It is no coincidence that ISIS is using the oil fields and pipelines it captured in Iraq and Syria to sell crude oil for the purpose of funding its activities, according to a report in Istanbul’s Daily Sabah, dated July 10, 2014.

In the report, Erdal Tanas Karagöl, economy director at the Ankara-based non-profit SETA Foundation for Political, Economic and Social Research, says the group’s intention is clearly to capture oil resources in order to pay for the creation of its own state in Iraq.

Dr. Fahrettin Sümer, from the American University of Iraq based in the Kurdish city of Sulaimaniyah, believes ISIS is moving towards establishing a system “with state-like functions in the territories that they control.” He said that in order to fulfill such functions the militants need revenues, and oil and gas in Iraq are the easiest source. “ISIS will try to take control of as many more oil fields as possible before they are stopped,” he added.

m2An article published on asserts that ISIS has been smuggling increasing amounts of crude oil that it scavenged from Iraq’s stricken oil infrastructure to buyers in the Kurdistan region, earning an estimated $1 million per day.

Tugce Varol Sevim, an associate professor at Istanbul’s Uskudar University, said ISIS has specialists in Iraq’s and Syria’s energy sources and possess intelligence as to the location of the oil fields. “ISIS had moved into Mosul because it had failed to hold oil fields in Syria due to the presence of Russian companies, she said, pointing out that Iraqi oil fields were easier targets,” the report explained.

“If we suppose that Iraq will be divided into three among the Kurdish region, Shia-dominated central government and ISIS-led Sunni state, all three will face battles to own more energy sources in the future,” Karagöl said, adding that ISIS’s steady march towards the south proves that it is seeking to play a greater role in energy affairs.

In a June 17 telephone conversation with Oil & Gas 360®, Raymond James Managing Director Marshall Adkins commented that he believed Brent crude prices could go as high as $130-$150 per barrel if hostilities in Iraq lead to supply interruptions, but impact on world oil prices would be limited if Iraq’s oil changes hands but continues flowing.

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