Research Paper: Turkey-ISIS Oil Trade

12/15/2015 11:31 am ET | Updated Dec 15, 2015
  • David L. Phillips Director of the Program on Peace-building and Rights, Columbia University’s Institute for the Study of Human Rights

Introduction

The sale of oil products by ISIS garners about $500 million/year. The US led multinational coalition has pledged to destroy ISIS. Its strategy includes depriving ISIS of financial support. Allegations abound that Turks are engaged in oil trade with ISIS. Additionally, President Recep Tayyip Erdogan and his family are allegedly implicated. Erdogan takes these charges seriously. He promised "to vacate his post of Turkey's presidency if the claims are substantiated by concrete evidence."

The Program on Peace-building and Rights at Columbia University's Institute for the Study of Human Rights appointed a team of researchers in the United States, Europe, and Turkey to investigate the allegations. Researchers focus on secondary media sources. This research paper cites relevant reports.

Smugglers transport oil using a variety of means, generating significant revenues for ISIS. Smuggled oil finds its way into Turkey's export facilities and onto tankers in Ceyhan bound for international markets. There is no "smoking gun" linking the Government of Turkey or Erdogan directly to ISIS oil sales. It is apparent, however, that Turkey turned a blind eye to ISIS oil trade. Turkey failed to seal its border, facilitating ISIS oil exports. Turks have profited at stages of the supply chain.

Transport Trends

Article: "ISIS Export Gateway to Global Crude Oil Markets"
Publication: London Shipping Law Centre, Maritime Business Forum
Date: March 12, 2015

George Kiourktsoglou (Visiting Lecturer, University of Greenwich, London) and Dr. Alec D. Coutroubis (Principal Lecturer, University of Greenwich, London) provide the most extensive account of the ISIS oil industry and potential links to Turkey. ISIS began taking over oil fields in late spring 2014. Since then, ISIS has expanded its operations by creating a loosely integrated and thriving underground economy, consisting of approximately sixty percent of Syria's oil assets and seven oil producing facilities in Iraq.

ISIS has set up an extensive network of middlemen in neighboring territories and countries, with the aim of trading crude oil for cash and in kind. Upon extraction, oil is first lightly refined on site and then a supply-chain network brings it to the market. The supply chain comprises the following localities in Turkey: Sanliura, Urfa, Hakkari, Siirt, Batman, Osmaniya, Gaziantep, Sirnak, Adana, Kahramarmaras, Adiyaman and Mardin. The string of trading hubs ends up in Adana, home to the major tanker shipping port of Ceyhan on the Eastern Mediterranean. The terminal is operated by Botas International Limited (BIL), a Turkish state company.

The authors examine tanker charter rates, in order to establish transport patterns. They look at the map for crude oil loading terminals that geographically fall within, or border the sphere of ISIS control, over a period of years. They consider deviations in the patters from July 2014, when ISIS started off its smuggling operations, until mid-February 2015. They also consider the integration of ISIS smuggled crude within the global oil markets. A part of ISIS smuggled crude oil is fed into the global oil markets, transported in tankers leaving the port of Ceyhan.

Whenever the Islamic State is fighting in the vicinity of an area hosting oil assets, the exports from Ceyhan promptly spike. Unusual spikes are found from July 10-21, 2014. This spike coincides with the fall of Syria's largest oil field, Al-Omar, to ISIS. Another spike takes place between the end of October and the end of November 2014. It happens at the same time as fighting between ISIS and the Syrian army over the control of the Jhar and Mahr gas fields, as well as the Hayyan gas company in the east of Homs province.

The authors believe that there is active shadow network of crude oil smugglers and traders, who channel ISIS crude to southeast Turkey from northeast Syria and northwest Iraq. The illicit supply chain along Route E90 delivers ISIS crude to Ceyhan.

Smuggler Citings

Article: "Despite U.S.-led campaign, ISIS Rakes in Oil Revenue"
Publication: Associated Press
Date: October 23, 2015

The Islamic State takes in up to $50 million a month from selling crude from oilfields under its control in Iraq and Syria. Washington has been talking to regional governments, including Turkey, about its concerns over the export of energy infrastructure into ISIS-controlled territory in Syria (e.g. equipment for extraction, refinement, transport and energy production). ISIS management of its oil fields is "increasingly sophisticated," with assistance from international actors in the region. According to Iraqi intelligence officials, ISIS sells the crude to smugglers who in turn sell to middlemen in Turkey. ISIS is believed to be extracting about 30,000 barrels per day from Syria, smuggled to middlemen in neighboring Turkey. This amount is augmented by up 20,000 barrels per day, mostly from two oilfields outside Mosul. The ISIS "finance ministry" puts at 253 the number of oil wells under ISIS control in Syria. Of these, 161 of them were operational, benefitting from production equipment originating in neighboring countries including Turkey.

