Regional

Jihadis offer oil deals as air strikes hit output

A former farmer in the Raqqa countryside pours crude oil bought in Deir al-Zor into a distilling pit, part of the refining process.

For those willing to try their luck – and test their fate – there are new deals to be had in the Isis oilfields of eastern Syria. In recent weeks the jihadi group has offered traders a licence to buy up to 1,000 barrels of oil at a time at the lucrative al-Omar oilfield, a deal that would have been unheard of before a US-led coalition launched an air campaign against its financial assets late last year.

“It’s you and your luck. If the coalition doesn’t come out, you’ve made it,” said one Syrian oil trucker in an online interview. “It’s a gamble.”

The coalition campaign has dealt a huge blow to Isis finances in recent months, leading it to cut employee salaries and reduce charity handouts to impoverished locals. But when it comes to oil, Isis is determined to stay in business. From tempting traders with preferential treatment to imposing strict fuel rationing on its own members, locals say the world’s most notorious jihadi force is finding new ways to squeeze every ounce of profit from the oilfields that once netted it $1.5m a day.

Syrian oil truckers and owners of makeshift refineries say that the group’s main fields are still functioning despite frequent air strikes, though often with hours-long pauses as workers and fuel trucks flee bombardment. “Production continues as it has, the prices stay as they were, and the coalition keeps striking just like it has. When the strikes hit, the selling stops for a while ... then people get back to work,” another oil trucker in Syria’s oil-rich Deir Ezzor province said. Like others speaking from Isis-controlled Syria, he asked not to be named.

Prices at al-Omar and al-Tanak, the two main oilfields in Deir Ezzor, have held steady at $45 and $40 a barrel, respectively, higher than international prices thanks to a captive market in Syria’s northern and eastern regions.

When the coalition campaign began in 2014, it initially focused on oil refineries, but Isis simply abandoned them. Then in November the coalition began striking the fields themselves, hitting the hundreds of trucks that once camped nearby waiting to buy crude. Isis adjusted by banning cars from queueing and instead giving them a ticket with a date and time to return. The group sells crude from large pits and storage areas, where traders come to load up, but these are vulnerable to attack. “When the coalition comes and strikes, it sets these pits and storage areas on fire – Isis never gets to sell it,” said the owner of a refinery in the eastern town of Dhiban.

The changes have slowed sales and in a bid to make up for lost profits, Isis recently began offering what locals call a short-term “investment” opportunity: the trader pays for 1,000 barrels of crude up front, skipping the usual days-long wait for as little as 70 barrels at a time. The deal benefits Isis and the traders. The jihadis get money up front that would otherwise take much longer to earn due to stoppages from air strikes. The trader can buy and sell oil in bulk, ensuring higher profits in an unstable market. With several cars, a businessman can easily reach his quota within an hour – if there are no strikes. What he gambles is the life of drivers desperate for a job in Syria after five years of war.

The Deir Ezzor trucker said only three traders at al-Omar oilfield had been granted licences so far. Locals say they are from the area and partnered with Isis shortly after it seized the fields.

“You have to be close to Isis to get it [a licence], and in order for it to be profitable you have to be a big trader with lots of vehicles, which the other traders don’t really have. These traders can send in 10 cars at a time to fill up at the field.”

Even with the new measures, the jihadi force is struggling to cope with financial losses under a more forceful coalition military campaign that has seized back the Sinjar region in western Iraq and, most recently, the eastern Syrian town of Shadadi. The group lost its first oilfield, al-Jabsah, at Shadadi last week. Local refinery owners said it was producing about 3,000 bpd.

To economise, the group’s members are no longer given free canisters of gas; stipends for the poor have been halted; administrative employee salaries have been cut; and fuel has been rationed in hospitals and in military operations.

Fighters say Isis also used to offer cars, pick-up trucks and generous fuel rations to each military zone, but these have all been cut.

Some military sectors were given a few motorcycles as replacements, according to a former Isis commander. “It’s easier to shoot someone on a motorcycle. That’s not a security decision, that’s economising.”

 
A version of this article appeared in the print edition of The Daily Star on February 29, 2016, on page 16.

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