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A Look Inside Islamic State Oil Production

3 MINS READJul 7, 2016 | 09:15 GMT

Oil production is a crucial source of income for the Islamic State. As of March, it accounted for nearly half of the group's total revenue, bringing in roughly $20 million each month. Beyond providing funds, oil refining is also a much-needed logistical boon: The Islamic State can only gain access to the refined fuel products that power vehicles and generators through smuggling or local production. Given the advantages oil production can bring, it is no surprise that the U.S.-led coalition has been trying to disrupt the jihadists' energy-related activities. But targeting the group's refineries is more difficult than one might think. Satellite imagery obtained from Stratfor's partners at AllSource Analysis helps to explain why.

The photographs, taken in April 2015 and June 2016, show hundreds of oil refineries controlled by the Islamic State near the Iraqi town of Addayah, about 35 kilometers (22 miles) southwest of Mosul. Constructed between February and April of last year, the refineries are makeshift in nature, equipped with only basic infrastructure such as rudimentary furnaces and water-filled trenches. The sites' lack of sophistication allows them to be easily rebuilt in the event that they are destroyed. Because the temporary refineries are also relatively spread out, it is difficult for the Islamic State's enemies to significantly impede its oil production process with a few concentrated strikes. Moreover, most of the refineries' workers are not directly affiliated with the Islamic State. Instead, the group often provides operating licenses to locals in exchange for taxes on output. Surrounding communities rely heavily on much of the oil that is produced in the refineries; halting production or destroying the sites completely could have grave consequences for the civilians living in territories under the Islamic State's control.

Despite these constraints, the U.S.-led coalition has launched an aggressive campaign against the Islamic State's revenue streams, including its oil-refining operations. Having improved its intelligence-gathering process, the coalition has carried out numerous airstrikes against some of the group's biggest refineries. The United States has also destroyed several of the Islamic State's large cash depositories in cities such as Mosul, depriving the extremist group of millions of dollars that it could have otherwise used to pay fighters and workers. The Islamic State's tanker convoys have come under siege too, though U.S. forces often warn drivers away with leaflets before attacking the trucks. The tankers have proved to be one of the weakest links in the group's oil production chain, since they are much more difficult and costly to replace than the makeshift refineries.

Altogether, these efforts have made a noticeable dent in the Islamic State's finances. According to Pentagon officials, the group's oil production has declined by 30 percent and its oil revenues have been cut in half. However, halting the Islamic State's exploitation of oil entirely will be next to impossible. As long as the group maintains its grip on Iraqi and Syrian oil fields, its efforts to extract and refine oil will continue as well.

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