Iraq Crisis: US Warns Buyers and Middlemen Involved in Isis Oil Trade

The US has warned Turkish and Kurdish middlemen involved in the lucrative Isis oil trade as the US is determined to choke the extremists' sources of funding.

A senior Treasury official also threatened to impose sanctions on those dealing with the Sunni extremists.

Isis is believed to be making $1m per day mainly from selling oil at heavily discounted prices.

"Last month, ISIL [Isis] was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey. It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey," US Treasury's Undersecretary David Cohen said while speaking at the Carnegie Endowment for International Peace.

Despite the Washington-led coalition's airstrikes on key Isis-controlled oil fields and refineries, the group is estimated to produce about 20,000 barrels of crude oil a day, according to the International Energy Agency.

The facilities were producing nearly three times the quantity before the airstrikes began.

The Treasury official added: "With the important exception of some state-sponsored terrorist organisations, ISIL is probably the best-funded terrorist organisation we have confronted."

"Airstrikes on ISIL oil refineries are threatening ISIL's supply networks and depriving it of fuel to sell or use itself. Our partners in the region, including Turkey and the Kurdistan Regional Government, are committed to preventing ISIL-derived oil from crossing their borders."

Meanwhile, the EU ambassador to Iraq, Jana Hybaskova, has said the Sunni insurgent organisation is not attempting to establish an Islamic State but only an "oil empire".

Speaking to the Czech daily Noviny, the diplomat said: "Isis seeks to control the oil wells in Syria, northern Iraq and possibly in Saudi Arabia, too... the main problem now is whether Isis plans for an invasion of parts of Saudi Arabia, especially that many people are likely to sympathise with extremist ideas inside the Kingdom."