oil under the agreement, which would amount to 15% of Kuwaiti petroleum exports and estimated to be worth $120 billion. The previous contract, which expired, was for between 160,000 bpd and 170,000 bpd.
• Mexican conglomerate Alfa SAB de CV said it paid C$189.4 ($172.7 million) to increase its total stake in Pacific Rubiales Energy Corp to 17.07%.
• Russian oil company Rosneft is preparing to acquire the bulk of U.S. bank Morgan Stanley’s physical oil trading operations
• Norwegian energy firm Det Norske Oljeselskap is set to acquire Marathon Oil Corp’s Norwegian business
• Vine Oil & Gas LP of Dallas, and Blackstone Energy Partners, an affiliate of Blackstone, have announced an agreement to acquire the Haynesville assets of SWEPI LP and Shell Gulf of Mexico Inc., affiliates of Royal Dutch Shell plc, for $1.2 billion. The assets comprise over 107,000 net acres in North Louisiana in the core of the Haynesville Shale natural gas shale basin.
• Brightoil Petroleum Holdings Ltd has just completed a $1.05 billion purchase of Anadarko Petroleum Corp’s oilfield stakes in China, and plans to make another major acquisition in the next 12 months.
bobinget on Fri, 22nd Aug 2014 5:51 pm
Related to ‘Jack Orr’ State Rep. 1950’s Miami, Fl?
Good compilation on oil news front. Who gets credits?
Makati1 on Fri, 22nd Aug 2014 8:04 pm
40,000 barrels per day is less than the rounding error of world oil output per day. Less than .002%. If it got to 4 million barrels per day, then it might actually begin to affect prices.
This is more propaganda from the DC Mafia, to build support for the renewed Iraq war. ISIS is an American product anyway and is using American weapons and equipment ‘captured’ in Iraq and Syria. You need to read sources outside of the Ministry of Propaganda.
Poordogabone on Fri, 22nd Aug 2014 8:20 pm
according to those muppets we are paying a premium of $10 per barrel because of ISIS, great, they keeping the oil industry in business. At $87 a barrel, how many new oil projects would be shelved? Go ISIS!!!! prolonging happy motoring. What a load of garbage.
Everyone do yourself a favor and throw your TV set out the window, just make sure that no one is walking underneath.
https://www.youtube.com/watch?v=k8KnGio4oJ8
Keith_McClary on Fri, 22nd Aug 2014 11:19 pm
John Orr:
Kuwait isn’t “elsewhere”.
“Mexican conglomerate Alfa SAB de CV said it paid C$189.4 ($172.7 million) to increase its total stake in Pacific Rubiales Energy Corp to 17.07%.”
That is not going to produce any more oil. (According to insider opinion, quite the opposite, unless the Mexicans are smarter than the insiders think).
John Orr on Sat, 23rd Aug 2014 3:31 pm
It’s just some pointers on where to put your money guys…all’s not lost yet…at the moment things don’t stand still for anyone…no item is more important than the whole…