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Bombing the Islamic State’s Oil Isn't the Slam Dunk You Might Expect It to Be

The US-led coalition is targeting the Islamic State's oil infrastructure in an effort to cut off its revenue streams. But for the eight million civilians living under IS control, the effort could make for a very cold winter.
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Tim Ramadan lives in the Syrian city of Deir Ezzor, just 90 miles southeast of Raqqa, the self-declared capital of the Islamic State terror insurgency (IS). Deir Ezzor lies in the heart of the most productive oil fields under the group's control. Over the past week, Ramadan has watched the cost of heating oil shoot through the roof as Western fighter jets pound the infrastructure around him.

"It's been crazy," he said.

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Ramadan is no fan of IS. He's an active member of the underground opposition network Raqqa Is Being Slaughtered Silently, and uses a pseudonym to protect his identity. He's also quite supportive of the international bombing campaign against the radical militants."Anything to upset Daesh," he said, using an Arabic acronym to refer to the group, which is also known as ISIS or ISIL.

But he's also concerned that attacks against oil sites controlled by IS will further decimate a local economy that's already a shambles.

"Civilians will not be able to buy fuel this winter," he said. "It's already very, very cold."

Related: Call It ISIS, ISIL, or Daesh — the Islamic State Still Wants to Kill You

VICE News asked him to track fuel prices and he reported a massive spike over the past week.

"In the past seven days, we've seen a barrel [of heating oil] go from 20,000 to 65,000 Syrian pounds," he said — an increase of roughly $50 to $170 at the black market exchange rate.

Though VICE could not independently verify the price shift, David Butter, a Middle East energy expert at Chatham House, said that the figures made sense within the context of the local market.

"Fuel is getting more and more scarce," he said.

Since IS operatives attacked Paris last week, killing 129 people and injuring scores of others, the US has stepped up its strikes on the organization's oil assets in an effort to cripple its finances. On Monday, US-led coalition warplanes destroyed 116 fuel tankers loaded up with Syrian crude outside al-Bukamal, a city in the east of Deir Ezzor province. Just 45 minutes before launching the strikes, the coalition dropped leaflets telling the civilians driving the trucks to "run." On Friday, coalition aircraft bombed a major IS-held oil refinery in the Iraqi city of Qayyarah.

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Though the bombing campaign is designed to cut off IS oil revenues, it could have a devastating effect on the civilian population.

"I believe the assumption that all aspects of the oil industry are affiliated with IS is mistaken," said Aymenn Tamimi, a Syrian researcher and fellow at the Middle East Forum who tracks life inside IS territory. "The impact may not be so much crippling IS financially as causing a humanitarian crisis with the onset of the winter."

The US-led coalition is waging the most devastating assault on the insurgency's oil infrastructure since it started its campaign of airstrikes over a year ago. Even before the attacks in Paris, the Pentagon announced on October 21 it had launched a new operation, "Tidal Wave II," that aimed to focus strikes more precisely on oil.

On Thursday, US Defense Secretary Ash Carter acknowledged that this new operation reflects a shift in the military's thinking.

"We're prepared to change rules of engagement; we've changed tactics, as we just did in the case of the fuel trucks," Carter told MSNBC, referring to the tankers outside al-Bukamal.

Related: How the West Could Actually Defeat the Islamic State

Colonel Steven Warren, a Pentagon spokesperson, clarified to VICE News that the truck bombings did not signal an official shift in the rules of engagement shift. "Only a change in tactics," he said.

Russia is also targeting IS oil. On Friday, the Russian Defense Ministry announced that it had destroyed 15 oil refining and storage facilities and exploded 525 trucks carrying oil during this week alone.

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David Butter explained that in the wake of the devastating terror attacks in Paris, politicians in Washington, Paris, and Moscow are desperate to look like they are taking substantial action against IS.

"A lot them are saying, 'What the fuck's going on here?' " he said. "People are starting to wake up and say, 'Hey, I thought we were making sure these guys aren't making any money from oil.' "

It's true that, until now, the US has largely refrained from decimating IS oil assets despite hitting the group with heavy bombing for over a year. While the latest numbers out of the Pentagon show 196 airstrikes against some form of IS oil infrastructure since the bombing campaign began, most of those strikes were ineffective.

"In many cases… [within] 24, 48, 72 hours, the enemy has managed to repair that piece of infrastructure," Warren noted.

