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ISIS profiting from seized oil
02:21 - Source: CNN

Editor’s Note: John Defterios is CNN’s Emerging Markets Editor and host of Global Exchange, Marketplace Middle East and One Square Meter. Follow John on Twitter.

Story highlights

ISIS controls several oil fields in Iraq and Syria, which it is using to finance its terror operations

However running refineries is difficult and ISIS has suffered setbacks in areas such as Baiji

It is estimated to be earning more than $3 million a day in black market oil sales

It may be struggling to increase that -- but the funds are plenty to finance its terror operation

CNN  — 

ISIS videos are part of today’s new reality. One of the many to hit social media has the viewer hearing a recitation of Quranic verses describing a jihad in the battle for Syria’s Al Omar energy facility. Syria’s largest oil field is one of a handful now under the firm grip of the terrorist organization.

ISIS may not be operating the type of polished pipeline infrastructure one would find in southern Iraq around Basra, but Iraqi oil ministry officials say an old fashioned truck network for this crude is active and serving distribution needs.

And now, after nearly three months of heated battle in Iraq, one can see a clearer picture of where ISIS stands as an energy player.

John Defterios

It popped up on the global radar in June by seizing assets in Iraq, but building on those early gains, according to a number of energy sources, is proving difficult. August was not a good month for ISIS.

It lost its battle for one of Kirkuk’s big fields, with potential production of 600,000 barrels a day, and could not keep control of Iraq’s largest refinery at Baiji, on the main road to Mosul.

What they do hold, Iraqi officials suggest, will need maintenance. So far, it is getting that work done only through intimidation of on-site engineers who are not loyal to the ISIS cause. ISIS’ income from oil is falling as they struggle to control the personnel within refineries, according to Assim Jihad, a spokesman at Iraq’s Oil Ministry.

“At first they got a large sum of money by seizing inventories, but this cannot last,” he added.

The Iraq Energy Institute estimates ISIS is producing about 30,000 barrels a day in Iraq and 50,000 daily in Syria. On a black market price of $40 a barrel, it is earning $1.2 million a day in Iraq and $2 million in Syria.