Tag Archives: ISIL

Foreign Policy, Illicit Networks

Stealth Wealth: ISIL and the Myth of Oil

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The Islamic State of Iraq and the Levant (ISIL) has established itself as an extremely powerful jihadist army in the heart of the Middle East. The group is well armed, commanding a vehicle fleet that includes 2300 High Mobility Multipurpose Wheeled Vehicles (HMMWV) and countless others along with enough weaponry and soldiers to manage a “state” of 300,000 square kilometers (roughly the size of Italy). ISIL is not just powerful, it is well funded. The group is reportedly so wealthy some members of the United States Government, without any apparent fear of hyperbole, repeatedly describe ISIL as the “best funded terrorist group in history” with oil as its main source of affluence.

The narrative is an attractive one. A wealthy terrorist group is novel and alarming. Fighting it requires new methods, new powers, and indeed new budgets. But it seems infeasible for the so-called Islamic State to accumulate wealth by selling functionally useless crude oil or poorly-refined petroleum products a truckload at a time. Survival alone must be very expensive indeed while under constant armed assault by a US-led coalition of 65 countries, along with Syria, Russia (arguably), Iran, and countless rival groups including the very capable Hezbollah. This gives credence to reports that some Sunni Arab states (allies of the United States) look the other way while their prominent citizens support the group.  Whatever the case, the mainstream media seems unwilling to question the narrative of ISIL’s oil riches.  The numbers however, do not support this idea.

Unbalancing the Books

Estimating ISIL’s oil revenue is complex and based largely on assumptions and derived intelligence but is useful for making the point that the group will have great difficulty profiting from the sale of stolen petroleum.

A generous estimate put ISIL’s February 2015 production capacity at 50,000 barrels per day (bpd). With a market price of $10 a barrel according to one Iraqi official, ISIL could theoretically make $15 million a month. But there is more to the story. ISIL does not control a single pipeline from origin to destination meaning they require 181 standard tanker trucks just to move all that oil, a very inefficient and expensive transportation method. Standard trucks of this type would require roughly four barrels of diesel just to make the 800-mile round trip from Kirkuk to Raqqah. That is 724 barrels per day ($217,000 per month) just to deliver to potential customers.

But ISIL needs fuel as well. A large percentage of ISIL’s estimated production would be consumed by 2300 HMMWVs, hundreds of armored vehicles, likely tens of thousands of civilian cars and trucks, heavy machinery for construction and survivability, generators, and heaters. With only about 70% of refined petroleum products useful for those purposes, ISIL’s for-sale inventory is down to somewhere in the neighborhood of 30,000 bpd. Subtract another 10% for likely corruption, loss, fuel contamination due to mishandling, and inefficiencies from distributed and improvised refining, that is 27,000 bpd before accounting for a single action by any of ISIL’s many enemies.

The Myth of ISIL's Oil
“Crude Stills:” A field refinery used by ISIL to process crude oil into useable forms such as diesel and kerosene.

All the same, 27,000 bpd is worth $8.1 million per month; not a paltry sum, but a far cry from the $50 million bonanza the United States estimates ISIL earns monthly from oil sales. It is also only one half of the equation. Though ISIL’s monthly expenditure is beyond the scope of this article, we must remember that its army of tens of thousands of soldiers is a very expensive commodity to operate. Those soldiers must be recruited, fed, paid, housed, equipped, armed, and trained. The wounded require expensive medicines to heal or keep healthy and their families must be compensated upon their deaths. If we compare these priorities with appropriation titles in the budget of the United States Army, we find that similar expenses account for 91.8% of the total US Army budget. Assuming ISIL has similar combat priorities, it is clear $8.1 million will not go very far.

Groupthink, Bureaucracy, and Confusion

If strained production capacity, distributed and inefficient refining, expensive distribution infrastructure, extremely high operating costs, and a questionable customer base are not enough to break ISIL’s bank, enemy action certainly will.  Unfortunately, there is a political rUntitledeason we keep hearing tales of the group’s fabulous riches. Since the Obama Administration began perpetuating the myth of ISIL’s oil wealth in August 2014, bureaucrats and generals have used the idea as a foundation for action. As early as September 2014, the Department of the Treasury sought authorities to target ISIL’s bank accounts and those of its financial backers while the State Department lobbied to block donations to ISIL from  citizens of Gulf Cooperation Council countries. Meanwhile, the Pentagon went after the group’s oil infrastructure, most notably in an effort to retake the Bayji refinery complex. Though this seems a refreshingly comprehensive approach to a complex problem, these agencies carried it out in the context of bureaucratic competition, particularly when diplomacy constrained military options or when bombing annoyed regional allies and complicated negotiations over the Iran nuclear deal. Yet amid the bureaucratic maneuvering, none were willing to question the attractive but invalid assertion that ISIL was making a lot of money…Until Vladimir Putin agreed with them.

