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leveymg

(36,418 posts) Sat Feb 7, 2015, 10:42 AM Feb 2015

As UN Security Council Mulls ISIS Oil Sanctions, Most Funds Still Flow from Saudi and Gulf Donors

Last edited Sat Feb 7, 2015, 03:32 PM - Edit history (10)

Proposed UN Sanctions Do Not Go To Most ISIS Funding from Wealthy Donors

There is broad agreement that "substantial" funds are still reaching ISIS from wealthy elites in Saudi Arabia, Qatar and other Gulf states. As the Pentagon announced yesterday, oil exports now do not account for most of ISIS finances. ISIS is instead depending on donations, “a lot of donations,” according to Rear Admiral John Kirby, spokesman for the Joint Chiefs of Staff.

Further sanctions do not threaten the primary source of finance for the so-called Islamic State (IS), reported to be in excess of $2 billion last year. On Thursday, a UN measure was proposed by Russia that would sanction the trade in oil and stolen antiquities that partially funds ISIS funders. However, according to the NYT, it does not add to the existing list of individuals named for sanctions. http://www.nytimes.com/2015/02/07/world/middleeast/un-prepares-resolution-to-confront-islamic-state-on-oil-and-antiquities.html?_r=0

This spares the US and NATO the difficult task of having to immediately punish most of the same Sunni states with which it has been previously cooperating in prosecuting the war in Syria. The measure discussed on Friday would, however, specifically sanction parties engaged in smuggling oil from ISIS controlled areas, paying ransom, and the sale of stolen antiquities, the latter valued at $35 million last year.

Nobody seems to want to put a finger on exactly how much cash is still flowing to ISIS from wealthy ISIS funders, and who exactly they are. But, everyone agrees that support from the Saudis and Gulf elites continues to be substantial. See, http://www.nbcnews.com/storyline/isis-terror/whos-funding-isis-wealthy-gulf-angel-investors-officials-say-n208006

In 2014, Saudi Arabia publicly agreed to clamp down on some donations from its citizens and religious foundations. As a result, most private funding now goes through Qatar. The UN Security Council Resolution 2170 passed last August 15 named only six individual ISIS leaders for direct sanctions. The new measure does not expand that list, but calls for a committee to nominate others for violation of existing UN resolutions.

The effects of the additional sanctions on oil exports proposed would have its primary impact on crude oil smuggling in and out of Turkey. The majority of ISIS oil revenues are derived through the black market in that country. Last June, at its height, a Turkish opposition MP and other sources estimated the annual oil revenues at $800 million. http://thehill.com/policy/energy-environment/221272-report-isis-oil-production-worth-800m-per-year

If accurate, oil sales was about 40% of the total ISIS operating budget as stated by the group. However, even at its height, petroleum accounted for only a fraction of ISIS funding. Some western estimates placed the IS annual total budget as high as $3 billion. See, http://thehill.com/policy/defense/228465-isis-puts-payments-to-poor-disabled-in-2-billion-budget; http://www.ibtimes.co.uk/isis-news-caliphate-unveils-first-annual-budget-2bn-250m-surplus-war-chest-1481931

The $800 million figure is actually at the top end of the estimates. US sources quoted by CNN last October stated that ISIS oil income was more likely half that figure: http://www.cnn.com/2014/10/06/world/meast/isis-funding/

The U.S. Treasury Department does not have hard figures that it can make public on the group's wealth but says it believes ISIS takes in millions of dollars a month.

Sources familiar with the subject say that ISIS' "burn' rate" -- how much the group spends -- is huge, including salaries, weapons and other expenses. For ISIS' oil sales, sources told CNN, the group probably makes between $1 million and $2 million per day, but probably on the lower end.

Along with everyone else, the returns on ISIS oil are probably a fraction of what they were at the height of world oil prices a year ago. Plus, the US and allies are bombing the group's oil platforms and vehicles. That has cut production and export to the point where US commanders now acknowledged that oil sales aren't the source of most ISIS funds, and that they are coming from donations, "a lot of donations":

The Islamic State of Iraq and Syria (ISIS) is no longer relying on oil as its main source of revenue to fund its terrorist activity, according to the Pentagon.

“We know that oil revenue is no longer the lead source of their income in dollars,” Pentagon spokesperson Rear Admiral John Kirby told reporters during a press briefing on Tuesday.

ISIS’ loss of income is compounded by its losses on the battlefield as the group has “lost literally hundreds and hundreds of vehicles that they can’t replace,” Kirby said.

“They’ve got to steal whatever they want to get, and there’s a finite number.”

ISIS is instead depending on “a lot of donations” as one of the main sources of income. “They also have a significant black market program going on,” Kirby said.

http://english.alarabiya.net/en/News/middle-east/2015/02/05/Pentagon-oil-is-no-longer-ISIS-main-source-of-income-.html

That leaves a big hole in the Caliphate's budget - that gets filled by someone.

Imposition of expanded UN sanctions would entail difficulties and costs for the US, particularly with Saudi Arabia. Therefore, it should not come as a surprise that the Security Counsel measure is limited, and does not yet show if the world is truly serious about eradicating ISIS.