The Fuse

2016: The Best Year Yet for Coalition Strikes Against ISIS Oil

January 30, 2017

Guest Post by Matthew M. Reed | @matthewmreed

Matthew M. Reed is Vice President of Foreign Reports, Inc., a Washington, DC-based consulting firm focused on oil and politics in the Middle East.

A good chart tells a good story. And the one below shows why 2016 was the worst year yet for the ISIS oil trade. What follows is a month-by-month breakdown of strikes against ISIS oil targets going back to 2014, complete with background.

air strikes isis oil

(Regarding categories: Distribution includes oil trucks, collection points, storage tanks, and pipelines; production includes wellheads, pump jacks, drilling rigs, etc.; refining includes sophisticated refineries and more basic units; other can be anything from heavy equipment to electric generators, etc. Please note the chart scales change year-to-year.)

The first strikes against ISIS oil assets were reported by the Pentagon on September 24, 2014, two months after ISIS exploded onto the international stage by erasing the Iraqi-Syrian border and capturing Iraq’s second-largest city, Mosul. The initial wave of coalition strikes hit 12 semi-sophisticated modular oil refineries in eastern Syria, territory which to this day serves as the beating heart of the ISIS oil industry. Besides the refineries, the U.S. started off by hitting collection points, storage tanks and commercial hubs where ISIS oil was collected.

isis oil strikes 1

Up to that point, the ISIS national oil company (let’s call it ISOC) was essentially an integrated oil company. It recruited industry talent from across the region, produced commercial volumes of oil, used imported refineries to process it, and sold higher-quality fuel for profit and stockpiled it for war; there’s even evidence that ISOC drilled its own wells. According to ISOC’s internal memos, ISIS produced more than 50 thousand barrels/day through early 2015. Monthly revenue was in the range of $40-50 million.

While officials debated the merits of a more aggressive campaign, Abu Sayyaf (a nom de guerre) was running ISOC and raking in a fortune for the so-called Caliphate.

U.S. officials expressed confidence early on that precision strikes were crippling ISIS oil. The group had lost its larger-scale refining operations, the thinking went, therefore the oil was less valuable. Throughout the first half of 2015, the U.S. mostly stuck to the original playbook. Strikes were infrequent and mostly targeted oil in storage, although some pump jacks and drilling rigs were damaged or destroyed. Meanwhile, the debate over strikes and their efficiency raged behind closed doors in Washington. But caution ruled the day. It was assumed that strikes were doing great harm and that expanding the list of targets to include producing assets (e.g. oil wells) would cause uncontainable environmental damage. Complicating matters more was the fact that ISIS relied on civilians to haul their oil by truck and it was assumed ISIS field crews were civilians too.

While officials debated the merits of a more aggressive campaign, Abu Sayyaf (a nom de guerre) was running ISOC and raking in a fortune for the so-called Caliphate. He ran the show from the Omar oil field in Syria. In a daring raid deep inside ISIS territory, U.S. commandos attempted to capture the oil kingpin in May 2015. He resisted and was killed but the documents gathered that night revealed just how resilient and robust the ISIS oil network had become. Spreadsheets, memos and communications told the coalition details it couldn’t possibly learn from aerial surveillance.

U.S. intelligence agencies combed through the Abu Sayyaf intel throughout the summer of 2015. They learned that ISOC repair teams were reliable, fast and surprisingly clever. It was true ISIS had largely given up on the refining sector by 2015 but ISOC was still pumping oil to satisfy demand from civilians who refined oil in their backyards to make a living. Because producing assets were not systematically targeted, ISOC pumped oil with very few glitches. Moreover, the coalition learned from ISOC personnel files that many of the field operators had in fact pledged allegiance to ISIS Caliph Abu Bakr al-Baghdadi. Faced with the facts, U.S. officials committed to a new and aggressive campaign.

They dubbed it Tidal Wave II. It began on October 21, 2015, just over one year after the first strikes hit ISIS refineries. The target list was expanded to include oil wells and the truck fleet which made the trade possible.

air strikes isis oil 2

Tidal Wave II started with a bang. As I wrote in November 2015 for the Fuse: the mission represented “a massive escalation in terms of both the volume of strikes and the variety of targets now being hit. Whereas before, the coalition typically hit a few targets a week (mostly oil in storage and ISIS-controlled refineries), today’s airstrikes are hitting several targets on an almost daily basis. Weak and critical points in the supply chain are now in the coalition’s crosshairs.” A total of 401 oil trucks were hit in the last two months of 2015. More often, the U.S. started hitting “weak points” such as oil and gas separation plants and truck loading platforms.

Whereas before, the coalition typically hit a few targets a week (mostly oil in storage and ISIS-controlled refineries), today’s airstrikes are hitting several targets on an almost daily basis.

Yet it wasn’t until mid-2016 that the campaign really hit its stride—entering what we might call phase two of Tidal Wave II. In June, the Pentagon announced that it had hit the ISIS oil ministry in Mosul. That same month the U.S. began its sustained, systematic attacks on ISIS oil production and distribution, rather than refineries or oil in storage; the U.S. started relentlessly targeting oil wells and trucks by the dozens. In the last six months of 2016, the Pentagon hit 290 oil wells and 878 oil trucks. (Abu Sayyaf’s own notes tell us he died with 253 oil wells under his control, meaning most if not all have probably been hit more than once by now.)

air strikes isis oil 3

Things could still get worse for ISIS. The group will be a top priority for President Donald Trump, who was fixated on ISIS oil throughout his campaign. It’s also worth noting that the Pentagon seems to be getting more creative, now that it’s had two years to study and dissect the network. Lately strikes have been reported against oil flow pits, where ISOC channels oil into pools because it can’t control the flow otherwise. A December 31 report by Joby Warrick revealed that the U.S. is now attacking underground oil infrastructure (e.g. well casings), thus making repairs infinitely more difficult.

A December 31 report by Joby Warrick revealed that the U.S. is now attacking underground oil infrastructure (e.g. well casings), thus making repairs infinitely more difficult.

Most surprising is that the U.S. is now attacking the civilian-run backyard refineries which sprang up by the hundreds—if not thousands—over the last two years. (See satellite pictures here.) These were off-limits for a long time, just like the trucks that hauled ISIS oil. So far this year, however, the U.S. has destroyed at least 115 basic crude stills when there was already some evidence suggesting that the backyard refining business is drying up.

It’s telling that these targets are now in the crosshairs. ISOC for a time was an integrated oil company: it controlled the resource from the moment it reached the surface until it was sold to a customer. Now the U.S. is following the same model. It’s attacking every point along the supply chain from the wellhead to the customer.

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