ISIL oil strategy not working

Amy Myers Jaffe:

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ISIS’ ability to hold territory is critical to its survival but its original concept to grab as many oil fields as possible to fund that future “statehood” is not succeeding. The terror-statist group is finding that the operational challenge of running those oil facilities is beyond the extremist group’s technical capacity.

When ISIS began its campaign in June 2014 to form an Islamic caliphate by seizing large swathes of land in northern Iraq and eastern Syria, of paramount interest to the group was gaining control of producing oil fields and capitalizing on existing oil smuggling operations out of Iraq and Syria to help fund the group’s high operating costs.

Instead, the extremist group is finding it cannot sustain oil production, both because it lacks the technical know-how and also because its fighters cannot stave off attacks to recapture key installations. Few people with strong technical expertise have remained in ISIS-controlled territory and the group’s efforts to coerce skilled staff into staying by threatening the lives of their families or seizing the assets of engineers who have fled in hopes of prompting their return has proved ineffective. ISIS was originally relying on junior engineers who it has either pressured to stay on at their jobs or recruited. However, anything involving serious repair or more complex procedures, such as water injection at Syria’s mature producing fields, is proving a challenge. At one juncture last summer, ISIS was controlling a half a dozen Syrian oilfields (including al-Furat, al-Omar, and Deir ez-Zor) that prior to the war had a capacity of 114,000 b/d. At present, ISIS current production capacity in Syria is roughly 15,000 to 30,000 b/d. ISIS has also captured 6 oil fields in northern Iraq since last summer, including the Ajeel, Himrin, Ain Zalah, Safiyah, Batmah, and Qayara. The fields which have nameplate capacity of 175,000 b/d are now producing less than 10,000 b/d, down from peak levels of 37,000 b/d from peak levels seen when they were first taken over by ISIS.

ISIS oil experience in Syria and western Iraq paints an increasingly dire picture for oil infrastructure in the region. ISIS’ oil strategy is now a risk in more than one way: not only by military battles over control of facilities but also in the event that ISIS wins control, accidentally post-capture by technical ineptitude. The oil experience highlights an even more dangerous outcome, were ISIS to capture major dams in Iraq.

Seeing that controlling oil fields on the ground might not be as large an economic boon to its future as it was hoping, ISIS may also come to see more benefit to simply attacking oil facilities to deny access to the oil revenue for its enemies: the many governments it is targeting. In Libya, parties appear to have moved away from simply grabbing oil facilities to bombing export cargoes. Armed forces affiliated with ISIS had already been conducting a string of attacks on energy facilities in central and eastern Libya, including on fields run by joint-ventures with Western companies.
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ISIL is basically a parasitic Islamist group that is incapable of building or even maintaining complex infrastructure.   Their switch to denial of facilities to their enemies is also fragile in a market glutted with oil.