The Islamic State of Iraq and Syria (ISIS) began to take over oil fields in late spring 2014. Since then, ISIS has expanded its operations by creating a loosely integrated and thriving black economy, consisting of approximately sixty percent of Syria’s oil assets and seven oil producing assets in Iraq. The terrorist organisation has also managed to set up an extensive network of middlemen in neighbouring territories and countries, with the aim of trading crude oil for cash and in kind. Upon extraction, the commodity is first lightly refined on site and then a shadow supply-chain network takes over, to bring it to the market.
Are there any oil terminals in the South-East Mediterranean Sea used by ISIS and its shadow network as export gateways for smuggled crude? We answer this question by tapping into the proxy indicator of tanker charter rates. First, we look at the map for crude oil loading terminals that geographically fall within, or border the sphere of ISIS control. Second, for the ‘suspect’ terminals we take a closer look at the charter rates of tankers over a period of years, seeking to establish patterns. Third, looking for ‘suspect’ pattern- breaking charter rates, we narrow the time-frame down to the period from July 2014, when ISIS started off its smuggling operations, until mid-February 2015.
We conclude by offering remarks on the illicit trade, while providing insights into the criminal practices of ISIS
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