Article: "IŞİD petrolü üç güzergahtan Türkiye'ye gidiyor"
Publication: Cumhuriyet
Date: December 2, 2015

ISIS oil is transported to Turkey via multiple routes. Oil from the Raqqa region is transported via the northwest route. A satellite image of the motorway at Azzaz Shows 240 trucks waiting on the Turkish side of border, and 46 trucks on Syrian side of border (13-11-2015). Trucks travel to Dortyol and Iskenderun Port. Satellite images of Deir Ez-Zor show hundreds of tankers carrying oil to towards Qamishli (18-10-2015). After entering Turkey, oil is sent to the "Tupras" refinery in Batman, about 100 kilometers away. Oil is also transported from Syria to Cizre. A satellite image shows 1,104 trucks (14-11-2015).

Article: "Inside Isis Inc: The journey of a barrel of oil"
Publication: Financial Times
Date: October 14, 2015

Smugglers load larger jerry cans (50-60 litres) of oil into metal tubs or small row boats to move cargo across the river and into Turkey. On the other bank, tractors pick up the supply and took it to a local market. Some Syrian and Turkish border towns (e.g. Besalan) have co-operated by burying small rubber tubes under the border. A popular crossing point for smugglers carrying jerry cans of fuel on their backs has been from Kharbet al-Jawz in rebel-held Syria to Guvecci in Turkey.

Article: "Islamic State Financing and US Policy Approaches"
Publication: Congressional Research Service
Date: April 10, 2015

ISIS has no traditional export facilities or access to the open market. As a result, ISIS transports oil by truck to the Turkish border where oil brokers and traders purchase the oil with cash at a steeply discounted price, as low as $18/barrel. Oil sales initially provided the majority of ISIS revenue, but gradually declined due to an extensive campaign of US-led air strikes. The US and Turkey co-chair the Financial Action Task Force, which has studied ISIS revenue streams and recommended measures to prevent cash flow.

Article: "Turkey sends in jets as Syria's agony spills over every border"
Publication: The Guardian
Date: July 25, 2015

The oil-smuggling operation of Abu Sayyaf, an ISIS leader, has been drastically reduced, although tankers still make it to the Syria-Turkey border. According to an ISIS member, "I know of a lot of cooperation... I don't see how Turkey can attack the organisation too hard. There are shared interests."

Article: "Raqqa's Rockefellers: How Islamic State oil flows to Israel"
Publication: Al-Araby al-Jadeed
Date: November 26, 2015

ISIS oil exports are managed by a colonel in the Iraqi Intelligence Services. He indicated, "After the oil is extracted and loaded, the oil tankers leave Nineveh province and head north to the city of Zakho, 88 kilometers north of Mosul. After IS oil lorries arrive in Zakho - normally 70 to 100 of them at a time - they are met by oil smuggling mafias. The person in charge of the oil shipment sells the oil to the highest bidder. Once in Turkey, the lorries continue to the town of Silopi, where the oil is delivered to a person who goes by the aliases of Dr Farid, Hajji Farid and Uncle Farid."

Article: "ISIS Oil Trade Full Frontal: "Raqqa's Rockefellers", Bilal Erdogan, KRG Crude, And The Israel Connection"
Publication: Zero Hedge
Date: November 29, 2015

Vladimir Putin detailed the scope of the operation in meetings with his G20 colleagues. "I've shown photos taken from space and from aircraft which clearly demonstrate the scale of the illegal trade in oil and petroleum products," he told journalists on the sidelines of the G20 summit in Antalya. The very same day, the US destroyed some 116 ISIS oil trucks, an effort that was widely publicized in the Western media. In the two weeks since Russia's revelations, Moscow and Washington have destroyed 1,300 ISIS oil transport vehicles.

Article: "Mevzuattan çıktı... Erdoğan zorda! İşte IŞİD petrolüne belge"
Publication: Gazeteciler
Date: December 4, 2015

Turkey amended its transport, trade and custom policy in June 2014. Regulations govern the "transiting of raw Petrol and Fuel via Turkey by road or railways." (Approved by Ministry of Trade and Customs on June 24, 2014, item no. 1208098). The Reyhanli border gate is not officially used for trade of oil products. However, the Russian Ministry of Defense provided satellite imagery of oil tankers crossing at Reyhanli.

