The Obama administration believes it has sharply cut back the oil revenues that have made the Islamic State the best funded terrorist organization in history, according to senior US officials.
The US has been combining military strikes that target energy infrastructure controlled by Islamic State in Iraq and Syria with heightened tracking of smuggling routes used to move oil through Turkey and Kurdistan, according to these officials.
In October, the US Treasury Department estimated that Islamic State, also known as ISIS or ISIL, was earning between $1 million and $2 million a day from oil sales. Administration officials, without citing specific figures, say they believe they have already scaled back this revenue stream sharply.
“We know this has come down significantly,” said Amos Hochstein, the State Department’s special envoy and coordinator for international energy affairs, in an interview. “The value has gone down.”
The Obama administration has cited cutting off Islamic State’s earnings as one of the keys to pushing back the Sunni militia from areas it has gained control over in Iraq and Syria over the past year. In addition to oil sales, U.S. officials cite the ransom earned from kidnappings, extortion and the sales of antiquities as Islamic State’s major revenue generators. The Obama administration has also voiced concerns about donations coming to the organization from Persian Gulf countries, including Qatar and Kuwait.
The U.S. has pursued a stepped-up campaign to drain Islamic State of its revenues since July, according to U.S. officials.
The Pentagon’s military strikes on Islamic State have targeted the organization’s oil infrastructure, including refineries and distribution assets, in western Iraq and eastern Syria. ISIS is believed to control at least eight oil fields in eastern Syria that were formerly a major cash earner for the regime of President Bashar Al-Assad.
U.S. officials say the ferocity of the strikes have spooked smugglers from attempting to truck oil through these regions, though Pentagon officials stress they’re not targeting the smugglers.
The Obama administration has also increased its cooperation with Turkish officials and the government of Iraq’s semiautonomous Kurdish region to better police their borders.
“We have taken the production down, disrupted the trucking routes and made it more difficult to get the oil across the border,” Mr. Hochstein said. “But more still needs to be done.”
