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To Combat ISIS, Target its Oil Business in Syria

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A member of the Syrian government forces stands next to a well at Jazel oil field, near the ancient city of Palmyra in the east of Homs province after they retook the area from Islamic State (IS) group fighters on March 9, 2015Photograph by AFP/Getty Images

The Paris terror attacks came from a place of desperation, not strength, on the part of Islamic State (ISIS). Coalition forces, led by the United States, together with Kurdish militias, have scored a number of key military victories against the radical jihadists over the last few months, putting the so-called caliphate and its legions on the defensive for the first time since bursting on to the global scene last year.

Key to this turn of events is the ongoing and systematic destruction of the caliphate’s ability to produce and sell oil from fields it captured in eastern Syria last year. This is the source of its wealth and power. If the coalition wants to prevent more attacks like what took place in Paris, it will need to put an end to the sale and distribution of the oil enriching ISIS and its proxies.

While that might seem simple enough, (No, Mr. Trump, you can’t just “bomb the shit out of them”), it is actually fraught with complications and will require unprecedented commitment and cooperation.

The Paris attacks sent shock waves through the Western world. It wasn’t just because of the sheer number of people killed in the mayhem, which at last count stood at 129, but also because it was the first major terrorist attack by ISIS outside the Muslim world.

What does ISIS gain from slaughtering a bunch of Parisians far away from the battlefield? Was it simply to spread fear in the hearts of Westerners? Or was it to end the heretical practices of dining al fresco or attending rock concerts?

ISIS said the Bataclan Theater was targeted for its “hundreds of pagans gathered for a concert of prostitution and vice.” But while many think of terror groups as unpredictable and irrational, that usually isn’t the case. Attacks aren’t just random acts of violence; they are supposed to have meaning.

For example, in Al-Qaeda’s attack on the World Trade Center in 2001 and the IRA’s bombing of Canary Wharf in 1996, both groups set about to destroy symbols of wealth and prosperity, the funding engines that their enemies use to “oppress” them. It was more than just killing people. It was about sending a clear message that they are strong and capable of carrying out a rather sophisticated terror plot with symbolic importance.

It would have been one thing if ISIS planted a bomb outside of the Élysée Palace or set fire to the La Défense business district. But a drive-by shooting at a Cambodian restaurant on a Friday evening? That makes ISIS look like a bunch of thugs, not righteous warriors engaged in a moral crusade to “cleanse” Muslim lands of infidels.

So this all seems very desperate on the part of ISIS. This idea that they can terrorize the West to make them withdraw from ISIS-controlled territory isn’t the strategy of a winner but of a desperate soldier who knows that defeat is inevitable.

This spring, coalition forces led by the United States, in coordination with Kurdish armed forces and the Iraqi army, successfully pushed ISIS back and put them on the defensive. Islamic State lost much of the territory it gained in Iraq during the devastating campaigns of 2014, including the Ajil and Allas oil fields located in northeastern Iraq.

Since then, ISIS has basically been on the run. Kurdish militias finally united and took back more territory from Islamic State in the summer. And the fall of Sinjar this past weekend to the Kurdish alliance is quite significant as it splits the caliphate into two parts, severing communication and transportation links between forces in Iraq and Syria. The fall of Mosul, the largest town under ISIS control in Iraq, now seems inevitable. While ISIS and its affiliates will continue to terrorize the Middle East for years to come, the group’s dream of ruling over the Islamic world seems like a long shot at this point.

But things weren’t always so gloomy for the radical jihadists. Last year, ISIS was flourishing, taking territory in both Iraq and Syria. A band of no more than 800 ISIS soldiers caused an entire battalion of the Iraqi military, some 120,000 men, to flee in horror. They left behind plenty of brand new equipment and weapons given to them by the United States, including 2,300 armored Humvees and scores small arms.

ISIS has funded its ventures through various means, including extortion, donations, the selling of ancient artifacts, as well as by plain-old pillaging. But the bulk of its cash has come from exploiting captured oil fields, most of which are located in the sparsely populated Deir ez-Zor province in eastern Syria. Estimates of ISIS’ earnings from selling oil and refined products, such as gasoline and cooking gas, varies wildly, ranging from $1 million a day to $5 million a day. Indeed, ISIS most likely brings in far less than that, reaping somewhere in the hundreds of thousands every day, especially after losing control of its major oil assets in Iraq, a person with knowledge of the situation told Fortune. Nevertheless, the money, whatever the amount, has helped solidify the group’s control in Syria and needs to be eliminated as quickly as possible.

