How Jihadists Exploit Local Markets to Fund Their Wars

The U.S. continues to make headway in targeting ISIS sources of revenue.

Recently leaders of the Inherent Resolve coalition announced that four ISIS leaders were killed in targeted strikes, all with connections to the group ’s illicit “Oil and Gas Network.” The report reads in part: “Abu Khattab al-Iraqi, the network’s leader, managed revenue generation through the illicit sale of oil and gas. The other three men killed, Abu Yusuf al-Hashimi, Abu Hajir Milhim, and Abu Hiba al-Maghrebi facilitated these operations. According to the Joint Task Force “The death of these Daesh members hinders the terrorist group’s ability to finance operations throughout Iraq and Syria. With the removal of this network, the ability to pay fighters, procure weapons, and maintain equipment will be degraded.” This incident was only the latest in a relatively long-standing objective to deny ISIS access to reliable funding.

For years policymakers understood that oil is the black gold that funds ISIS’ black flag. As Islamic State won more territory, it was able to increase its oil assets as well. When groups pushed through northern Iraq five years ago, eventually taking Mosul, it seized numerous fields including the Ajil and Allas fields in north-eastern Iraq’s Kirkuk province. When President Obama launched the international coalition to fight ISIS, hundreds of bombing missions were directed just toward oil infrastructure.

After Daesh lost most of its holdings in Iraq last year, one would have thought the group would be unable to continue profiting from oil in the region. However, ISIS found a way to continue exploiting local, financially desperate workers to continue the production and delivery of oil. Even though militants technically no longer controlled the territory, they were still able to siphon off oil production and sell it to black market buyers. Thus the ISIS leaders that run this illegal network, like the ones recently eliminated, have become prime targets of the coalition. However, the highly profitable, terror-funding oil smuggling continues.

The campaign to undo ISIS’s oil network is reminiscent of a similar operation the U.S. has undertaken in Afghanistan. Back in November of last year, U.S. military sources reported the beginning of bombing campaigns targeting Taliban run opium production facilities throughout Afghanistan. As Army Gen. John W. Nicholson Jr., the top U.S. commander in Afghanistan told media sources, the bombings were the implementation of new powers granted to the president which allow him to target Taliban revenue streams in addition to actual fighters and military assets.

The continued efforts in both the Middle East and Afghanistan to destroy jihadist business infrastructure, highlights the important realization policymakers have stumbled upon recently: the only effective way to permanently quash militants, wherever they may be, is to dry up their sources of revenue.

The challenge in this effort is not only locating the people and facilities involved in these enterprises but also not to affect legitimate business assets of the civilian population in the process. That’s why part of America’s effort to crack down on militant enterprise has included the broader plan of introducing alternative industries to these countries. In Afghanistan for instance, there has been a $34 million initiative to encourage soybean production inside the country as a replacement for the opium industry.

Understanding the interlocked complex factors at play that allow militant groups to continue operating gives some insight into why these fights are long-term endeavors. With any luck, this double-pronged effort of targeting extremist-linked markets and installing alternative economic options will be an important factor in bringing about stability to these war-torn countries.    

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