Following the downing of a Russian fighter aircraft by the Turkish Air Force, Russia produced photo evidence accusing Turkey of being the primary consumer of ISIL’s stolen oil.  The Russian photos even implicated the family of Turkish President Recep Tayyip Erdogan in the trade. Despite their ambiguity, the allegations are troublesome for the mantra underpinning the policies of the United States, NATO, Turkey, and a number of other outwardly anti-ISIL stakeholders. The response from the United States came from special envoy and coordinator for international energy affairs, Amos Hochstein, who said that ISIL’s oil sales to Turkey are of “no significance from a volume [or revenue] perspective” and that most consumers are in ISIL-controlled areas of Syria and Iraq. Bizarrely, other US officials even questioned ISIL’s production capacity, pointing out that the group refines its stolen oil in “ad hoc desert pits equipped with crude stills”. Suddenly Washington was further complicating an already confusing policy by qualifying its previously bold statements about ISIL’s oil wealth.

The Cost of the Myth

Maintaining the myth of ISIL oil wealth was always an operational liability, incorrectly informing policy and improperly shaping decisions on the use of national power. It is now clear the tortured logic required to maintain the fiction is an international political liability as well and it is time for the United States and its allies to face facts and abandon the groupthink. ISIL is not enjoying a massive windfall from the sale of oil and instead is waging a successful war with more intractable sources of funding including possible covert sponsorship from some of America’s less scrupulous Sunni allies. Until Washington is willing to face the reality of ISIL’s oil wealth, those “allies” will enjoy political cover to support the Islamic State and Mr. Putin will continue to use America’s own rhetoric against it.

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC 

Africa, ISIL

Tunisia – Fertile Ground for Terrorism?

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Last week, Tunisia was –unsurprisingly– hit again by a terrible terrorist attack. At least 39 Tunisians and foreign tourists were killed when a jihadist killer stormed the beach of two luxury hotels near Sousse in the heart of the country’s historic tourist zone. Without intervention unresolved socio-economic issues will continue to provide targets vulnerable for exploitation by terrorist groups.

Since the Jasmine Revolution in 2010-2011, the security situation in Tunisia remained quite calm but somewhat fragile until the summer of 2014. Apart from the Bardo Museum attack in March, several locations throughout the country were targeted by terrorist actions and social unrest.  Violent attacks occurred in Kasserine/Mount Chambi, El Kef, Sidi Bouzid, Tozeur, and Gafsa in the center and south of Tunisia, as well as Jendouba in the north and the Sfax along the central coast while increasingly active Salafists exploited minor riots in the southern towns El Faouar and Kebili. After the Bardo attack, Tunisia’s security forces took the initiative and apprehended or killed dozens of Salafi jihadists. While these actions achieved measures of localized success, they were not enough to defeat terrorism in the country.

The Socio-Economic Situation

Tunisia possesses many of the necessary requirements to serve as a positive role model for the other Arab Spring countries. This became apparent through the ratification of a modern constitution as well as successful presidential and parliamentary elections held in 2014. Despite this progress the country is not yet “over the top”; a fact frequently ignored by the West which is too happy to declare the triumph of democracy. Although the tragic Sousse massacre served as a wakeup call no one wanted to hear, the economic situation in Tunisia provides a fertile environment for discontent. Unemployment, a lack of foreign investment, labor pressures, and threats to tourism will increase social problems exploitable by radical Islamists.

Increased violence in popular tourist locations endangers the fragile tourist industry in Tunisia.
Increased violence in popular tourist locations endangers the fragile tourist industry in Tunisia. Image Source: Tunisia Ministry of Tourism

The root cause of Tunisia’s current problem is a socio-economic situation that remains problematic four years after the revolution. There is wide developmental disparity between the coastal areas and the interior hinterland. Though the Tunisian government is using its limited resources to improve this situation in neglected areas like Gafsa, Kasserine and Sidi Bouzid (where the revolution started), the people there are –understandably– very impatient and the results have been mixed. In 2014, official figures said job seekers made up 15.2% of the 3,950,000-person workforce; an increase from 13.3% in 2006 though actual figures are probably higher. Unemployment among youth (those 15-24 yrs) is at 42.3% while about 35% of the country’s university graduates lack jobs. In the neglected areas of the hinterland these figures are significantly higher. In some areas more than 50% of the young population is unemployed.

