By Ruaraidh Maciver
Middle East/Africa Editor, History Undergraduate Student
The Islamic State has existed as an independent group for almost two years now, and is currently fighting several different factions within Syria and Iraq. These include the Iraqi army and its’ associated militias, the Kurdish nationalists YPG, the Syrian rebels, the Syrian army, and is suffering airstrikes from countries all over the globe, with an estimated 60 nations being involved in the conflict either directly or indirectly. With all of this combined military power, the question begs to be asked – how can a group that has existed for so short a time, and only holds an area of land the size of Belgium, withstand such force?
Nine months ago, the Pentagon assured the world that oil was no longer ISIS’ main source of income. This was the result of months of strategic bombings, which had aimed to cripple their ability to both extract and transport oil from the lands which they had captured. This decrease in funding was expected to lead to the collapse of ISIS, as they would lack the means to rebuild key structures, or to replace damaged vehicles and equipment.
How can a group of this size, which has existed for such a short time, withstand such force?
In reality, the terrorist group seems to have suffered a minimal loss of income, with their earnings being estimated at $1.5 million a day (about £1 million), with an almost identical evaluation being given in September of 2014. The Islamic State now relies heavily upon smaller, temporary structures which are able to extract oil, and are highly mobile, making the task of identifying these locations increasingly difficult for coalition forces. Although this has led to a slight drop in oil production for them, this has allowed a far more reliable method of extraction, with significantly lowered risks of being attacked by aircraft.
However, oil in itself is worthless without willing customers, and it would seem almost incomprehensible to imagine a consumer willing to conduct business with an organisation that has committed atrocities on the scale of the Islamic State. But astoundingly, some of the groups’ chief enemies, including the Syrian regime and the Turkish government, have been their biggest financial backers. Despite initially appearing unfathomable, the reason for this business relationship is rather self-evident.
In 2010 the International Monetary Fund reported that oil accounted for over 25 percent of Syria’s total economy, and until recently ISIS held a large share of Syria’s oil fields. With its sales accounting for such a significant proportion of his administrations’ revenue, it is not surprising that Syrian President Bashar al-Assad was willing to buy and sell this oil on, especially as ISIS was extracting and offering it for such a reduced rate. The European Union has tried to stop these dealings, with the prime oil broker between the two sides, George Haswani, facing sanctions and having all of his funds in European banks frozen.
Haswani’s company, HESCO, has a history of working with the Syrian government prior to the civil war. Mahrukat, a Syrian state-owned company which managed the storage and distribution of petroleum production within the country, contracted HESCO to construct a gas plant at Palmyra and a pipeline from the cities of Homs to Aleppo. One of these constructions is now under ISIS control, and the other is used to transport oil from the terrorist group to the regime.
Haswani also has business contacts in Russia, using the Russian state owned steel company Tyazhpromexport, and Stroytransgas (STG Group), one the largest private engineering and construction companies in Russia to provide materials for his work in Syria and the rest of the world. The sanctions imposed on Haswani by the EU are not simply punishing himself and his business, but are also damaging the Russian economy, as business dealings with these companies will no longer be taking place.
While Russia’s involvement in Syria is not a result of a loss in business from HESCO, it is representative of a bigger financial problem Russia is facing currently. With both the sanctions which Europe and the United States of America have imposed on Russia in September of last year, and the crash in oil prices, Russia’s economy has contracted, by over two percent in the final quarter of 2015 alone. Due to the United State’s unexpected increase in energy production, it has caused the price of crude oil to fall dramatically, and make the main target for oil sales Europe and Asia.
Is this loss of business representative of a bigger financial problem Russia is facing currently?
Organization of Petroleum Exporting Countries has failed to reach an agreement on how to best combat these low oil prices, with Saudi Arabia simply increasing their output. This is devastating news to Vladimir Putin’s government, as Russia cannot amplify production of oil in the same way that Saudi Arabia can, but is instead dependent on a price over $100 a barrel (about £66) to keep their economy stable. If war was brought to an end in Syria, then production could begin on the Russian-backed Iran-Iraq-Syria pipeline, which would be capable of providing serious opposition to Saudi Arabia’s supply of oil to Europe. With Russia being a strong ally to both Syria and Iran, they would be in an extremely powerful position.
With all of these incentives to end the war in Syria, it seems odd that Russia would wait until September of this year to dedicate troops to the conflict. However, it would appear that this was not the case, as Russia had troops within Syria almost a year prior to the vote passing in Moscow.
In an exclusive interview with a junior British Army officer who received regular intelligence briefings while stationed in Cyprus this year, and the officer confirmed that Russian involvement in Syria was known by British intelligence in October of 2014.
“Russia is now in a position of weakness, they’re desperate to get other resources because all of their current ones have been blocked by Europe, and all they have left is their military to seize these things.”
The junior officer also commented that:
Syria “is a key interest for them, and if they think they are being undermined then they are going to maintain their interest. Russia maintains that sovereignty of rule is more important than respecting human rights, mainly because their own is so terrible … every encroachment by the UN in regard to human rights will get the ire of Russia, because it is essentially criticising them. If they don’t get in there [Syria] and stop it, then the next door to be stopped at will be theirs. It is acting as a buffer. This is almost like their sphere of influence they had in World War II.”
The reason for this early build up in Syria is relatively easily explained, Russia does not have the military capability to make airstrikes from their own soil, and lacks an ally close enough to launch strikes from in the way that the USA and Britain can.
“In Syria they are trying to publicise the image that they are reacting fast. In fact, on the west coast of Syria they had an inland naval base with 1,800 naval marines guarding aircraft already there before the vote even took place,” the officer said.
Indeed, on the day that the vote passed, Russian fighter jets carried out eight airstrikes against ISIS positions. Until recently, coalition forces seemed content to allow Russia to lead the fight against the Islamic State. However, with the recent attacks in Paris, international airstrikes have increased dramatically, with France declaring that they are in a state of war with ISIS.
Hopefully this renewed pressure will be successful in putting an end to this organisation of misery, but as Senator Bernie Sanders has quipped, “what we have got to be is not just strong and tough, but we have got to be smart.”
Feature image courtesy of Kremlin.ru