Britain’s secret ties to governments, firms behind ISIS oil sales
by Nafeez Ahmed
Jul 31In the scramble to access Kurdistan’s oil and gas wealth, the US and UK are turning a blind eye to complicity in ‘Islamic State’ oil smuggling.Key allies in the US and UK led war on Islamic State (ISIS) are covertly financing the terrorist movement according to senior political sources in the region. US and British oil companies are heavily invested in the murky geopolitical triangle sustaining ISIS’ black market oil sales.
The Kurdish Regional Government (KRG) in Iraq and Turkish military intelligence have both supported secret ISIS oil smuggling operations and even supplied arms to the terror group, according to Kurdish, Iraqi and Turkish officials.
One British oil company in particular, Genel Energy, is contracted by the KRG to supply oil for a major Kurdish firm accused of facilitating ISIS oil sales to Turkey. The Kurdish firm has close ties to the Iraqi Kurdish government.
Genel operates in the KRG with the backing of the British government, and is also linked to a British parliamentary group with longstanding connections to both the British and KRG oil industries.
The relationship between British and Kurdish energy companies, and senior British politicians, raises questions about conflicts of interest — especially in the context of a ‘war on terror’ that is supposed to be targeting, not financing, the ‘Islamic State.’
Kurds, Turks and blind eyesOne of ISIS’ most significant sources of revenue is oil smuggling. The Islamic State controls approximately 60% of Syria’s oil, and seven major oil-producing assets in Iraq.
Using a carefully cultivated network of intermediaries and ‘middlemen’ in the Kurdish region of Iraq, as well as in Turkey, ISIS has been able to produce a phenomenal 45,000 barrels of oil a day, raking in as much as $3 million a day in cash by selling the oil at well below market prices.
But the sheer scale and impunity of this oil smuggling network has caused local politicians to ask whether certain officials in the KRG and Turkey are turning a blind eye to these operations.
Iraqi, Kurdish and Turkish officials have accused both the KRG and Turkish governments of deliberately allowing some of these smuggling operations to take place.
Tensions between the KRG and Iraq’s central government in Baghdad are escalating over who controls production and revenues from oil fields within the Kurdish region. Kurdish officials see the oil within the Kurdish-controlled territory of Iraq as a means to seek greater autonomy, if not potentially total independence, from Baghdad — whereas the Iraqi government seeks to ensure it retains sovereign control over all sales from its own oil fields, which include those in the KRG.
Those tensions reached a crescendo when the KRG began unilaterally selling oil by exporting it to Turkey, bypassing Baghdad.
ComplicityKRG and Turkish authorities vehemently deny any role in intentionally facilitating ISIS oil sales. Both governments have taken measures to crackdown on smuggling operations, and US and UK authorities work closely with the KRG to identify ISIS smuggling routes.
Despite KRG arrests of Kurdish ‘middlemen’ involved in the ISIS black market oil sales, evidence continues to emerge that these measures are largely piecemeal, and have failed to address corruption at the highest levels.
According to a senior source in the Iraqi government’s ruling Islamic Dawa Party, US and Iraqi authorities have developed “significant intelligence confirming that elements of the KRG have tacitly condoned ISIS oil sales on the black market.”
The source, which has direct access to top Iraqi government officials, said that the KRG had originally seen the ISIS invasion of Iraq as an opportunity to consolidate Kurdish control over disputed territory, especially the oil-rich region of Kirkuk. The Kurds had not, however, anticipated how powerful ISIS’ presence in the region would become.
In the early period of the invasion last year, he said:
“Elements of the KRG and Peshmerga militia directly facilitated secret ISIS oil smuggling through the Kurdish province. This was known to the Americans, which shared intelligence on the matter with the Iraqi government in Baghdad.”The issue inflamed tensions between Baghdad and the KRG, contributing to efforts by Hussein al-Shahrestani, then Iraq’s deputy prime minister for energy affairs, to crackdown on independent Kurdish oil exports.
His successor, new oil minister Adel Abdul-Mehdi, was brought in through a reshuffle in September last year that was engineered under US diplomatic pressure. Unlike Shahrestani, the source said, Abdul-Mehdi has a much more conciliatory approach to the Kurdish oil question, one which also happens to suit the interests of US and British investors in the KRG: “This has meant that Baghdad has also been much more lax on evidence of ISIS oil smuggling through the KRG.”
The source confirmed that under mounting US pressure, “KRG authorities have taken serious steps to curb the illegal smuggling on behalf of ISIS. But the smuggling still continues, although at a more restrained level, with the support of elements of KRG’s ruling parties, who profit from the black market oil sales.”