It has always been hard to accept the argument that the series of wars in the Middle East since 2001 have been about oil. Afghanistan is not an oil state and most of the oil which will be produced from Iraq will end up in China and the Far East rather than in the United States or Europe. On the other hand what is happening now in Syria and Northern Iraq shows that oil and power are inseparably linked.
As the FT reported in October, in building its caliphate Isis has not followed al-Qaeda in relying on donations from rich supporters in Saudi Arabia or other parts of the Persian Gulf. Instead the ISIS leadership created its own economic structure in the territories it controlled based almost entirely on oil revenue. Another report published in December recorded in fascinating detail how oil from fields such as al-Tamak and al-Omar in the eastern Syrian province of Deir Exxor and from the Qayyara field close to Mosul in northern Iraq made its way mostly in trucks to other parts of both countries and beyond. In an almost medieval economy, some was even carried in pans on the backs of mules or donkeys. Even rebels fighting Isis within Syria turned out to be dependent for their basic fuel supplies on purchases of illicit oil which helped to fund their opponents.
At one point, Isis was earning as much as $40m a month from oil, using a professional operation which was tightly controlled from the centre. That money allowed Isis to create the semblance of an effective government and no doubt also funded the purchase of arms and weaponry.