By some estimates, Tunisia requires a 6% annual increase of the GDP for several years to achieve stability but this remains highly unlikely. Forecasts fall far short of that goal, ranging from +2.8% to +4%. What seems certain is the gap between available jobs and job-seekers will unfortunately increase for the foreseeable future though having a job in Tunisia is not an end to trouble. Even those Tunisians that are employed are coming into increasing conflict with their employers. Labor unions often stir up conflict with employers and between each other for their own gains. Fortunately, the most important union, the “Union Générale Tunisienne du Travail” (UGTT; Tunisian General Labor Union), has been playing a positive role in most of the conflicts.

Taken alone, these statistics appear daunting but the problem is further complicated by a significant decline in foreign direct investment since the revolution. Furthermore, Tunisia´s economy suffers heavily from the uncertain economic situation in Europe as well as from the war in Libya, where nearly 100,000 Tunisians worked before the revolution that overthrew the regime of Muammar Gaddafi. Prolonged regional instability and the continuation of terrorist attacks will retard remittances, discourage foreign investment, and impact the largest sectors of the economy.

In 2013 travel & tourism contributed 485,000 jobs (12.3% of the workforce) and comprised 15.2% of Tunisia’s Gross Domestic Product (GDP). Though the estimates for 2014 are slightly higher at 15.5%, tourist arrivals (6 million) are off 13.1% from the 6.9 million that visited the country in 2010. After the Bardo and Sousse attacks all these figures will undoubtedly decrease significantly.[1]

More than four years after the Jasmine Revolution unstable socio-economic factors serve as vulnerabilities for terrorist groups to target.
More than four years after the Jasmine Revolution unstable socio-economic factors serve as vulnerabilities for terrorist groups to target. Image Source: The Next Great Generation

Currently, the agricultural and fishing sectors employ approximately 20% of the Tunisian workforce. Of these industries, agriculture poses a very complicated problem as on one side it is a crucial provider of jobs while at the same time it draws heavily on the nation’s very limited water supply. Regrettably, Tunisian agricultural products do not fare well on the international export market. Because of the low quality of production compared to invested resources, many consider this use of natural resources a waste.

Another sector requiring immediate reform is the textile industry. Comprised of some 2,094 industrial enterprises employing 10 or more persons, 1,656 produce exclusively for the export market. This sector currently accounts for a quarter of Tunisia’s exports and just shy of half of all manufacturing jobs. However, the future looks bleak as the industry in the face of increasing competition from China, Bangladesh, and other low-cost production countries.

Decreasing tourist revenues and stiff competition from abroad in the textile and  agricultural sectors drains Tunisia’s foreign currency reserves, putting pressure on the government’s ability to maintain heavy (and increasing) subsidies on basic foodstuffs like bread, milk, and sugar.  In 2014, subsidies accounted for a staggering 20% of all public spending (USD $4 billion, up from USD $600 million in 2010). Subsidies of this magnitude create massive incentives for smuggling which reduces the government’s ability to tax commerce, further strains its troubled finances, and erodes social support programs, particularly for the unemployed. With little improvement in their situation since the time of the Ben Ali regime, unemployed Tunisians increasingly compete with up to one million Libyan refugees for jobs and government support.

The Strategy of the Terrorists

The radical Islamists are firmly entrenched in some parts of Tunisia. With their ranks strengthened by fighters experienced from the wars in Syria, Iraq, and neighboring Libya, terrorist cells recruit sympathizers and fighters by exploiting the grievances of the population in the neglected hinterlands. Once armed and trained, it doesn´t really matter to which specific group the terrorists belong. The various Salafist jihadists are “coordinated” through a common ideology and vision of a fundamentalist Islamic State based on the Sharia. This commonality provides a “good enough” guideline for their distributed activities while the porous borders and chaotic situation in Libya will provide access to inexhaustible stores of weapons and ammunition.

