Illicit oil sales are no longer the main source of revenue for the Islamic State, according to a Pentagon statement earlier this week. “Oil smuggling had become a crucial source of revenue for the group, which holds a handful of oil fields in Iraq and Syria. Oil profits set the extremist organization apart from other terrorist groups that are more reliant on outside donations. But oil production is also a vulnerability for the group, as it provided the U.S.-led coalition with relatively easy targets to hit with airstrikes.

Over the summer, before U.S. airstrikes began, the Islamic State was believed to be producing more than 80,000 barrels a day. Because it was selling the oil on the black market, the group took a major discount compared to global market prices, but experts still estimated it was collecting between an estimated $1 million to $3 million a day.

Kirby said he did not know how long it had been since oil was no longer the top revenue source, but cited donations and other black-market sales as other valuable streams of money.” [Foreign Policy]

Weak oil demand growth will sustain the current price crisis until consumer demand increases in countries apart from the United States, where demand has risen due to falling prices. “One of the main factors that will determine the depth and duration of the current slump in oil prices is the extent and timing of a resulting rebound in demand. It is likely to occur first in countries like the US, where fuel taxes are low and consumers see the results of lower oil prices at the gas pump relatively quickly–a $1.65 per gallon drop already, since June. However, other factors besides taxes could impede faster demand growth elsewhere.  [The Energy Collective]

Chaparral Energy Inc., an Oklahoma City based oil and gas producer, laid off 121 employees this week as the oil price crisis continues to affect employment in oil dependent states such as Oklahoma and Texas. “We are taking proactive measures to ensure the financial strength of our company given the current market,” CEO Mark Fischer said in a statement.

“While we expect the market to rebound to a more economically favorable level, we cannot predict when that will occur,” Fischer said. As of the end of 2012, Chaparral had 746 full-time employees, including 351 at its Oklahoma City headquarters, according to the company’s most recent annual report. [NewsOK]