That's because the US appears to have been selecting such targets with a modicum of care, choosing to strike some oil facilities under IS control while sparing local traders and businesspeople.

"The oil infrastructure is something that the civilian population benefits from," Carter explained on Thursday. "You don't want to punish people."

Lieutenant General Charles Brown, the US Air Forces Central Command chief who directs coalition airstrikes, expressed this sentiment earlier this month.

"Part of our coalition's [goal] is to minimize civilian casualties," Brown told reporters in Dubai. "Part of this is getting the population to decide who is on their side, the insurgency or the coalition. And if we just start wiping out civilians, there is potential there that they go differently."

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Related: Russian Heavy Bombers Are Hammering Syria — and It's Practice for Bigger Fights

The United Nations estimates that around 8 million civilians live in territory controlled by IS. Indeed, many IS fighters are not Syrian locals but foreigners who are viewed as an occupying force in the areas they control.

Tamimi, the Middle East Forum fellow, said that the division between the IS oil economy and the economy that those 8 million civilians depend on for survival is not always clear.

"We don't appear to be making distinctions between who is or isn't affiliated with the Islamic State in the oil industry," he said. While IS requires the direct investors or operators of fields to have pledged allegiance to the insurgency, he noted, "those buying the oil and refining and/or transporting it for delivery need not have."

The decision to ramp up attacks came just two weeks after the Financial Times published a report that estimates the group brings in an average of $1.5 million a day from oil production — working out to more than $500 million a year. That's the same dollar amount that the US Treasury Department, which is responsible for tracking IS funding sources, often refers to. The figure has led many observers — including Republican presidential frontrunner Donald Trump — to argue that the best way to bleed IS is to bomb its oil fields, the vast majority of which are in eastern Syria.

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But, since the group moves its product on the black market, it's nearly impossible to be sure how much IS takes in, and how much damage coalition airstrikes would inflict.

Tamimi has long warned against overestimating the insurgency's reliance on oil revenue, pointing out that this is not supported by the group's own internal calculations. Tamimi is stationed in Turkey along the Syrian border, where he collects all the internal IS documents he can get his hands on. In early October, he discovered an internal IS budget document from Deir Ezzor province, where most of the strikes against IS oil assets are now concentrated. It showed that this oil-rich region, which the US military says provides IS with two-thirds of its oil revenue, brings in just $66,000 a day from crude. That's nothing compared to the $1.5 million figure floated by the Financial Times.

The confusion, Tamimi said, is between revenues (the total amount of economic activity generated by the oil market ) — and profits (how much IS pockets at the end of the day). "$1.5 million a day is a net revenue figure and they had no way to be sure of how much of that estimate was going to IS coffers." Tamimi explains. The leaked budget suggests that IS is pocketing some small portion of the revenues while the rest is ricocheting around the local economy. What IS makes in the course of pillaging, taxing, and confiscating from the people and institutions under its thumb dwarfs its oil operation.

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"People often forget that oil in Syria is a small, small business," Butter, the energy expert at Chatham, said. IS only has one major oil refinery under its control, and it is located nearly 340 miles from its main oil fields. Those fields peaked decades ago, and would require millions of dollars in investment to operate at full capacity. Most of the fuel is consumed locally or sold to entrepreneurs who turn a profit by smuggling it outside of IS territory.

When VICE News asked the Pentagon what, if anything, could be done to help civilians in IS territory make it through the winter, US Central Command sent a statement suggesting that there is little it can do to alleviate the suffering of civilians as long as these areas are under IS control.

"We believe that by cutting off the oil supply, we can hasten the destruction of ISIL once and for all and bring some sense of normalcy back to the people there. We are also applying rigorous measures to ensure the safety of Syrian citizens during our operations — a concern ISIL completely ignores," the statement said. "We believe the swift destruction of ISIL and ending the civil war in Syria are the two key components to improving the humanitarian situation in Syria. This would include any and all humanitarian aid efforts to assist the Syrian citizens."

The Defense Department will offer no further comment on efforts to alleviate the humanitarian impact of its fight against IS. But the campaign will take time, and the welfare of those within the insurgency's grip risks growing ever more precarious in the meanwhile.

"It's a serious question mark — what's going to happen in terms of getting fuel for civilians?" Butter said. "We need to recognize that an important source of life is being cut off."

Follow Avi Asher-Schapiro on Twitter: @AASchapiro