The Salafist jihadists are aware that a military victory is not realistic at this time. As a result, their immediate objective is the establishment of “resistance pockets” in remote areas such as Jebel Chaambi. A consolidation of their rule and an enlargement of the controlled territory will follow. As their territory expands, they will terrorize the population and enforce a strict application of the Sharia.

Terrorist groups will attempt to exploit socio-economic vulnerabilities to discredit governments while other branches attempt to demonstrate an ability to fill the gap in services provided by the government.
Terrorist groups will attempt to exploit socio-economic vulnerabilities to discredit governments while other branches attempt to demonstrate an ability to fill the gap in services provided by the government. Image Source: Tunisia-live.net

Lacking the resources for a pure military victory, the Islamists’ strategy to assume power in Tunisia will likely include actions designed to trigger a social uprising. Initial phases will lean heavily on actions designed to destabilize the state in order to prepare the ground for such a revolution. For that purpose, attacks will focus on discrediting security forces, damaging or degrading key sectors of the economy (above all tourism) and (increasingly likely) threatening Western targets, as Western support is crucial for Tunisia´s economic recovery. These jihadists’ attacks will certainly come in the form of assassinations, bombings, raids, and larger scale coordinated terrorist attacks on prominent targets. (For a more indepth discussion refer to Security Risks in North Africa – The Strategy of the Terrorists)

While some groups focus on militant actions, other groups like Ansar al-Sharia serve a complementary function by engaging in charity activities to show care and concern for the needy among their followers.

The Way Forward

Image Source: REUTERS/Yuri Gripas
U.S. Secretary of Defense Ash Carter walks with Tunisian President Beji Caid Essebsi before their meeting at the Pentagon in Washington May 21, 2015. Image Source: REUTERS/Yuri Gripas

Despite the odds, Tunisia is not a lost cause. There are signs of hope as well as many positive factors in the country. Tunisia has high levels of education, a strong civil society, close military links to the West (particularly with France and the U.S.), and an open-minded coastal population eager to integrate with other nations.

Furthermore, the successful transition from the Ben Ali dictatorship and the positive developments brought about by the moderate Islamist party Ennahda and its leader Rashid Gannouchi show that moderation and progress are achievable. However, there is an immediate need for much more international support in order to facilitate the transition of Tunisia into a model for the positive development of a Muslim state. The foundation for such a success is still present, but without sufficient support the future path of the country will be very, very difficult and without urgent intervention we should expect more violent incidents and terrorist attacks…

Wolfgang Pusztai is a Security & Policy Analyst. He was the Austrian Defense Attache to Libya and Tunisia from 2008 to 2012. Be sure to read his other contribution to The Affiliate Network: MISRATA’S NEXT STEPS: NARROWING THE WINDOW TO SAVE LIBYA 

[1] After the 2002 Djerba/Ghriba synagogue bombing in 2002 (21 killed) the number of financial strong visitors decreased by about one million. This time it will be worse.

International Organizations, ISIL

The Social Media Myth

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If you are reading this article you are probably a user of social media.  If you have been using it for a while, you may even realize the power of social media to inform, shape perceptions, create communities, and of course, to misinform.  There is no doubt we can learn a tremendous amount of things from reading Twitter for example but we often overlook the potential of social media to provide understanding.  There is a myth in military circles, a social media myth, that if we look hard enough, we will find some golden tidbit that will tell us how to win.  No one makes this mistake more often or more decisively than senior military officers seeking accurate intelligence to drive operations.  While most avoid social media themselves, they know it makes available a tremendous amount of information, and to a greater or lesser degree they all give lip service to its importance.  But the disappointing fact is that the vast majority of senior military officers have no idea whatsoever how to maximize social media to benefit their intelligence and operations processes.  Worse, these officers are learning exactly the wrong lessons about social media from faulty training simulations entrenched in military exercise programs.

https://medium.com/i-data/israel-gaza-war-data-a54969aeb23e
A network graph of the 2014 UNWRA School bombing. Note the easily visible relationships between communities of pro-Palestinians (green), pro-Israelis (light blue), journalists (grey), and American conservatives (dark blue). Communities that share more connections appear closer together.

The Social Media Problem

Why do I pick on senior military officers?  Because although they accept social media is important, they almost uniformly resist using it. Their reasons range from concerns about privacy and security, to perceptions that social media is a venue for teenage nonsense rather than the serious business of military commanders.  This lack of engagement and experience with the tool deprives them of understanding and leads to misperceptions.  A perfect example of this is a recent story about a successful air strike in Syria against a command post of the Islamic State of Iraq and the Levant (ISIL). According to a statement from the commander of US Air Combat Command (ACC), their targeting staff derived the location of the headquarters from an ill-advised post by a Twitter-happy ISIL fighter.  While this sounds like a terrific victory, combing through tweets for actionable intelligence is probably a waste of time and misses the real value of social media sites that are more useful as a source of big data than of targeting data.

