ISIS impact in Iraq:Iraq has the fifth-largest oil reserve in the world. A majority of Iraq’s GDP comes from the oil industry, which is 93% of the government’s revenue.
However, in August 2014, the Prime Minister of Iraq, Nouri al- Maliki, stepped down; this caused many of the citizens in the North to be dissatisfied due to uneven distribution of the oil revenues. Iraq’s poor infrastructure eventually led to the rise of ISIS. ISIS has enforced that the Iraqi government is required to spend its income on armed forces and on the millions of refugees. The oil prices have dropped drastically which will lead to an economical deficit in Iraq.
Due to ISIS, the 2014 budget in Iraq was completely used only 10 months into the year. The impact of ISIS will will eventually lead to lower oil production thus leading to lower revenues. The rise of ISIS in Iraq leads to a trade conflict; this not only impacts Iraq, but it also has an effect on countries trying to trade with Iraq. ISIS owns multiple oil reserves in Northern Iraq. This terrorist group sells oil at the cheapest price in the black market: Priced at USD $30 per barrel.
Previously, a barrel was sold at USD $80 to USD $85. All the money made by the selling of oil is, in return, used to finance and expand this terrorist group. This allows for ISIS to get stronger and have an even bigger impact in its host nation, Iraq; in return, Iraq has a greater danger posed from ISIS and faces an even greater economical threat.Effect in TurkeyThe ISIS conflict will drastically affect trade between Turkey and Iraq. Turkey’s trade surplus with Iraq is likely to slow down due to the lower demand from Iraq. Also, trade routes have been impacted due to ISIS involvement. The routes have been blocked off, which forces trucks from Turkey to take different/ longer routes to Iraq.
This leaves little to no room for profit or even loss.Effect in Jordan and Lebanon20% of Jordan’s exports are transported to Iraq; The ISIS existence on the outer boundaries of Jordan can eventually lead to violence and conflict due to the conflict between ISIS and Jordan. This will eventually lead for Jordan to alter its money/ capital to the training of its armed forces. This government’s debt is already 85% of GDP; spending an enormous amount of money on military uses will lead to an increase in budget shortages.Effect in SyriaImpact of ISIS in Syria is very devastating since ISIS has control over the borders and inland ports located in Syria.
Due to this, Syria’s imports and exports to other places, including Iraq, have decreased drastically, eventually leading to shortages. Syria’s largest oil field, is also controlled by ISIS. Due to ISIS having control over the major industry and exports department, this leads Syria into a huge trade deficit. Massive inflation and an urge to trade are the results of terrorism in Syria.Effect in IranDue to the effect of ISIS and terrorism, the oil prices are very much below the profit margin. This leaves little to no room for Iran to balance its budget; this makes it harder for Iran to fight against terrorism.