BRATISLAVA – ISIL’s ability to smuggle oil across the Iraqi border and finance its jihadist activities from oil revenue has almost stopped, a German expert on ISIL, Hans-Jakob Schindler, told New Europe in an interview on the sidelines of the GLOBSEC conference in Bratislava on May 27.
“Certainly there was an issue with cross-border smuggling of oil a few years ago. That’s by and large no longer the case,” said Schindler, who is the Coordinator ISIL (Da‘esh)/Al-Qaida/Taliban Monitoring Team of the United Nations Security Council.
“There is not enough volume left. Obviously, they need oil and oil products to run their war machine. I mean, these trucks don’t drive by themselves,” he said, adding that everyone else in Syria also needs oil and oil products.
“So the time where they used themselves, sell to everyone plus smuggle across the borders is by and large over simply because the production is so low right now and the new oilfields are quite badly damaged,” Schindler said, noting that it is inconceivable that the oil production will increase until there would large-scale investment and repairs, which “they are not going to do because of the airstrikes which are directly targeting the oilfields”.
“But what ISIL has done is to prove a concept: That under very specific circumstances this is an extremely valuable income stream,” he told New Europe.
Schindler explained that ISIL never tried to smuggle oil in Libya because the difference between Libya and Iraq and Syria is that the oil transport is all pipeline based. “So you cannot extort from a pipeline. But in Syria and Iraq the oil was transported mainly by trucks and that’s an easy way to then inject yourself in that oil economy. While in Libya, all they could do was to deny oil revenue to others so they actually blew up pipelines, they attacked oil facilities,” Schindler said.
Asked if they could siphon oil from the pipeline, he said the jihadist group could siphon oil for its own use. “But you are not gonna have a commercial activity by simply drilling a hole in a pipeline. In order to make this commercially viable you need to rebuild a little bit of infrastructure where you can fill up the trucks with oil,” he said, adding that it’s a viable commercial activity apart from the fact that there are not that many oil trucks in Libya because everybody was getting their oil from the pipeline.
Schindler noted that “there is a lot of attention being paid to ISIL financing” not only at the member state level but also on the Financial Action Task Force on Money Laundering (FATF) level. There is the global coalition counter ISIL financing working group where they exchange information on ISIL financing and a coalition between Turkey, Iran, Syria and Russia, also look at ISIL financing. “In a way there are many frameworks in which ISIL finances is looked at,” Schindler said.
“Certainly what was a problem, but the Turkish government was working on that quite diligently from the beginning, was that Turkey was misused as a outlet for oil from Syria,” he said, adding that Turkey also seized a lot of oil that came across the border at that point.
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