No, ISIS Does Not Make $400 Million a Year from Oil

Donald Trump, the man who provides this blog with material more numerous than the stars in our universe, matter-of-factly stated that Daesh makes $400 million a year in oil revenue when justifying his plan to bomb its oil fields:

ISIS is making $400M per year off of oil. I have been saying for years we need to bomb the oil!

Posted by Donald J. Trump on Thursday, December 17, 2015

He cites an article from NBC News that does indeed report this figure. The NBC News reporter does not cite a source, but there are certainly other articles using the same figure, or an even higher one. The Financial Times gives the estimate of $450 million a year. The AP reported it was $500 million a year.

Where do these estimates come from? Well, a leaked document obtained by the AP, which does not seem to have been released to the public, said that Daesh had about $40 million in oil revenue in one month. Multiply that by twelve and, ta-da, you get $480 million. Or divide it by 30, and you get $1.5 million a day.

Nevertheless, leaked documents that are readily available tell a far different story, as I wrote about before. Administrative documents obtained by Aymenn Jawad Al-Tamimi, a reputable expert on Daesh and source of a number of leaked documents, showed the most oil-rich province under Daesh control earned $2.3 million in oil and gas revenue in a month. Extrapolating from that, Al-Tamimi estimates Daesh’s real oil revenue is more like $48-$72 million a year, still a substantial amount but nowhere near what news outlets are quoting.

So why the major discrepancy? Well, even if oil production in Daesh territory generated $400 or $500 million, that does not necessarily mean all of that is going into its coffers. As I already wrote, there are numerous, numerous middlemen along the chain all taking their cut, and all the other costs involved, like workers’ salaries.

Al-Tamimi gave a good overview on the Jihadology Podcast of the reality of oil revenue. I dutifully transcribed it, stammering and all:

I think the problem is, is that, um, distinguishes aren’t being made as to who exactly earns what within the oil industry…the Islamic State’s Diwan al-Rikaz or precious natural resources department, um, will directly control the oil fields but in turn they’ve gotta pay the person-, personnel they’ve coopted, uh, to work on these fields, to maintain the infrastructure, um, so on the balance then in terms of the actual income to the treasury it’s probably going to be actually, income to IS it’s probably going to be much less than 1.5 million dollars a day from oil.

As I said before, the supermajority of ongoing Daesh revenue is from raiding their own people. Confiscating and taxing the people is much more profitable; just taking their money and property has far lower operating cost and fewer logistical challenges than all the things involved in oil extraction, refinement, and distribution.

Meanwhile, a column in Bloomberg Businessweek claimed, “According to U.S. Department of the Treasury officials and data they released in the wake of the Paris mayhem, the terrorist group is actually taking in $500 million from oil a year.” However, I checked the Treasury website, and the references to $500 million said Daesh has total oil revenue of over $500 million, not per year. That is what I saw in separate remarks by Under Secretary Adam Szubin and Treasury Secretary Jacob J. Lew.

So it may very well be, for neither the first nor last time, that the news media and Donald Trump are exaggerating things.