Last summer, when the coalition launched “Operation Inherent Resolve“, the U.S. military said it would target Syria’s energy infrastructure in a bid to cut the flow of money to ISIS. It set its sights on the infrastructure required to refine, or convert, crude oil into gasoline and other products. By the end of September, the Pentagon said it had effectively destroyed all the major refineries in eastern Syria.

While this was a good first step, it didn’t fully cut off the flow of money to ISIS, as the group was still able to sell crude oil, with the proceeds going straight to its war fund. The biggest conduit of ISIS crude are independent truckers, who either sell the crude off to other middle men or refine the oil themselves in a makeshift “mobile” refinery. Not exactly the most efficient or the safest way to refine oil, but it works, albeit on a small scale. Coalition forces say they are targeting the makeshift refineries but, given their small size, it is unlikely that they can destroy them all.

The crudely refined gasoline is later sold to independent gas stations across the caliphate, from which ISIS collects a tax. The rest is either smuggled across the Turkish border, where it is sold at local markets, or into the parts of Syria and Iraq that ISIS doesn’t control. So, yes, ISIS gasoline is probably flowing through the engines of its enemies, of which it has many.

Targeting the refining part of the oil value chain made sense, but it wasn’t enough to halt the flow of oil and refined products from eastern Syria. The coalition wanted to avoid totally destroying the infrastructure around the oil fields to minimize the amount of reconstruction that would need to be carried out after ISIS was taken out of the picture. This has worked in Iraq, as coalition forces have successfully liberated oil fields from ISIS virtually intact.

But the strategy hasn’t played out as successfully in Syria. Last month, the coalition changed tactics, launching Operation Tidal Wave II, which aims to cripple the ISIS oil industry. The goal is to bomb the Syrian oil fields hard enough that they can no longer be used by ISIS, but also soft enough that whatever damage is inflicted can later be easily repaired by professional oil companies. Sounds reasonable, but it may not be totally successful. While many of Syria’s oil professionals and engineers have fled the country, ISIS has somehow managed to keep the oil flowing. They have likely acquired the experts they need. With the right parts smuggled in, those experts could easily repair or contain the damage and have the field up in running in a matter of a few days.

The only way to wipe out the ISIS oil trade would be to take away all of its customers. This requires force and a lot of cooperation between the several factions combatting ISIS. Attaining this level of coordination will be the hardest part of the operation, but it’s possible, if the U.S. leads the way.

The coalition must first destroy Syria’s oil transportation network. If ISIS can’t get oil to its customers, then the crude might as well stay in the ground. Pipelines are the most obvious targets here, but chances are that most, if not all, of Syria’s pipelines are out of order. With a limited rail network to move crude, that leaves just one major target: tanker trucks.

ISIS has commandeered a number of tankers over the last year, which it uses to move its oil in and around its territory. Destroy the trucks, and you cripple ISIS’ oil business. On Monday, the U.S.-led coalition attacked a convoy of some 100 tanker trucks across Syria.

There’s a catch, though. The bulk of the oil being moved in and out of ISIS-occupied territory is by private truckers, most of whom have no affiliation with ISIS and are one-man shops. These truckers normally pay cash at the wellhead for the oil, so ISIS is usually the first paid in the oil value chain.

Attacking a few trucks as soon as they drive away from an oilfield would send a clear message to the truckers that it is no longer safe to fill up with ISIS. But killing civilians is never a good thing and runs counter to the U.S. military’s Rules of Engagement.

A viable alternative might be to invite the truckers to purchase oil, gasoline, and diesel at discounted prices from coalition-controlled oilfields and refineries in Iraq. They would then be encouraged to reenter (with air escorts) ISIS territory, putting them in direct competition with the group. All this cheap oil and gasoline would cause energy prices to fall rapidly across the caliphate, effectively destroying the local market for ISIS crude.

For this plan to be successful, Turkey needs to agree to seal its borders with Syria and Iraq and allow fellow NATO troops to be deployed to prevent smuggling. This would not only deliver a significant blow to the illicit oil trade but it would also serve as a way to limit the flow of migrants into Europe. The NATO presence would also create a temporary buffer between the Turkish military and Iraqi Kurds. This would help diffuse tensions between the two sides so that they can each focus their attacks on ISIS and not each other.

But this effort will fail in the absence of agreement from the foreign forces fighting in Syria that are not part of the U.S.-led coalition, particularly those of Russia and Iran. The political outcome of the Syrian revolution needs to take a backseat so long as ISIS remains a threat.

Coordinated action will hasten the fall of ISIS and its proxies in the region. While ISIS isn’t receiving market prices for its oil at the moment, it is still collecting enough money to fuel its violent efforts in Syria, Iraq, and the West, while engaging in terrorist attacks such as those seen in Paris last week. The oil trade in Syria needs to be shut down completely. The less money ISIS has in the bank, the less damage it can do.