BEIRUT, Dec 7, (AFP): The Islamic State group is pulling in some $80 million a month, mainly from levies and confiscations, but is struggling financially as strikes hit its oil infrastructure, analysis firm IHS said Monday. In a new report, IHS Conflict Monitor said that IS, unlike other jihadist groups such as al-Qaeda, does not need to rely on foreign funding as it can count on revenues from the large parts of Syria and Iraq under its control.
Using open source intelligence including social media and sources inside the countries, IHS said it estimates the group’s overall monthly income to be around $80 million (75 million euros) as of late 2015. About half the revenues come from levies and confiscations, with IS slapping a 20 percent charge on all services, IHS said.
Some 43 percent comes from oil sales and the rest from drug smuggling, electricity sales and donations. “IS controls the state so they tax the population, confiscate property, can produce income from state-run businesses and from oil and gas. Other terrorist groups don’t have that,” said Columb Strack, senior analyst at the London-based IHS. But other groups also do not have significant territory to rule, so “it’s not like they are making $80 million and spending all of that on weapons and building bombs,” he told AFP. IS seized control of significant parts of Syria and Iraq last year, declaring a selfstyled Islamic “caliphate” and committing widespread atrocities.
A US-led coalition launched air strikes against the group in Iraq in August 2014 and in Syria a month later, and Moscow launched its own strikes in Syria in September this year.
The group has not followed its sweeping offensive of 2014 with other major gains and IHS said it is now having trouble making ends meet. “There are early indications that the group is struggling to balance its budget, with reports of cuts to fighters’ salaries, price hikes on electricity and other basic services, and the introduction of new agricultural taxes,” IHS said.
It said the increasing targeting of oil infrastructure, including wells and tanker trucks, by US-led coalition and Russian warplanes was starting to have effect. “Air strikes have significantly degraded the group’s refining capacity and ability to transport oil via tanker convoys,” IHS said. Strack said IS was already starting to systematically charge residents for leaving its territory and, as it faces continued pressure, will be looking for other ways to raise funds. “They can also try to raise the price of electricity, mobile phone networks, Internet and all kind of public services they are expected to provide,” he said. “But people are already struggling to pay. It’s going to be a lot harder on the populations living within IS territories.”
Meanwhile, Iraqi Prime Minister Haider al-Abadi said Monday that most oil smuggled by the Islamic State group goes through Turkey, joining a chorus of countries linking it with the jihadists’ financing. During a meeting with Germany’s visiting foreign minister, Abadi stressed the “importance of stopping oil smuggling by (IS) terrorist gangs, the majority of which is smuggled via Turkey,” a statement from his office said. Relations with Ankara have improved since Abadi took office in 2014, but tensions remain over issues including the Syrian civil war, and more recently a row over a Turkish military deployment in northern Iraq. It is the latest in a series of accusations linking Turkey and oil smuggling by IS, which overran large parts of Iraq last year and also holds major territory in neighbouring Syria. Russia accused Turkish President Recep Tayyip Erdogan and his family of involvement in the IS oil trade, to which he responded that Russia was in fact involved. Iranian media then picked up Russia’s claims, prompting Erdogan to lash out at his Iranian counterpart. And Mohsen Rezaie, secretary of Iran’s Expediency Council, said Iranian military advisors on the ground in Iraq and Syria had images of IS oil trucks going to Turkey