Article: "Iran: Elimizde IŞİD'den Türkiye'ye petrol sevkiyatının kanıtları var"
Publication: Rota Haber
Date: December 4, 2015

Iran says it has proof of oil smuggling from ISIS to Turkey. Iran's Secretary of the Expediency Discernment Council, Mohsen Rezaei, says the government has photographs of truck tankers bringing ISIS oil to Turkey. Rezaei is quoted, "If Turkish government does not have information of the oil trade in the country, we are willing to give it to them."

Article: "German deputy speaker: NATO must stop Turkey support for ISIS"
Publication: Rudaw
Date: October 12, 2014

According to Claudia Roth, deputy speaker of the Bundestag and a Green Party MP, Erdogan's "dealings with the ISIS are unacceptable. Also that the ISIS has been able to sell its oil via Turkey is extraordinary."

Article: "Turkey Launches Crackdown On Oil Smugglers Feeding ISIS"
Publication: Huffington Post
Date: June 12, 2014

Smuggled fuel came from oil wells in Iraq or Syria controlled by militants, including ISIS, and was sold to middlemen who smuggled it across the 900-kilometer Turkish-Syrian border. Analysts estimate that the Islamic State group gets up to $3 million a day in revenue from oil fields seized in Iraq and Syria. Western intelligence officials have alleged that Turkey is turning a blind eye to a flourishing trade that strengthens ISIS, and Secretary of State John Kerry has called on Turkey to do more to stem the trade. Oil smuggling was a booming business until about six months ago, when Turkish authorities cracked down in response to media reports. New checkpoints and border controls were set-up in Hatay Province. Turkey says it seized nearly 20 million liters of oil at the border in the first eight months of 2015, about four times as much as in the same period the year before.

Article: "How ISIS Uses Oil to Fund Terror"
Publication: Huffington Post
Date: September 19, 2014

There are about 8 million people living in ISIS-controlled territory who desperately need fuel and energy supplies. ISIS crude oil is either refined in small facilities or exchanged across the border -- mostly in Turkey -- for refined oil products. The southern corridor of Turkey has thus become a gateway for oil products and illicit trading. Cross-border trade violates U.N. Security Council resolution 2170 requiring Members States cut the finances of ISIS, Nusra front and other Qaeda splinter groups.

http://www.huffingtonpost.com/2014/09/27/isis-oil_n_5877008.html

Allegations of Turkey's Official Involvement

Article: "CHP'li Altiok ve HDP'li Kürkçü ISID'ten petrol alimini 4 ay önce meclise taşimişti"
Publication: Siyasi Haber
Date: December 3, 2015

CHP İzmir MP Zeynep Altıok HDP İzmir MP Ertuğrul Kürkçü accused Turkey of oil trade with ISIS in the Turkish Grand National Assembly (27-7-2015 and 27-7-2015). They referenced Martin Chulov's article in The Guardian (26-7-2015). Chulov maintains that when Abu Sayyaf was in charge of energy trade for ISIS before he was killed in an air strike on May 15. US Special Forces recovered Sayyaf's computer records confirming that Turkey was the main buyer of oil from ISIS. Chulov is referenced in Birgun newspaper saying that Turkish security forces were protecting the oil trade (28-7-2015).

Article: "Aykut Erdoğdu yolsuzluk bağlantılarını belgeleriyle anlattı"
Publication: Çağdaş Ses
Date: October 21, 2015

CHP MP Aykut Erdoğdu alleged that partner companies of Berat Albayrak, Erdogan's son-in-law, and his brother-in-law, Ziya Ilgen, were involved in the ISIS oil trade (17-12-2014). A court case has been brought against him for "insulting the President."

Article: "Opposition MP says ISIS is selling oil in Turkey"
Publication: Al-Monitor
Date: June 13, 2014

Ali Ediboglu, an opposition MP, said: "$800 million worth of oil that ISIS obtained from regions it occupied this year (the Rumeilan oil fields in northern Syria and most recently Mosul) is being sold in Turkey. They have laid pipes from villages near the Turkish border at Hatay. Similar pipes exist also at the Turkish border regions of Kilis, Urfa and Gaziantep. They transfer the oil to Turkey and sell it at a discount for cash. They refine the oil in areas close to the Turkish border and then sell it via Turkey. This is worth $800 million."

Article: "As Turkey turned blind eye, ISIS took advantage"
Publication: CBS News
Date: September 4, 2014

Hursit Gunes, a member of Turkey's opposition, accuses the Turkish authorities of ignoring oil smuggling by ISIS. "The money they get from smuggling could be stopped if the Turkish government and the neighbor countries had decided that they shouldn't get a coin."

