ISIS, an extremist Islamic state in the Middle East, seems like just another terrorist movement in the ever-changing landscape of the Middle East but it could prove itself a bigger and stronger threat than others like Hamas and the Taliban. What makes ISIS different is with the way it is managed, it is able to sustain itself. The "Islamic State" is constantly expanding, taking over the Iraqi cities of Mosul and Fallujah, much of the Middle East, and even regions of Northern and Sub-Saharan Africa.
The group has averaged gaining "$2 million a day in captured petroleum" alone and unknown amounts of money from regional banks and even "protection payments" from other cities (Beschloss, 2014). This influx of money along with their growing membership (beginning at 10,000 but now estimated at around 30,000), ISIS appears to have become a long-term problem for NATO and the west as it can keep growing and gaining influence seemingly indefinitely.
ISIS, with its organized leadership and smart economic strategies, is constantly growing and can sustain itself with the spoils of the cities it takes over. In my opinion, one of the most alarming facts noted by Beschloss is that it is estimated that ISIS has control of and trades 80,000 barrels of oil a day (with prices around $100/barrel USD) so they not only have the money to operate their movement but also have an increasing grip on oil in the Middle East. Oil is obviously a product in high demand around the world and the U.S. is an explicitly stated enemy of ISIS so this isn't the best news for western oil prices. Granted the U.S. does import more from Canada than from the Middle East but in overall numbers, the U.S. spent $380 billion of the $700 billion total spent last year on imported petroleum. My rudimentary prediction would say that oil prices are likely to increase as ISIS control of oil increases and it appears that "10 of the last 11 recessions were preceded by spikes in oil prices" (Fuel Freedom). ISIS is now both a problem of political and economic interest and something needs to be done by NATO to counter their forward charge.
It will be interesting, and probably terrifying, to see how the control ISIS has over foreign oil will really affect the US gas prices. It's good that we were smart enough to realize that we should start getting oil from a country that is more stable and in control. The increase in gas prices, as we have experienced, would cause a huge problem, even though unemployment has been decreasing, that only means more and more people are driving or using some means of transportation to get to their jobs. This creates a greater demand for oil, so naturally prices will rise. Now with the possible threat of a potential shortage, should America be in a dire situation and need to import more gas from the Middle East and decide not to trade with ISIS so as to avoid supporting terrorism, we could see a tremendous spike in the price of gas.
ReplyDeleteI find this really interesting. Obviously prices will rise due to the high demand of oil, I wonder how much of an impact it will have on the economy, or society in general. It might cause some social unrest, people will want a change and those who can't afford it will have to prioritize what they spend their money on, or start using public transportation more.
ReplyDeleteThis is extremely concerning. I agree with Rachael in the sense that it is likely that we will see a spike in gas prices, especially because purchasing gas from ISIS would be supporting terrorism. As ISIS continues to gain control, I think it will be interesting to see if the government looks to find another oil provider or implement military intervention. Regardless, I believe either option will cause an increase in gas prices.
ReplyDeleteI agree and feel this is very concerning. Hopefully other countries will act morally and stop purchasing oil from ISIS. As every dollar spent there, is a dollar supporting terrorism. If there is an end to buying from ISIS then their income drastically falls and they could become a less powerful threat.
ReplyDeleteThis is a interesting point. People need to realize the effects that ISIS is going to have in the long run. The last thing people want is higher prices, especially on a product with such a high demand like oil. I think that we need to step in, take control of the situation, do whatever we have to do so ISIS can't cause any more trouble than they already have.
ReplyDeleteIt is surprising that countries are purchasing oil from such a terrible group and directly aiding terrorism. I also agree that with ISIS in control of oil, prices in the united states will rise. This terrorist group is now casing both economic and political problems and there are countries who are supporting them which is extremely disappointing.
ReplyDeleteWhile this is problematic overall, and terrorism is a major issue, so far this isn't barreling towards having a widespread impact on world economics, so to speak. (Where the money is going to be SPENT, on the other hand, could.) 80,000 barrels is only roughly 1% of the oil the United States ALONE imports daily, and they are being sold roughly at market price. However, if ISIS continues to expand, this could become more and more problematic.
ReplyDeleteCalvin, I think that is a very important point regarding the proportion of oil that ISIS currently controls when compared to the total importation of oil in the United States.
ReplyDeleteThe obsession with inexpensive gas in the United States is frightening. As several others have stated, it is an unnerving concept that countries are purchasing oil from a group such as ISIS. But is this really surprising? The United States has been purchasing petroleum from OPEC for years, and now fracking is becoming more commonplace our own country. While it would be nice for our government to act morally, and refuse to produce/purchase oil from questionable sources, it would be shocking if this were to ever happen. In order for this to occur, we would have to accept much higher prices for gas. And what a paradigm shift that would require in the United States. There is no win-win situation. It is easy to blame our government in order to depersonalize and remove ourselves from the ickiness of it, but it is a decision that we have made. We make these same type of decisions when we choose to shop at Walmart or buy diamonds, by the way. It is incredibly prevalent, and probably unlikely to change.