Caliphate staggers as ISIS takes heavy hits
BEIRUT - Two months into the most sustained air campaign against Islamic State oil production in Syria and Iraq, US officials say air strikes have inflicted heavy blows on an industry which had netted the self-proclaimed caliphate more than $1 million a day.
After several military setbacks in recent months and the loss of many military commanders, senior administrators and economic managers in air strikes and special forces raids, the caliphate spanning western Iraq and north-eastern Syria may be starting to unravel.
The consensus is that the caliphate is not yet falling apart but has lost some of its most experienced leaders while Operation Tidal Wave II — for reasons unknown named after the failed US second world war air campaign to knock out the Nazi-occupied oil fields in Romania — is finally hitting the Islamic State (ISIS) where it hurts and has seriously curtailed the group’s black market sales of oil from captured fields in Syria and Iraq, one of its main sources of revenue.
“We’re already seeing a degraded capability… in terms of management of fields and transport of crude and fuel,” observed Amos Hochstein, the US State Department’s special envoy for international energy affairs and a key figure in monitoring ISIS’s oil business.
In a December 8th report, the London-based security consultancy IHS Janes observed that strikes by a US-led coalition of 13 countries, including France and Britain, have “significantly degraded” ISIS oil sales, the caliphate’s second most important revenue stream after taxes imposed on the 8 million people living in territory controlled by the group.
“Efforts to target the Islamic State’s sources of revenue are paying off,” observed senior analyst Columb Strack.
Studies in 2014 found that ISIS controlled assets in excess of $2 trillion and had an annual income of around $2.9 billion. However, a highly detailed December 28th analysis by the Baghdad-based Iraq Oil Report concluded that the intensifying US air campaign against ISIS “has nearly closed down its oil operations in Iraq and has hampered its more lucrative business in Syria, eroding the group’s largest source of financing and threatening its ability to govern territory.”
Most of the key raids have taken place in recent weeks, indicating that the Americans have acquired high-level intelligence on ISIS that has transformed the air campaign, virtually the only direct action the administration of US President Barack Obama is taking against the jihadists.
Much of that intelligence, the Americans claim, came from a May 15th raid by the US Army’s Delta Force special operations group deep into the Deir ez-Zor oil field in eastern Syria against the headquarters of Abu Sayyaf, a Tunisian who oversaw the group’s black market business from oil and gas fields it captured in 2014.
Although Abu Sayyaf was relatively unknown, he was a key member of the ISIS hierarchy and was reputed to be close to Abu Mohammad Al-Adnani, a close aide of Abu Bakr al-Baghdadi, the self-proclaimed ISIS caliph.
The Iraq Oil Report, citing two US officials with access to the Abu Sayyaf intelligence, said his “records showed that he ‘had direct access to ISIS’s top leadership… which is a reminder of how important his operation was to the organisation as a whole’.”
The plan was for the Delta Force team, flown in from Iraq for the night-time attack, to take him alive but he was killed in a gun battle. Even so, the raiders left with what US sources say turned out to be a treasure trove of documents and computer hard drives that contained high-value intelligence, not only on the ISIS leadership but also on the inner workings of the jihadists’ illicit oil and gas network. They also captured Abu Sayyaf’s wife, who was reputedly involved in ISIS operations.
The Iraq Oil Report said that raid gave the Americans “unprecedented insight into (ISIS’s oil) operations” and gave them a detailed “picture of how the various pieces of the oil sector fitted together. This holistic view of the ISIS organisation appears to have informed a series of military operations that have tightened a noose around Mosul”, the largest city held by ISIS.
In recent weeks, Iraqi federal forces, Kurdish peshmerga and Iranian-backed Shia militias — all backed by US air power — have recaptured “almost all oil assets that ISIS militants once controlled in Iraq”, the Iraq Oil Report observed.
Now the jihadists only control the Qayyarah field 80 km south of Mosul, Iraq’s second largest city and ISIS’s centre of gravity in the country.
The main thrust of Tidal Wave II is now against “the group’s remaining oil assets, which are concentrated in Syria”. These include about 200 wells, although the Qayyarah field has been attacked at least 30 times since early November, about one strike every 48 hours.
ISIS “is now struggling to provide basic services: prices of fuel, food and other goods have shot up recently while fuel shortages have affected the availability of electricity, and, in some areas of Mosul, running water”, the Iraq Oil Report said.
Oil that once reached ISIS-held areas in Iraq from the Syrian Deir ez-Zor fields has been cut off as ISIS forces have been pushed back in northern Syria, severing a vital source of cheap fuel and sharply limiting ISIS’s ability to maintain electricity and water supplies.
ISIS “draws much of its strength — financially, militarily and ideologically — from its ability to perform many functions of a state”, the Iraq Oil Report observed. “Oil has been centrally important to that ambition, not only in providing financing and fuel for military operations, but also powering an economy whose success has the potential to bolster the organisation’s popular legitimacy.”
According to US assessments, the stepped-up air raids have destroyed most of the ISIS’s oil tanker fleet of at least 1,000 vehicles, needed to haul the oil to market. Nearly 400 vehicles were claimed knocked out in two US attacks — 116 on November 16th in eastern Syria near the Iraqi border and 283 on November 23rd near Deir ez-Zor.
Until the Americans, along with the French, British, Saudis and others, began hitting ISIS’s tanker fleet in early November, they had avoided hitting the group’s oil facilities. This was largely due to concern that obliterating them would make life difficult for future governments in Damascus and Baghdad and to avoid civilian casualties.
“The war will end,” State Department deputy spokesman Mark Toner observed in September 2014. “We don’t want to completely and utterly destroy these facilities to where they’re irreparable.”
Most of the oil infrastructure is in Syria but Baghdad had asked the Americans not to target Iraqi installations.
Until November, the Americans’ main oil targets had been dozens of “modular oil refineries”, small, makeshift units east of the Syrian city of Raqqa, the caliphate’s de facto capital which had produced some 300-500 barrels of refined petroleum daily.