As ISIS (or IS or ISIL or Daesh) has ramped up attacks worldwide, Republican presidential candidates have proclaimed there is a very simple solution to defeat them: bomb their oil fields. Donald Trump put it bluntly, “ISIS is making a tremendous amount of money because they have certain oil camps, certain areas of oil that they took away…I would bomb the shit out of ’em. I would just bomb those suckers.”
Ben Carson put forward a similar plan sans profanity in a Washington Post op-ed, saying our strategy must include “identifying and cutting off their sources of supply and funding — namely the oil fields along Syria’s eastern border. We need to either destroy the fields with airstrikes or take them and hold them.” A week earlier, Carson said in a debate that this could be done “fairly easily.”
And why has the military not taken this easy strategy? Some critics used as fodder the fact that President Obama’s former CIA director Michael Morell said the administration wanted to avoid “environmental damage.” A few right wingers twisted this to claim some sort of lefty green agenda by Obama is all that stands between us and defeat of ISIS. However, they deemphasized that Morell said another reason is “that’s infrastructure that’s going to be necessary to support the people when ISIS isn’t there anymore”
So are we a few strategic bombings away from victory, if only Obama acted instead of trying to save the environment?
The answer: probably not.
That’s because oil is not the primary source of revenue for ISIS. This factoid has proliferated, including this article in the Washington Examiner matter-of-factly stating that oil is “Islamic State’s chief source of income”; or this Financial Times infographic calling oil “the militant group’s biggest single source of revenue.”
However, recently leaked ISIS financial records reveal that revenue from oil and natural gas, while substantial, nevertheless pales in comparison to revenue from “confiscation,” including property, goods, money, and forbidden tobacco and alcohol. Meanwhile, taxation (which others typify as more like extortion) account for almost as much revenue as oil and gas. This included income tax, as well as taxes on wheat, barley, fruit, and – cliche as it sounds – camels. There was probably also revenue from taxation on antiquity sales. And if we lump together confiscation and taxation as one category – appropriation from the populace, let’s say – then that accounts for a supermajority of ongoing ISIS revenue. So the real main source of revenue for ISIS is the people themselves, which is not something Trump or Carson would suggest bombing. (I hope not, anyway.)
The leaked bureaucratic documents tabulate revenue for the Deir az-Zor province, which is the largest source of oil in ISIS-controlled Syria. It covers revenue for the Islamic calendar month of Rabi’ al-Awal, which corresponds to December 23 of last year through January 22. For that month, the breakdown of revenue in the records came out as:
|Oil and Gas||$2,335,000||27.7%|
So the province collected about $2.3 million in oil and gas revenue for an Islamic calendar month that lasted 29 days. That works out to about $80,500 per day, a far cry from the $1-1.5 million a day estimate that media sources generally quote now, let alone the $3 million a day some outlets bandied last year. Even if the month were an anomaly with lower production, and even though there is oil and gas produced in other provinces, it is still highly unlikely that revenue could be close to the popular estimates.
Another major revenue source for ISIS is ransom money, though it is unclear if that is part of any of the categories listed in the financial documents. The US, for its part, refuses to pay ransom money, though most other governments do. Individuals may also be compelled to pay, such as a refugee whose three year old daughter was taken from her.
But besides ongoing streams of revenue, the biggest source of ISIS funds may simply be the one-time influx of cash from raiding any financial institutions in territories it has conquered. As a result, Assistant Treasury Secretary for Terrorist Financing Daniel L. Glaser concluded that oil is really the third most important revenue source for ISIS:
I think the most important source of revenue for ISIL…is the money that was in the bank vaults that was there when ISIL took control of the territory…Moving on from there though, there are certainly renewable sources of wealth that they have. The most important one of those would be extortion or taxation…And then the third most important source of revenue is the sale of oil.
There are a number of reasons why ISIS is not profiting as much on oil as we may think. For one, black market oil sells for substantially less than the legitimate market, about $18 a barrel compared to $47. On top of that, ISIS does not have the capability to produce oil on par with legitimate companies. Whereas today’s energy companies have plenty of sophisticated technology to maximize extraction and refinement, nonetheless it is possible with rudimentary technology, and ISIS is making do with slimmer profits from less efficient extraction and a lower quality product. For that matter, the bombing of energy infrastructure we have done already probably has caused a major drop in their ability to extract and distribute.
Another major factor curbing oil profits is the sheer lack of expertise within ISIS-controlled territories. Much of the intellectual capital needed for producing and distributing energy has fled, and those remaining with the capability, including criminal networks, need major incentives to cooperate with a regime that might have killed their friends and family a few weeks earlier. That means people getting cuts of revenue throughout the process. In fact, ISIS’s preferred method of oil revenue is to lease fields to wealthy Syrian families and collect taxes on the below-market profit margins, a practice affectionately known as “ant trading.”
On top of the myth that ISIS is living off oil revenue is the myth that energy infrastructure is easy to destroy. Although movies (and footage of burning Kuwaiti oil fields) might lead someone like Trump or Carson to believe that one flame will blow everything up, in reality it is not that easy to disrupt oil production. You can indeed achieve Bruckheimer-level flames in real life, but the actual steel infrastructure is much harder to destroy, and the drillpipe to a deposit, arguably the most important part, is underground. As I said, ISIS often relies on rudimentary technology that is relatively easy to build: oil can be extracted with a simple pump, then refined by essentially cooking it in a giant steel pot.
The distribution phase is not much different. While other parts of the world have vast infrastructures of pipelines and tankers to transport oil and gas, ISIS relies on a network of smuggling that can be as simple as someone carrying barrels of oil in his car, or even horses and mules. (The smuggling network is a holdover from the Saddam Hussein regime, when economic sanctions prevented selling oil legitimately.)
We can also take comfort in knowing that, even if we did nothing, ISIS will likely not even be able to produce oil much longer. Without the intellectual capital or spare parts on hand to properly maintain and repair the infrastructure, it is probably only a matter of time before things break down. How long that would take is unclear: one expert estimated a year, but did so a year ago.
So while bombing oil fields in ISIS territories is valuable strategically, it is not going to be a solution on its own, because it is not their main source of revenue. Much more of their revenue comes from extracting money and resources from the populace under their control, which has no simple infrastructure to target.
I do not claim to be an expert on defense, nor do I claim to have the grand solution to defeating ISIS. However, the consensus is that it will be neither quick nor easy, despite Ben Carson’s claim. Victory also cannot not happen without winning the war of ideas, meaning we have to counter ISIS propaganda, including by welcoming Syrian refugees. Military action is an attractive kneejerk response, and likely needs to play a role, but it is not the only answer.