Take Twitter as an example.  Twitter averages about 500 million “tweets” per day.  Just to put that into perspective, that’s 6000 tweets per second.  Even with automated tools, finding one tweet that contains useful information is an enormous effort to say the least and it’s only the beginning.  Interpreting the accuracy and reliability of a single tweet will be very difficult indeed.  Here’s why: a tweet is 140 characters of data with extra allowances for hyperlinks, pictures, and location data.  There’s not a lot to go on there and while a tweet is attributable to the person that generated it, that person’s identity can never really be verified.  Let’s ponder for a moment the fact that according to ACC, a military officer somewhere made a decision to drop ordnance based on the digital equivalent of an address scribbled on a piece of paper by an unknown individual and posted on a bulletin board with millions, no, billions of other similar notes. That’s an incredibly low standard by which to make such decisions and the possibility is extremely high that there is more to the story than is available in the tweet. Though we have to assume there were other sources of intelligence applied to verify this target, this is not what ACC’s statement suggested and it does not change the fact that they must have spent an enormous amount of man hours and computing power to find and interpret that tweet. The question is: was it worth it?  ISIL will undoubtedly tighten up its operational security, making this kind of targeting even more rare than it already is.  Worse, ISIL will learn from this. What’s to stop them from falsifying targets, wasting coalition resources or luring it to drop bombs that will cause civilian casualties or worse?  When that happens, and it will happen, the use of single-source data from unverifiable individuals will come into serious question as a basis for targeting decisions.

Reinforcing Bad Habits

Surely the intelligent and well-trained staff officers of the United States Military have figured this out.  But they have not figured it out, or at least the most senior leaders among them haven’t.  Senior military officers that range in age from the late-30s to the mid-60s simply did not grow up with social media as a part of their lives. Some have started to use it but are bucking a military culture that is social media-skeptical.  Secondly, although American officers are generally well-trained, they are trained in the wrong techniques when it comes to social media.  To illustrate, consider one aspect of the synthetic social media environment used in exercises at NATO’s Joint Warfare Center (JWC).

JWC replicates Twitter with a system called “Chatter”.  Chatter is very similar to Twitter in that a “chatt” is a short text message that allows attachment of photos and similar files.  Hyperlinks are not used because Chatter is only available on NATO classified computer networks to prevent leakage of exercise information into the real world.  This is not a trivial point.  Leakage of scenario graphics from a US military exercise in 2015 caused an uproar in Texas when citizens discovered the Pentagon had labelled their state “hostile” for exercise Jade Helm.  Keeping Chatter on classified networks limits its scope to a ridiculously small sample; on average, the volume of chatts in an exercise might reach 300 a week.  While the vast majority of that volume is useless “white noise”, some chatts inject useful information into the exercise to cause a specific response by the training audience.  Needless to say, in an information environment that tops out at 300 inputs a week, intelligence staffs stand a good, yet thoroughly unrealistic chance of finding the needle in the very small haystack.  This sends two very strong and misleading messages about social media to Allied commanders. One is that they can and should expect to find useful bits of actionable intelligence hidden amongst social media posts. Secondly, even if commanders are thinking about analyzing trends and relationships between communities, Chatter is completely incapable of providing the volume of data required to do so.  The system simply discourages commanders from understanding what is arguably the most valuable characteristic of social media, which is that big data can reveal broad truths about an environment.  [For an example of how this can support understanding and decision making, see this fascinating Wired Magazine article.]

Big Data, Not Targeting Data

Continuing to perpetuate the social media myth will further entrench the wrong lessons in the minds of our commanders and ensure that using social media for targeting is the enemy of using it for understanding. Making social media sites like Twitter a useful or reliable source of information will require too much in the way of resources and will produce too few positive results and indeed increasingly negative ones as the enemy adapts.  Western militaries simply must change their approach to social media as a tool, viewing it not as a source of targeting data but as a gateway to big data. Training aides like Chatter must replicate big data but doing so will require involvement of the public. While this is not easy and carries significant risk, it is manageable risk.

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.