The extremist group calling itself Islamic State is by some accounts the richest army of terrorists in the world. However, it does not finance its weapons, money and organisation like a traditional terrorist group; it is largely self-funded. At first it lived mainly from wealthy donors in Gulf states.
Oil is its number one resource, sold illegally on the black market, is estimated to provide more than half its revenue. The pillaging of conquered territory pays dividends, as do extortion, kidnapping ransoms, human trafficking and other crime, including the selling of antiquities. ISIL still accepts donations.
As the sources are all in the shadows, none used openly, they’re harder to turn off.
US intelligence estimates oil gets ISIL three million dollars per day. To weaken this, the airstrikes have concentrated on knocking out oil facilities under ISIL’s control.
Yet paying for an army and administrating territory is costly.
Dubai-based Robin Mills, Head of consulting at Manaar Energy Consulting and Project Management, points out that sustaining the organisation’s ambitions is more complicated than waging war.
Mills puts into perspective ISIL’s illegal oil earnings: “If it is in the range of two to three million dollars a day, I think it is less, but let’s say that it is. That would be somewhere between 700 million to a billion US dollars a year. That is a huge amount of money for a terrorist group. It is a very small amount of money for a state, which this group says they are, and they have to run social services and keep some kind of basic economic activity going in the territories they control; in that case a billion dollars is really nothing in comparison to the money that was spent in these areas before this conflict.”
Persuading parties that buy the oil to stop would squeeze ISIL.
It is still has a great deal of cash — not sitting in bank accounts the coalition can freeze; that won’t run out overnight, but does need topping up.