US, Allies Target ISIS Oil Facilities to Disrupt Financing

Fighters from the Islamic State group parade in their northern Syrian stronghold, Raqqa. AP/Raqqa Media Center
Fighters from the Islamic State group parade in their northern Syrian stronghold, Raqqa. AP/Raqqa Media Center

U.S. and coalition warplanes have ramped up airstrikes to cut off Islamic State oil revenue estimated at more than $1 million daily while international efforts to stop the money laundering have lagged behind, U.S. and Pentagon officials.

On Dec. 19, more than 20 fighters, bombers and attack aircraft from the U.S. and two coalition partners carried out "the largest deliberate or pre-planned strike that the coalition has conducted" against oil targets of the Islamic State in Iraq and Syria, or ISIS, said Army Col. Steve Warren, a spokesman for Combined Joint Task Force-Operation Inherent Resolve.

The airstrikes with more than 150 munitions hit five gas and oil separation points in Syria's eastern desert, and two crude oil collection points near the self-proclaimed ISIS capital of Raqqa in northeastern Syria, Warren said this week in a telephone briefing to the Pentagon from Baghdad.

The strikes "dealt a significant blow" to ISIS oil revenue and demonstrated the coalition's ability to "apply pressure to ISIL across the breadth and the depth of their so-called ‘caliphate,'" Warren said, using another acronym for ISIS.

The targeting of ISIS oil facilities and delivery trucks has been dubbed Operation Tidal Wave II by the Pentagon. The original  Operation Tidal Wave was the B-24 Liberator bomber raid on the Ploesti oil fields in Romania during World War II.

As airstrikes have intensified, international efforts to block ISIS' access to financial systems have been lacking in coordination.

Treasury Secretary Jack Lew, who led a meeting of world finance ministers at the United Nations Security Council last Thursday, hailed a resolution on tightening existing sanctions against ISIS but said too many member nations were failing to participate.

"This resolution is a critical step, but the real test will be determined by actions we each take after adoption," Lew said after the resolution passed. "We need meaningful implementation, coordination and enforcement from each country represented here, and many others."

The resolution sponsored by the U.S. and Russia expressed "concern about the lack of implementation" of previous resolutions on the financing of both the Islamic State of Iraq and Syria, and al-Qaida. The resolution also noted an "insufficient level of reporting" by member states on what they have done to implement the sanctions.

In a background briefing at the Pentagon last week, a senior Obama administration official said that ISIS controls about 80 percent of the oil assets in Syria but the U.S. only has rough estimates on how much money ISIS is making off oil.

The current estimate is between $40 million and $48 million per month, or about $1.5 million daily, "but I don't believe that number is accurate anymore" after the recent airstrikes, the official said. "How much lower, you're going to have to ask me again in a couple of weeks."

Over the past year, the coalition has come to the realization of the vital importance of oil revenue and infrastructure to ISIS' view of itself as a functioning state, rather than a terror group such as al-Qaida, the official said.

"When you are trying to be a state, you need to govern, and part of governance is providing for natural resources for power, electricity, fuel, etc. So it's both a symbol of a state as well as revenue generation," the official said.

The official dismissed calls by some of the Republican presidential candidates for the U.S. simply to "carpet bomb" ISIS oil targets.

"So you can bomb the fields, and if you want to carpet bomb the entire operation, that would have a certain value," the official said. "It would also have a lot of costs associated with it."

The problem is "it's not that easy. It doesn't work that way. You can't simply bomb a well. It doesn't do very much," the official said. "Several of the things that you can take out, if you don't take them out in the right way at the right timing in the right place or the right facility, it can be rebuilt, replaced" or a workaround can be found."

The official added that "the cost effectiveness of taking it out is not there. It'll probably cost more to take that facility out than it'll be for them to rebuild it."

The official also dismissed the charge by Russian President Vladimir Putin that ISIS was getting significant funding by smuggling oil into Turkey. "I have said before publicly on the record that we do not believe that there is significant smuggling of oil into Turkey," the official said.

At a later White House briefing, Adam Szubin, the Treasury Department's undersecretary for terrorism and financial intelligence, said "We don't see any evidence that the Turkish government is purchasing oil from ISIL." He was using another name for the terrorist organization.

"The preponderance of their sales, we believe, are happening at the wellhead, in a sense. In other words, they're selling to middlemen or black marketers, who are then in turn providing it to others," Szubin said.

-- Richard Sisk can be reached at Richard.Sisk@military.com.

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