Iraq Is Losing Billions In Oil Revenue To ISIS

Iraq’s Oil Ministry has said that the country is losing as much as $1.2 billion a month in oil revenues as a result of Islamic State militants seizing oil refineries and pipelines in the areas it controls. As a result of Islamic State, Iraq has lost the export of 400,000 barrels per day of oil, the ministry estimated.

Assem Jihad, a spokesman for the Oil Ministry, told RFE/RL’s Radio Free Iraq on November 11 that these losses are having an adverse affect on the overall state budget.

Islamic State militants had also inflicted heavy damage on oil installations in areas under their control, the spokesman said.

Islamic State militants in Iraq have replicated the strategy they have used to disrupt and appropriate Syrian oil production. Patrick Osgood of Iraq Oil Report told Vocativ in September that IS was “lifting oil from stricken pipelines, smaller oil fields…and then they sell it through the very established Iraqi oil smuggling industry.”

Islamic State militants are handling around 25,000 barrels a day of oil in the north and midwest, according to a report by CNN. This is only a small fraction of the country’s overall oil production, however. (In June 2014, Iraq produced 3.17 million barrels per day.)

Still, experts have warned that any severe disruption caused to Iraqi oil production by Islamic State could have significant consequences.

In an attempt to mitigate these losses, Iraq’s Oil Ministry is seeking to increase oil production from its middle and southern oil fields. The ministry said that it hoped the exports from the West Qurna-2 field would rise to over 400,000 barrels per day by early 2015.

At a closer glance, however, this figure is no higher than that already set for West Qurna-2 back in March.

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