USA TODAY US Edition

U.S. COALITION SLASHES ISIS OIL REVENUE BY OVER 90%

Other sources of funding also drying up as the territory Islamic State controls shrinks

- Jim Michaels @jimmichael­s USA TODAY

The U.S.-led coalition battling the Islamic State has slashed the militant group’s oil revenues by more than 90% over the past two years, all but cutting off its chief source of funds, coalition statistics show.

Islamic State oil production in Iraq and Syria has been cut to less than $4 million a month from a peak of $50 million, according to statistics the coalition provided to USA TODAY.

After sweeping through Syria and Iraq in 2014, the Islamic State seized oil to fund global terror campaigns and governance of its self-proclaimed “caliphate.”

Oil accounted for about half of the group’s revenue. The rest came from looting an estimated $500 million from banks and extorting money from residents trapped in cities occupied by the Islamic State, also known as ISIS.

Those sources of money are drying up, too, as the militants have been expelled from most major cities and much of their stores of stolen cash has been spent or destroyed by coalition forces.

“Losing half their revenues means a lot,” Andrew Tabler, an analyst at the Washington Institute for Near East Policy, said of the oil money. “Their territory is shrinking and so is their ability to tax people.”

The coalition began a targeted campaign aimed at the Islamic State’s oil business in 2015. That air campaign has destroyed more than 2,500 tanker trucks operated by the militants and targeted mobile refineries and other oil infrastruc­ture linked to the group, according to the coalition statistics.

Some of the bombs are small and designed to disable the refineries without destroying them so they can be rebuilt

once the remaining ISIS fighters have been expelled.

“The coalition has regularly conducted strikes against ISIS and their oil production capabiliti­es to degrade their ability to generate revenue from oil resources and facilities,” the coalition said in a statement.

The air campaign, called Operation Tidal Wave II, was named after the 1943 allied bombing of oil refineries that fueled the Nazi war machine during World War II.

The Islamic State captured valuable oil producing regions, including the Bayji refinery in Iraq and the oil-rich Deir al-Zour region in eastern Syria, when the militants rose to prominence in 2014.

The business was simple: The militants sold tankers full of crude oil to middlemen, who had it refined and smuggled out of the country or sold locally. The business generated more than $500 million a year.

The air campaign began disrupting the militants’ oil business, and the trend accelerate­d when U.S.-backed local forces in Iraq and Syria recaptured major cities in Iraq over the past year.

U.S.-backed Iraqi forces retook Mosul, Iraq’s second largest city, in July and anti-ISIS fighters in Syria have recovered about 75% of Raqqa, the Islamic State’s de facto capital.

The Syrian regime is also trying to win back its oil-rich area as the Islamic State collapses.

Backed by Russian airplanes and advisers, forces loyal to Syrian President Bashar Assad are retaking parts of the Deir al-Zour region, near where U.S.-backed Syrian Democratic Forces (SDF) are battling ISIS.

The prospect of capturing oil fields is spurring Assad’s forces, which have moved quickly into the region and at times clashed with the SDF. Russian aircraft bombed SDF troops in September.

“It’s definitely driving the regime,” Tabler said of Assad’s efforts to prevail in a six-year-long civil war. “They want all the loot that goes with the fight.”

As it has lost territory, the Islamic State has retreated to a string of towns and villages along the Euphrates River.

The loss of terrain and revenue is forcing the Islamic State to abandon its dream of governing large territorie­s and instead become a much smaller, though deadly, terror organizati­on.

“We’re all paying close attention to whatever ISIS transforms into next,” said Army Col. Pat Work, a U.S. adviser in Iraq. “But this is an extraordin­ary failure for this so-called state. It wants to be a country and it can’t.”

 ?? AFP/GETTY IMAGES ?? Like a host of other energy sources once controlled by the Islamic State, Syria’s Arak gas field is back in the hands of government forces.
AFP/GETTY IMAGES Like a host of other energy sources once controlled by the Islamic State, Syria’s Arak gas field is back in the hands of government forces.

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