RPT-How Islamic State uses Syria's oil to fuel its advances

Fri Sep 19, 2014 1:30am EDT
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(Repeats Thursday story with no changes)

* Islamic State tightens grip on oil-producing areas

* Militants estimated to get up to $2 mln in daily oil revenues

* Traders seeking profit re-sell oil in government-held areas

By Suleiman Al-Khalidi

AMMAN, Sept 18 (Reuters) - In an oil field in northeastern Syria, a queue of trucks lines up daily to load crude sold cheaply by Islamic State militants who have hijacked parts of the country's energy industry in their bid to build a caliphate.

Sales at Shadada field, described by an oil trader, are just one example of how the group, which has seized land in war-torn Syria and neighbouring Iraq, is creating its own economy through a series of pragmatic trades.

It is cutting deals with local traders and buyers, even businessmen who support Syrian President Bashar al-Assad, and some of its oil has made its way back to government buyers through a series of middlemen.

"Islamic State makes not less than $2 million daily that allows them to pay salaries and maintain their operations," said a former Western oil executive who worked in a foreign oil firm operating in Syria before the crisis and who is familiar with the nascent oil market.   Continued...