Baghdad: The Islamic State rakes in up to USD 50 million a month from selling crude from oilfields under its control in Iraq and Syria, part of a well-run industry that US diplomacy and airstrikes have so far failed to shut down, according to Iraqi intelligence and US officials.
Oil sales the extremists' largest single source of continual income are a key reason they have been able to maintain their rule over their self-declared "caliphate" stretching across large parts of Syria and Iraq.
With the funds to rebuild infrastructure and provide the largesse that shore up its fighters' loyalty, it has been able to withstand ground fighting against its opponents and more than a year of bombardment in the US-led air campaign.
The group has even been able to bring in equipment and technical experts from abroad to keep the industry running, and the United States has recently stepped up efforts to close off this support.
Washington has been talking to regional governments, including Turkey, about its concerns over the importing of energy infrastructure into IS-run territory in Syria, including equipment for extraction, refinement, transport and energy production, according to a senior US official with firsthand knowledge of the IS oil sector.
Speaking to The Associated Press in Washington, he said international actors in the region were intentionally or unintentionally aiding this effort and called IS' management of its oil fields "increasingly sophisticated," something that has helped the group slow down the degradation of its infrastructure from US bombing raids.
He spoke on condition of anonymity because he was not authorized to talk to the press.
IS sells the crude to smugglers for discounted prices, sometimes USD 35 per barrel but as low as USD 10 a barrel in some cases, compared to just under USD 50 a barrel on international markets, four Iraqi intelligence officials told the AP in separate interviews.
The smugglers in turn sell to middlemen in Turkey, they said. The oil used to be smuggled in fleets of giant tankers but, fearing airstrikes by the US-led coalition, smaller tankers are being used now.
The Iraqi officials spoke on condition of anonymity because they were not authorised to brief the press.
The Islamic State group is believed to be extracting about
30,000 barrels per day from Syria, smuggled to middlemen in neighboring Turkey.
In Iraq, they produce around 10,000-20,000 barrels per day, mostly from two oilfields outside Mosul, Ibrahim Bahr al-Oloum, a member of Iraq's parliamentary energy committee and a former oil minister, told the AP.