Article: "Ankara's oil business with ISIS"
Publication: RT
Date: November 27, 2015

Last October, the US Under Secretary for Terrorism and Financial Intelligence David Cohen said Islamic State was earning $1 million a day from oil sales. "According to our information, as of last month, ISIL was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transported the oil to be resold. It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey."

Article: "Suspicious Report: "ISIS Selling Oil to Turkey through Qatari Brokers"
Publication: Veterans Today
Date: December 4, 2015

the Arabic-language Al-Akhbar newspaper quoted unnamed sources inside ISIL: "ISIL regularly sells crude it obtains from Iraqi and Syrian oil wells to Turkey through some Qatari middlemen". In some transactions, oil is bartered for weapons.

Article: "Struggling to Starve ISIS of Oil Revenue, U.S. Seeks Assistance From Turkey"
Publication: The New York Times
Date: September 13, 2014

On September 13, 2014, The New York Times reported the Obama administration's efforts to pressure Turkey to crack down on ISIS sales of oil. James Phillips, a senior fellow at the Heritage Foundation, maintained that Turkey has not fully cracked down on ISIS's sales network because it benefits from a lower price for oil, and that there might even be Turks and government officials who benefit from the trade.

Article: "Sınırsız sınır..."
Publication: Radikal
Date: September 13, 2014

Fehim Taştekin wrote in Radikal on September 13, 2014 about illegal pipelines transporting oil from Syria to nearby border towns in Turkey. The oil is sold for as little as 1.25 liras per liter. According to Taştekin, many of these illegal pipelines were dismantled after operating for 3 years, once his article was published.

Article: "ABD Hazine Bakanlığı: IŞİD'in petrol satışına Türkler de aracılık ediyor"
Publication: Diken
Date: October 24, 2015

According to Diken, David Cohen, a Justice Department official, says that Turkish individuals act as middlemen to help sell ISIS oil through Turkey.

Article: "Is Turkey Really Benefitting from Oil Trade with ISIS"
Publication: TIME
Date: December 2, 2015

Analysts say it's very unlikely Ankara has anything to do with ISIS oil. "To go as far to say that Turkey would shoot down a plane to protect its oil supply is unfounded," says Valerie Marcel of Chatham House. Fawaz Gerges, Professor of International Relations in the London School of Economics and Political Science, agrees that the claims amount to a conspiracy theory. "I think it would be very misleading to say there is an unholy alliance with Turkey and the Islamic State," he says. According to TIME, "That's not to say ISIS oil isn't being imported to Turkey. Getrges adds, "ISIS sells to anyone, it's not about ideology."

Article: "Syria conflict: Russia accuses Erdogan of trading oil with IS"
Publication: BBC News
Date: December 2, 2015

Russia's Defense Ministry accused President Erdogan's family members of being involved in the trade of petroleum with ISIS. Deputy Defense Minister Anatoly Antonov said Turkey was the biggest buyer of "stolen" oil from Syria and Iraq. Antonov presented satellite images showing oil tankers travelling from IS-held territory to Turkey. The trucks, travelled to three locations, including refineries, in Turkey. Some oil was sent to a third country. Antonov indicated, "According to available information, the highest level of the political leadership of the country, President Erdogan and his family, are involved in this criminal business."

Article: "Erdogan's son-in-law 'linked to Isis oil trade'"
Publication: The Times
Date: December 5, 2015

An opposition MP claimed this week "that there is a very high probability" that Berat Albayrak, Turkey's energy minister and Erdogan's son-in-law, was linked to the supply of oil by the terrorists.

http://www.thetimes.co.uk/tto/news/world/asia/article4632906.ece?CMP=Spklr-_-Editorial-_-FBPAGE-_-TheTimesandTheSundayTimes-timesandsundaytimes-_-20151205-_-World-_-296171993-_-Imageandlink&linkId=19327838

Article: "Russia accuses Turkish President Erdogan's son-in-law of being 'linked to Isis oil trade'"
Publication: The Independent
Date: December 5, 2015

Berat Albayrak was chief executive of Calik Holding, a pro-government conglomerate with an interest in energy and oil, until 2013. Albayrak also managed Powertrans, a company that trucks oil from Iraqi Kurdistan. Albayrak was targeted as part of a thwarted corruption investigation in December 2013, on allegations of tender-rigging and bribery. He was elected as AKP deputy in June 2015, and then appointed energy minister.

http://www.independent.co.uk/news/world/europe/russia-accuses-president-erdogans-son-in-law-of-being-linked-to-isis-oil-trade-a6761436.html

