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Video Shows Islamic State Attacking Iraqi Refinery — But Their Oil Money Might be Running Dry

The assault on a major refinery in the northern city of Baiji comes after reports claiming the Islamic State has abandoned three major oil fields elsewhere in Iraq.

by Gillian Mohney
Apr 12 2015, 4:30pm

Photo by YouTube/Aamaq News

Video released this weekend appears to show Islamic State fighters attacking Iraq's largest oil refinery in the northern city of Baiji, an assault that comes just days after reports claiming the group has abandoned three major oil fields elsewhere in the country.

The footage was posted by Aamaq News, an activist group sympathetic with the Islamic State. It shows a fierce firefight that was reportedly just one part of an attack that included several suicide bombers as the militants attempted to capture the major refinery, which is located about 200 miles north of Baghdad.

In the video, the Islamic State fighters appear to breach a wall into the Baiji compound and then walk through the refinery. The video claims the Islamic State seized half the facility, but Iraqi forces claimed Sunday they remain in total control. 

Related: Tikrit Refugees Caught In the Middle 

An unnamed Iraqi general told AFP on Saturday that 20 militant fighters were killed in the attack, and that the fighting was "the fiercest since we broke the siege a few months ago."

"Three suicide attackers were able to reach the entrances of the refinery. Two were killed but one managed to blow himself up," the general reportedly said.

The general said the militants were repelled after attacking a village south of the refinery, a housing compound for refinery employees, and a smaller facility to the east of Baiji.

"Daesh is trying to send the message that they are everywhere but in fact they are defeated and cannot advance," he said, using an acronym for the Islamic State's name in Arabic.

Multiple reports in German media have cited information from Germany's BND intelligence agency as saying the Islamic State has recently lost "at least three large oil fields" in Iraq, leaving the group to control only the Qayara oil field, which is capable of producing just 2,000 barrels a day. By comparison, the Baiji refinery used to produce up to 300,000 barrels per day, according to AFP. 

Related: Forensic teams exhume mass Tikrit graves

Satellite imagery from last month reportedly showed that the Islamic State set fire to two major oil fields northeast of Tikrit and destroyed extraction equipment amid a counteroffensive by Kurdish Peshmerga groups, Iraqi security forces, and militias. The Islamic State's oil production capacity is now said to be just 5 percent of what it was previously.

The German newspaper reports said the recent losses mean the Islamic State "can hardly sell oil" anymore, and is becoming increasingly reliant on ransom demands and the smuggling and sale of antiques to generate revenue.

A February 2015 report by the Financial Action Task Force (FATF), an independent inter-governmental body that works to stop money laundering and terrorist financing, said the Islamic State "obtains the vast majority of its revenues through local criminal and extortion activities in the territory where it operates."

The FATF said the Islamic State has also apparently "been engaging in energy-related commerce with the Syrian regime, despite claiming otherwise." Unlike al Qaeda, the FATF said, the Islamic State "currently derives a relatively small share of its funds from deep-pocket donors (relative to its other revenue sources), and thus does not depend principally on transferring money across international borders."

Follow Gillian Mohney on Twitter: @gillianmohney