The Islamic State collects around $80m a month from oil sales and tax on activities in areas under its control in Iraq and Syria, according new research released yesterday by IHS.
The information and analytics firm said Isis relies on six main sources of revenue, with more than 50 per cent coming from tax on all economic activities in their captured territories including electricity, mobile phone networks, retail, industry and agriculture.
The second biggest source of income comes from the production and smuggling of oil and gas (43 per cent) while the rest is made up of donations, the confiscation of land, drug trafficking, the running of small enterprises and criminal activities such as kidnap for ransom.
“Unlike al-Qaeda, the Islamic State has not been dependent on money from foreign donors, to avoid leaving it vulnerable to their influence,” said Columb Strack, senior analyst at IHS, and a lead analyst for the IHS Conflict Monitor said.
“Its business model, which is heavily focused on intermediaries and taking percentage cuts, also means that Isis is able to make profits from areas and sectors where it is not directly involved,” IHS analyst Ludovico Carlino, who also works for the IHS Conflict Monitor, added.
However there are signs that the US-led coalition’s efforts to target Isis’ sources of revenue through air strikes on oil fields are paying off.
UK jets carried out the second wave of air strikes Syria on Friday and destroyed an oil field controlled by Isis, just hours after Parliament voted in favour of a bombing campaign.
IHS’ Conflict Monitor said there were also signs that the extremist group is struggling to fund its rule, with reports of cuts to fighters’ salaries, price hikes on electricity and other basic services, and the introduction of new agricultural taxes.