Article: "Putin ve Erdoğan arasında 'IŞİD petrolü' atışması"
Publication: Hürriyet
Date: November 26, 2015

Berat Albayrak, Erdogan's son-in-law, was appointed Minister of Energy and Natural Resources in November 2015. Erdogan's son, Bilal, has a marine transport company - BMZ group. This company also owns a Maltese shipping company involved in oil transport. Erdogan denies involvement by members of his family. He maintains that the Assad regime and "supporters of that regime" are the buyers of ISIS oil.

http://www.hurriyet.com.tr/putin-ve-erdogan-arasinda-isid-petrolu-atismasi-40019208

Article: "Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey's President"
Publication: Zero Hedge
Date: November 26, 2015

Gürsel Tekin, CHP vice-president, said: "President Erdogan claims that according to international transportation conventions there is no legal infraction concerning Bilal's illicit activities and his son is doing an ordinary business with the registered Japanese companies, but in fact Bilal Erdogan is up to his neck in complicity with terrorism. As long as his father holds office he will be immune from any judicial prosecution." Tekin adds that Bilal's maritime company doing the oil trades for ISIS, BMZ Ltd, is "a family business and president Erdogan's close relatives hold shares in BMZ and they misused public funds and took illicit loans from Turkish banks."

Article: "IŞİD petrolünü Bilal Erdoğan'ın şirketi satıyor"
Publication: Sol Haber
Date: December 2, 2015

Finian Cunningham, who worked for British and Irish press (The Mirror, Independent, Irish Times) alleges that Bilal Erdogan who controls BMZ group is implicated in the oil trade. He says that oil comes from Deir Ez-Zor to Batman in Turkey and then transported to Iskenderun Port where it is loaded onto BMZ group-owned tankers for export to world markets.

Article: "Bilal Erdoğan's firm purchases two new tankers at cost of $36 million"
Publication: Today's Zaman
Date: December 15, 2015

The BMZ Group, a company owned by President Erdoğan's son, Bilal, purchased two tankers in the last two months at a total cost of $36 million. According to the Deniz Haber news agency, the two tankers bought by the BMZ Group, named Türkter 82 and Armada Fair, will be registered in October.

Article: "Are These The Tankers Bilal Erdogan Uses To Transport ISIS Oil?"
Publication: Zero Hedge
Date: November 30, 2015

Syrian Information Minister Omran al-Zoubi said, "All of the oil was delivered to a company that belongs to the son of Erdogan. This is why Turkey became anxious when Russia began delivering airstrikes against the IS infrastructure and destroyed more than 500 trucks with oil already. This really got on Erdogan and his company's nerves. They're importing not only oil, but wheat and historic artefacts as well."

Article: "İtalya savcılığına Bilal Erdoğan şikayeti"
Publication: Rota Haber
Date: December 4, 2015

Bilal Erdogan allegedly took $1 billion to Italy in October, 2015. Lawyer Massimiliano Annetta filed a petition with the Bologna prosecutor's office about alleged money laundering by Bilal Erdogan, requesting an investigation into the money he brought into Italy.

US Views

Article: "Kurdish former MP faces court case over ISIS funding claim"
Publication: Rudaw
Date: October 27, 2014

US Treasury Undersecretary David Cohen said, "Last month, ISIL was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey. It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey."

Article: "ISIS oil smuggling to Turkey insignificant: US official"
Publication: The Daily Star
Date: December 4, 2015

The State Department has dismissed Moscow's charge that Erdogan and his family are involved with ISIS oil trade. According to Amos Hochstein, U.S. special envoy and coordinator for international energy affairs, "The amount of oil being smuggled is extremely low and has decreased over time and is of no significance from a volume perspective - both volume of oil and volume of revenue."

Article: "Russia says it has proof Turkey involved in Daesh oil trade"
Publication: The Daily Star
Date: December 3, 2015

White House spokesman Josh Earnest said, "The irony of the Russians raising this concern is that there's plenty of evidence to indicate that the largest consumer of ISIL oil is actually Bashar Assad and his regime, a regime that only remains in place because it is being propped up by the Russians."

Mr. Phillips is Director of the Program on Peace-building and Rights at Columbia University's Institute for the Study of Human Rights. He served as a senior adviser to the State Department under President Obama. He was also a senior adviser and foreign affairs expert to the State Department under Presidents Clinton and Bush. Phillips is author of Losing Iraq: Inside the Post-War Reconstruction Fiasco. His most recent book is The Kurdish Spring: A New Map for the Middle East.

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