Understanding The Islamic State of Iraq and the Levant

Recent headlines were peppered by an Islamic organization which threatened Chicago and the Whitehouse. Rather than a demonstration of capability, their public relations campaign sought to elicit fear from ordinary Americans. Like most stories, there is more to ISIS than Americans are commonly told. Critics of the 2003 US led invasion in Iraq argued that interest of the United States in Iraq has been oil. This was despite emphatic denials by US officials and apologetics for the US position (Salter 2005). Prior to the US led invasion, a document called the, Strategic Energy Policy Challenges For The 21st Century, described how America was facing the biggest energy crisis in its history. The documented declared “Saddam as a threat to American interests because of his control of Iraqi oil fields,” and, “Recommended the use of ‘military intervention’ as a means to fix the US energy crisis,” (Mackay 2003). While the document is published by the Council on Foreign Relations, the architects behind this work are James Baker III and Vice President Dick Cheney. Baker’s Washington insider ties also include a position as lead legal council for Exxon-Mobile while Richard Cheney has been heavily criticized for his ties to big-oil services conglomerate Halliburton. Similarly, the National Security Council published a document six months before September 11th offering a similar hawkish sentiment advocating military intervention by stating, “The review of operational policies towards rogue states such as Iraq, and actions regarding the capture of new and existing oil and gas fields,” (Mayer 2004).

During the course of the war the US government incurred huge amounts of debt (RT 2011; Wilson 2012). Despite the efforts of the hawks above, Iraqi oil contracts went to Chinese firms (Iraq: BP, Chinese Win Lucrative Oil Contract 2009; Hafidh 2013). From the assumed security risks and capital investment in pipelines it looked like China was able to beat the US to this lucrative market. Trillions were invested in the war by the US (Herb 2013) and the return on investment appeared to be very low as the fruits of democracy in Iraq appeared to create a police state (Floyd 2009; “Human Rights Watch: Iraq Becoming ‘Police State'” 2012).

There have been several resistance movements in Iraq that vary in their scope and level of political violence. In a series of successive operations, Osama bin Laden, Abu Musab al-Zarqawi, and several other key leaders of these movements were killed by US and allied efforts. The current leader of the Islamic State of Iraq and Syria is named Abu Bakr al-Baghdadi. His life as reported up until recently has been unremarkable. Earlier in his life, his doctoral studies in Iraq were focused on Salafi Islam and Shiriah Law. Most Salafi’s are not from Iraq. Allegedly he studied in the cities of Tobchi and Sammarah. The story released by the British newspapers have al-Baghdadi being an Iraqi national while the Iraqis note he may be of Saudi origin (“The Killing of Abu Bakr Al-Baghdadi, of Saudi Nationality in Nineveh” 2014; Daly 2014). According to the UK papers, he was not viewed as a trouble maker by Saddam’s regime (Sherlock 2014). After the US led invasion, he had been held responsible for terrorist acts under the pseudonym Abu Duaa, and ended up in the US run, Camp Bucca in 2005. He was released from US and allied custody in 2008 (Daly 2014). Following the death of Abu Omar al-Baghdadi, he was elected by a council in Nineveh in 2010 to lead this group and as one of his first notable acts he sent mujahadeen to fight against the Syrian government. Through several courses of events, ISIS said that it changed its name to Al-Queda but operatives in Al-Queda have disavowed their relationship with ISIS (Mortada 2014). As their influence in Syria and Iraq continued to grow, Abu Bakr al-Baghdadi declared himself caliph (“ISIS Militants Capture Major Syrian Air Base in Northeast” 2014).

