WHAT’S UP WITH ISLAMIC STATE’S OIL BUSINESS?

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This image has no known connection to terrorism.

Selling oil out of your backpack or the trunk of your Chevy Impala may not attract attention from anyone other than your limited circle of physically proximate buyers.

But how can Islamic State — the terror group that has invaded oil-rich sections of Iraq and Syria — run a $500 million a year oil business to fund its murderous operations, and no one seems to know how this business works to a level of detail required to dismantle it?

Who’s buying the oil?

How is the oil being transferred from drilling stations — facilities whose locations are clearly known by virtually everyone — to buyers?

Where are the logistics hubs — places where hundreds of trucks gather to load this illegal oil before transporting it to buyers — and how do they operate?

Wouldn’t the assembly of hundreds of delivery trucks attract the attention of the US and allies who expressed desires to either intercept these trucks or shut down the logistics hubs?

If the answer to that last question is yes, then why hasn’t a shutdown occurred? If no, why not?

How does the oil leave Syria and Iraq to reach buyers?

Let’s assume the illegal oil has been deftly obscured through commingling with legal oil. Where does this commingling take place? What transport routes lead to this commingling center?

How are these oil purchase transactions between ISIL sellers and customers structured? How are these presumably large amounts of money being transferred between sellers and buyers?

Are financial institutions involved in these transactions? What role does trade finance have, if any?

Who are the intermediaries responsible for facilitating the distribution and sales of this illegal oil?

I haven’t even raised questions about refineries, retail (likely too far down the value chain for evidence hunting), boat transport or shipping routes.

I wrote these questions prior to watching the Russia Defense Ministry’s presentation of how ISIL’s oil business works. I then searched for the US State Department’s press briefing where ISIL’s oil operation was discussed.

The divergence in storytelling is amazing.

With a large amount of specificity that included satellite photos, charts, stats and names, four senior Russia defense officials not only provided an extensive analysis of how ISIL’s oil racket works, but the presenters also amplified the impact of their bombshell accusations by implicating the Turkish government as a commercial enabler to ISIL’s criminal enterprise. Turkey is a US ally and NATO member. View the session here or below:

I found that journalists at the State Department press briefing had the same oil questions I raised.

The US, even when presented with Russia’s version of facts during the press briefing, offered no detailed analysis of its own but energetically pushed back against all accusations of Turkey’s involvement with oil smuggling. In fact, the US never acknowledged a review of Russia’s analysis. Watch the video below and fast-forward to time marker 9:35.

My common sense point is that no organization can run a nine-figure regional oil operation without the help — or deliberate ignorance — of other geopolitical actors.

I look forward to hearing the US’s detailed analysis of ISIL’s oil activities …

song currently stuck in my head: “tear it down” – blue magic

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