The U.S. and its allies bombed 12 “modular” refineries in territory controlled by ISIS on Wednesday. The terror group is considered well-funded, in part because of oil revenue. But Middle East analysts say the refineries are unsophisticated, not unlike homemade moonshine operations.
“These refineries are so rudimentary,” says analyst Shwan Zulal of Carduchi Consulting in London. “It’s almost like distilling your alcohol at home. They get these big barrels and they just burn the petrol underneath it to get it distilled. You can make a new refinery in a week.”
Zulal says private citizens – often a couple of guys – own the refineries, not ISIS. ISIS makes money by selling crude oil to these refiners. And the group needs the refined product — say diesel for Humvees, or kerosene for lamps.
The air campaign is meant to dent ISIS finances. But for now, a dozen refineries may be trivial.
“I think it’s really 1 percent of the volume that goes through their hands every day,” says Valerie Marcel of the Chatham House think tank in London. “So the U.S. and the coalition will need to bomb relentlessly for a sustained impact on the revenue generation.”
One argument in favor of the strategy: There’s little downside. Homemade refineries are often in remote areas, far from potential civilian casualties.
By contrast, targeting oil fields controlled by ISIS carries more risk.
“If people got concerned that, ‘Oh, what does that mean? We’re bombing crude-oil-producing wells in the Middle East,’ the market itself might be concerned,” says Mark Routt at KBC Technologies in Houston. “Which would raise the price of crude, which would raise the price of gasoline for everyone around the world. So this is very clearly a thought-through strategy to minimize the market impact while still achieving the stated aims of degrading this group.”
By all accounts, degrading ISIS will take more than going after oil assets. The group is known to make money taking hostages for ransom, extorting traders and farmers and selling stolen antiquities.
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