Most interesting in the ISIS narrative are documents released by NSA Defector Edward Snowden regarding Abu Bakr al-Baghdadi. Edward Snowden alleges that al-Baghdadi is an intelligence asset of the western intelligence agencies (Nimmo 2014). A week-end radio talk show host, investigative journalist and author, named Aaron Klein further supports this thesis alleging in that militants were trained by the US military in Jordan in 2012 (Klein 2014). Upon completion of their training Klein alleges these fighters joined ISIS (Klein 2014). These rebels were armed by the United States in an airlift while they fought against the Ba’athist Syrian government (Spencer 2013) and a New York Times story notes that aid from Turkey and the US helped support the ISIS rebels while they fought in Syria (Chivers and Schmitt 2013). Reporter Tony Cartalucci also support the thesis via a Global Research Article that ISIS is a creation of the United States (Cartalucci 2014).

When the US and its allies overthrow the regime of Saddam Hussein and helped the Iraqi people implement some democratic processes, the influence of Saudi Arabia and Iran could be felt in all aspects of the political spectrum (Beaumarchais 2005; Gordon 2010; Naylor 2007). This included reasons why these oil contracts among other infrastructure developments in Iraq went to China. If the US policy noted before the war was in conflict with the outcome of the Chinese take over, then how should the US view the take over of Iraqi and Syrian oil fields by Islamic State of Iraq and the Levant (Leigh 2014; Abdelaziz 2014; Kaufman 2014)?

Oil taken from the Ajeel field is taken through ISIS controlled lands to Iran to be sold (“ISIS Begins Selling Crude Oil from Iraq’s Ajeel Oil Field” 2014). Another story notes ISIS is selling their oil to a NATO ally in Turkey (Guler Vilmaz 2014). Another story notes ISIS is selling its oil to Israel (“ISIS Terrorists Begin Selling Oil to Their Friends in Israel and Turkey” 2014). Since ISIS isn’t legitimized by the rest of the world, including major energy producing countries, they are unable to engage in standard economic practices of nation states. Their finances have largely been gained through bank robbery of central banks in Northern Iraq to include the capture of a significant amount of gold. It is believed their assets are around $2 billion in US Dollars. In order to generate revenue the self-declared caliphate must conduct trade with the world it seems to be at odds with. It’s emissaries have been able to dump the stolen crude on the black market for a lucrative price. The price of their black market oil has been significantly reduced at $12/Barrel (Aks Alser 2014) which has forced OPEC and Brent Crude prices to drop slightly below $100/Barrel (“OPEC ‘unruffled by Oil Price Slide'” 2014).

When the US directly benefits from this trade practice and the markets correct against the collusion of other state-owned oil consortiums, the US economy experiences growth. This cheap fuel source undermines monopolistic practices of OPEC politics and dumps cheap oil on the market which forces global prices down. Notably, the US has also had a recent boom in a domestic energy sector. The bottom line for Americans is that reduced energy costs help the American economy. This benefit isn’t just at the pump or when Americans pay their heating bill. When these costs benefit merchants and vendors who must also use the energy, there is a compounding effect on the cost to the economy that is positive. Overall, these savings translate to an increase in household discretionary income which helps the economy. If Americans want to increase jobs, then an increased demand for products and services that are made in America must occur and for this to happen more people need to have money to spend. Cheap energy is at the heart of this perspective because it increases the competitive advantage of American made products as well.

The bitter irony of an American adventure in Iraq’s Great Game, if the stories of ISIS genesis are true, is that the hawks on Iraqi oil are vindicated and discretionary house-hold income improves at the expense of a terrible humanitarian crisis. Chinese contracts are not serviced. Anti-Shi’ite movements create physical and political instability in Southern Iraq which is problematic for Tehran’s interests, who are often opposed to Washington’s, in Iraqi politics. These strange economic and political bedfellows that follow from this twist of fates, destroys Christian historic relics and fosters a genocide against ethnic minorities which include Christians and western journalists. Discretionary income in this perspective comes at a terrible price, that upon further review isn’t worth the price of intervention.


Howard L. Salter lives in Ocean Springs, Mississippi with his wife and four children. He enjoys recording music and writing and has a Bachelor’s of Science in Information Technology Management, a Mast of Arts in Intelligence Studies with a Focus on Antiterrorism and is working towards a PhD in Health Care Administration with a focus on Austrian economic theory and regulatory compliance.


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