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Islamic State Loses Its Oil Business

Allied air sorties have damaged the terrorists’ chief source of funds
The aftermath of an airstrike near the besieged city of Kobani, close to the Turkish border, on Oct. 15
The aftermath of an airstrike near the besieged city of Kobani, close to the Turkish border, on Oct. 15Photograph by Murat Kula/Anadolu Agency/Getty Images

On Sept. 10, President Obama announced the U.S. would launch a campaign of airstrikes against the terrorist group Islamic State in Syria and Iraq. The idea was to bomb the jihadis into nonexistence. That’s proving hard: Not only is Islamic State well armed, it’s also well financed, thanks to oil wells and refineries it’s captured. By late June the organization was raising as much as $2 million a day refining and smuggling oil, U.S. officials and terrorism experts say.

Although the airstrikes have failed to keep Islamic State from advancing in the field, they have succeeded in damaging its oil network, reducing its ability to make gasoline and diesel for its tanks and trucks and diminishing a vital source of funding. An Oct. 14 report from the International Energy Agency in Paris estimates the jihadis now control only about 20,000 barrels of daily oil production, down from about 70,000 in August. Most of that production is in Iraq.