MOSCOW, August 26 (RIA Novosti) - The Islamic State (IS) is considered the wealthiest terrorist organization globally makes over $2 million daily (more than $730 million a year) smuggling oil, Bloomberg reports citing Luay al-Khatteeb, a senior adviser to the federal parliament of Iraq for energy policy and economic reform.
IS controls 60% of the oil fields in Syria and the minor oil fields in northern Iraq (oil-rich areas are manly situated in the south of the country). According to estimates, militants control oil fields with a production capacity of 80,000 barrels a day, but they are likely to be selling far less, probably approximately 30,000 – 40,000 barrels a day, according to al-Khatteeb.
Although at the moment market price of crude oil exceeds $100 per barrel, IS has to sell it at a huge discount. The price range for IS oil is huge: militants likely sell it for as low as $10 in Iraq and up to $60 in Syria where middlemen are not involved, Foreign Policy reports.
IS militants transport crude oil through smuggling routes under their control to “Jordan via Anbar province, to Iran via Kurdistan, to Turkey via Mosul, to Syria's local market and to the Kurdistan region of Iraq, where most of it gets refined locally,” al-Khatteeb told CNN.
Taxing the population, extortion and bank robbery are other major sources of revenues for IS militants. According to Washington Post, they stole over $400 million from the bank in Mosul soon after taking over Iraq’s second largest city on June 10.
However, unlike other terrorist organizations, for instance, al-Qaida, Islamic State militants do not rely heavily on generous donations from wealthy individuals or states in the region. Kuwait, Qatar and Saudi Arabia have been accused of tacitly supporting the IS, according to the Washington Post.
Being self-sufficient means that Islamic State is not as vulnerable to outside pressure, because it is not “as integrated with the international financial system,” explains Matthew Levitt, a former US Treasury terrorism and financial intelligence official, as quoted by Bloomberg.
Islamic State uses the funds it generates by illegal means to finance its terrorist activity and recruit fighters from all over the world. IS reportedly recruited 6,000 people, including 1,000 foreigners, in July alone, according to al-Jazeera citing Syrian Observatory for Human Rights, a nongovernmental organization based in UK. The Doha-based broadcaster said that total number of IS fighters has exceeded 50,000 in Syria and 30,000 in Iraq.
Islamic State also uses its revenues to provide basic social and governance services, much like a traditional government, the Atlantic reported.
For instance, in the Syrian city of Raqqa, the militants’ stronghold, Islamic State members pay for various services for the poor and the elderly, subsidize staple foods and even control rent prices. IS “ability to provide fairly extensive services to the civilian population, has resulted in at least a tacit acceptance of the group’s control of the city by the civilian population,” Charles Lister, an analyst at the Brookings Doha Center, told PBS’ Frontline. Many acknowledge that is both strength and a potential weakness. If the group runs out of funds, local population may well turn on the militants.
Many say that launching airstrikes against IS militants and providing Kurdish Peshmerga with weapons to fight terrorists is not enough to stop IS advance. Essential element of the counterterrorism strategy involves straining IS finances.
Islamic State, formerly known as the Islamic State of Iraq and Greater Syria (ISIS), is a radical Sunni group that grew out of al-Qaeda in 2013. In June, IS launched a blitz offensive in Iraq seizing large swathes of land. Later that month IS militants announced that they established a caliphate on the territories they control in Iraq and Syria.