In his prime-time speech Wednesday night, President Obama outlined how he plans to attack the terrorist group ISIS militarily. But he said less about economic sanctions against ISIS. So the question remains: can the U.S. punish ISIS economically?
Cash gushes into ISIS from lots of places: international donors, extortion from people in places it controls and black market oil sales. ISIS gets the oil from fields it captured in Iraq and Syria. So, one way to attack their finances would be to just go after that territory.
“[In Iraq] a number of oilfields were actually recaptured by the Iraqi army or Kurdish forces,” says Robin Mills with Manaar Energy in Dubai, “and that obviously is the most direct way of preventing ISIS obtaining oil and selling oil.”
Otherwise, your chances of closing the ISIS oil spigot are pretty limited. After it’s pumped, Mills says the oil is trucked over the mountains to Turkey, where it melts away into a vast black oil market. But what about finding ISIS’s rich donors, and hitting them with penalties and sanctions? Turns out, the ISIS benefactors are very hard to find.
“I think it’s much more unclear who these people are, how they operate, where any assets they have might be,” says Adam Slater, a senior economist at Oxford Economics.
Here’s the other thing: ISIS is frugal. It doesn’t need much money to function.
“They’re not buying equipment, they’re seizing equipment,” says Ben Connable, an international policy analyst at the Rand Corporation. “They’re not hiring people at high salaries. They’re purposefully hiring people at relatively low salaries.”
So even if the U.S. did have clear, effective ways of cutting off the money, Connable says ISIS could still survive for a long time.
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