Plummeting oil prices have hit Islamic State’s (IS) profits as rogue traders turn back to sanctioned distributors, a researcher said. IS, also known as Da’esh, controls most of the significant oil rigs in Syria and produces between 30,000 and 50,000 barrels of oil a day, said Bahrain Centre for Strategic, International and Energy Studies (Derasat) researcher Abdulaziz Al Dossary.
He was speaking during a symposium, titled the Syrian Crisis, which was held at Derasat’s offices in Riffa yesterday. “Syria produced half a million barrels of oil per day before 2011,” he said. “Syria lost most of the control of oil rigs at that time and it was in the control of the Free Syrian Army before Da’esh existed – we’re speaking toward the end of 2011.
“However, between the end of 2012 and mid-2014, Da’esh began to gain control of the oil rigs. “Da’esh now produces between 30,000 to 50,000 barrels of oil a day.” However, he said the fall in oil prices last year curbed their profits as traders looking for bargain prices no longer turned to the IS for low rates.
“When the prices went down in 2014, it affected Da’esh quite heavily too,” he said. “Some traders might have bought from Da’esh before because the oil prices were over $100 a barrel and Da’esh sold them at $40 which was a big difference.
“However, once prices dropped, no trader would prefer to buy from non-authenticated sources.” He added that people who purchased fuel from IS militants were those who suffered under their rule. “Da’esh have a profit of $1 million to $2m a day from oil alone,” he explained.
“Then, like anyone who produces oil, they have to go through the process of selling and distributing it. They do this in one of two ways – either directly themselves or through intermediaries. They prefer to use intermediaries because they want to focus on protecting the rigs and fighting. From the oil, they produce two main sources of fuel – a type of diesel that in Syria is used for heating and another fuel that is used for cars. There are eight million people under Da’esh’s rule in Syria and Iraq – they need fuel and they are forced to buy it from Da’esh – there are two million people in Mosul alone.”
