U.S. bombing wider Islamic State oil supply chain - Obama nominee

The United States has stepped up the bombing of the Islamic State militant group's oil operations including drilling and trucking to go beyond hitting mostly mobile refineries, President Barack Obama's nominee for Assistant Secretary of State for energy said on Tuesday.

"What you've seen over the last few weeks is a stepped up approach that is not only more bombings, but a different kind of bombing," Amos Hochstein, currently energy envoy at the department, told the Senate Foreign Relations Committee.

About 43 percent of Islamic State's oil revenue has been affected by U.S.-led strikes over the past month, U.S. General Joe Dunford, chairman of the Joint Chiefs of Staff, said in testimony to a separate congressional panel.

A team from Hochstein's bureau at the State Department is working with the Defense Department to determine targets. In earlier bombings on the group, which is also known as ISIS and ISIL, the United States mostly hit mobile refineries and oil collection points.

That approach made sense at the time because the equipment turns oil into products with greater value, and it disrupted  revenue, Hochstein said. But the group adapted and fixed some infrastructure in rudimentary ways.

Now the United States is looking at the wider chain including oil production, refining, and trucking. Bombs have destroyed trucks in the last few weeks, he said.

Much of the revenue Islamic State gets from oil comes from the early stages of the supply chain, Hochstein said. The group uses oil not only for revenue but as a means of tightening its  control of the territory it holds in Iraq and Syria.

 

IRAN ALSO IN FOCUS

Since 2011, Hochstein has also worked at the State Department to reduce Iran's crude exports.

Assuming Tehran fulfils its agreements under the recent nuclear deal and sanctions are lifted, the country would be able to increase oil exports "by a significant amount in a fairly quick order," he said. But he does not expect it to return to its pre-2012 oil export level of 2.5 million barrels per day "all that quickly."

Oil markets are glutted. The Organization of Petroleum Exporting Countries is producing flat out in a fight for market share, and Iran has had to cannibalize some of its oil equipment to boost output in the face of sanctions.

Obama nominated Hochstein for the job in October. To be confirmed, he must first be approved by the Senate Foreign Relations panel and then by the full Senate. Dates for those votes have not been set.

Last update: Wed, 02/12/2015 - 00:29

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