Oil production by ISIS has hit $800mn per year, an equivalent of more than $2mn per day, according the global source of information and analytics IHS.
The terrorist group has been able to generate significant revenues from selling oil and a steep discount. Before its rise in recent months, ISIS would only produce a fraction of the oil capacity of the territory it now controls.
“Oil fuels ISIL’s war machine, notably including the military vehicles vital to its movements and fighting capabilities”, a recent IHS Energy analysis said.
“Oil directly finances ISIS’s myriad activities and encourages the activities of middlemen who sell, transport and export the oil and thus have a vested interest in ISIS”, it added.
ISIL currently controls as much as 350,000bpd in pre-war capacity in Iraq and Syria but IHS estimates that it is only able to produce between 50,000-60,000bpd with the amount varying on a day-to-day basis. This fraction of pre-war capacity is the result of warfare, shut-ins and ISIL’s limited technical prowess operating the fields, IHS says.
The oil that ISIS sells on the black market—mostly via trucks through smuggling routes on the Turkish border, is sold at prices ranging from $25-$60 per barrel, with an average of $40 being a reasonable assumption, IHS estimates. This is compared to around $85 per barrel for Brent, the international benchmark.
Future oil revenues growth for ISIS remains to be determined and will be heavily influenced by lost and gained territories in coming months, according to IHS. It is so far unclear if the terrorist group has enough refining capacity—which currently consists mostly of simple mobile refineries that can be loaded and transported by truck to meet its own needs.
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