According to reports, ISIS has grown from a ragtag band of extremists to perhaps the most cash-rich and capable terror group in the world with a $2 billion jihadist network.
The scale of ISIS resources is unprecedented: A terrorist organization while ruthless, but still able to occupy large areas of territory, quickly… for example; it controls several major cities in Iraq, which it occupied in just three days, it holds parts of several other cities and continues to menace still other cities throughout Iraq and Syria: It’s quite an accomplishments.
According to reports some estimates of ISIS’s wealth are overstated, for example; the $2 billion estimate that’s been floating around is too high, but that’s not to say ISIS isn’t raking in a fair amount of cash– between $2 million and $4 million per day. ISIS is a wealthy terrorist movement or better yet an effective financial enterprise, which it run very much like a large-scale Mafia type protection rackets business across much of Iraq.
This group has fashioned a small army out of a mix of foreign and local fighters, established oil refining and trafficking operations, and even collects taxes. Despite longstanding rumors that ISIS has foreign patrons in Gulf States such as; Saudi Arabia, Kuwait and Qatar, there is little evidence that it ever depended on foreign largess.
While there may be some foreign money flowing to ISIS, stopping these transnational flows will not stymie the group. Whatever its international influences, ISIS raises most of its money from the territories it feeds off of, making the problem of beating back the group exceedingly difficult.
ISIS raises much of its money just as a well-organized criminal gang would: It smuggles, it extorts, it skims, it fences, it kidnaps and it shakes down.
Although supposedly religiously inspired, its actions are more like those of an organized criminal cult… To quote a U.S. mobster; you don’t get ahead just by being thugs but at some point you must also learn to be a racketeer as well.
ISIS’ most important revenue source is the smuggling of oil from the oil fields it controls in Syria and Iraq. It has been reported to control about a dozen oil fields along with several refineries. Estimates of revenue vary, but a range of $1 million to more than $2 million a day is reasonable.
ISIS is a formidable fund-raiser. To its disadvantage, the group is also a formidable spender. It pays regular salaries to members based on family size and even has promised to maintain those payments if the member is killed or captured.
It also pays rent for some members and medical expenses, maintains safe-houses and buys weapons and other equipment. As cash-based organization, it also has to guard against internal corruption, which is documented in the group’s own records.
Historically, ISIS’ main outside revenue has come in small donations from local and foreign supporters… And while donations from the Gulf countries may have been welcome additions, neutralizing donations from wealthy Gulf sources will have little effect on their activities.
ISIS is recognized as the richest terrorist organization in the world, ever. Iraqi officials estimate that the group now has about $2 billion in its war chest. What remains controversial is where bulk of its money comes from… Iraq’s Shiite-dominated government accuses Saudi Arabia of supporting the ISIS jihadis.
According to reports; there is no publicly accessible proof that governments of any state has been involved in the creation or financing of ISIS as an organisation.
Others take a different view. According to Günter Meyer; the most important source of ISIS financing to date has been support coming out of the Gulf states, primarily Saudi Arabia but also Qatar, Kuwait and United Arab Emirates.
Additional key financing sources are the oil fields of northern Syria: ISIS was able to get the oil fields under their control, where they use trucks to bring oil across the border into Turkey– oil is an important source of funding for them…
ISIS is largely able to fund itself, and it has established local networks in their occupied territories that generate a continuing flow of money, for example; systematic extortion of small businesses as well as large companies, such as; construction firms, and if the rumors are true, even local government representatives. Also, it levies taxes in the areas that it fully controls.
However, one of ISIS’ biggest financial coup so far was the looting of the central bank in Mosul, which brought them equivalent of about $429 million in cash. Additional banks in Mosul and other areas under ISIS control were also plundered… With $429 million, ISIS could pay 60,000 fighters $600 a month for a whole year.
Also, ISIS fighters looted much equipment that U.S. left for Iraq military, like; weapons, vehicles… Also, with their financial power, it’s relatively easy for ISIS to buy high-quality weapons on international armaments markets…
The interrogation of a trusted messenger for ISIS, led Iraqi commanders to a treasure trove of information on the terror group and its staggering $2 billion in finances.
According to officials; before Mosul, ISIS’ total cash and assets was about $875 million, then afterwards, with the money they robbed from banks and the value of the military supplies they looted, its estimated that they added another $1.5 billion to that.
In less than three years, the extremists morphed from a ragtag band of militants into the most cash-rich terror group in the world, and they are accomplishing these feats all by themselves– these are very industrious people. According to some intelligence officials; there are no state actors behind ISIS– they just don’t need one.
There is a small but steady flow of money to ISIS from rich ‘individuals’ in the Gulf with Qataris being the biggest suppliers, according to some U.S. officials. According to one expert; these rich individuals serve as ‘angel investors’ for the most violent militants, providing ‘seed money’ that helped launch ISIS and other jihadi groups.
These rich Arabs are like what ‘angel investors’ are to high-tech start-ups, except they are interested in starting up groups who want to stir up hatred: Groups like al-Nusrah and ISIS are better investments for them. The individuals act as high rollers early, providing seed money. Once the groups are on their feet, they are perfectly capable of raising funds through other means, like; kidnapping, oil smuggling, selling women into slavery.
According to intelligence official; any outside funding represents a small fraction of ISIS’s total annual income. The largest source of cash now is oil smuggling along the Turkish border, with ISIS leaders willing to sell oil for as little as $25 a barrel, a quarter of the going world price. Since other previously lucrative sources, such as; kidnapping for ransom… is not as profitable as it once was.
Much has been written about the support Islamic State (ISIS) has received from donors and sympathizers, particularly in the wealthy Gulf States. Indeed the accusation I hear most from those fighting ISIS in Iraq and Syria is that Qatar, Turkey and Saudi Arabia are solely responsible for the group’s existence.
But the truth is more complex and needs exploring… It’s true that some wealthy individuals from the Gulf have funded extremist groups in Syria, many taking bags of cash to Turkey and simply handing over millions of dollars at a time.
This was very common practice in 2012 and 2013 but has since diminished and is at most only a tiny percentage of the total income that flows into Islamic State coffers in 2014.
Islamic State (ISIS) has put in place what appear to be beginnings of quasi-state structures – ministries, law courts, even a rudimentary taxation system… ISIS has displayed a consistent pattern since it first began to take territory in early 2013.
Upon taking control of a town it quickly secures the water, flour and hydrocarbon resources of the area, centralizing distribution and thereby making local population dependent on it for survival.
To understand how the Islamic State economy functions is to delve into a murky world of middlemen and shady business dealings, in which ‘loyal ideologues’ on differing sides spot business opportunities and pounce upon them. ISIS exports about 9,000 barrels of oil per day at prices ranging from about $25-$45 (£15-£27): It’s a traditional war economy.
The point is that ISIS is essentially self-financing; it cannot be isolated and cut off from the world because it’s intimately tied into regional stability in a way that benefits not only itself, but also the people it controls.
ISIS uses oil wealth to help finance its terror operations. Here’s how they do it: According to ‘Iraq Energy Institute'; the army of radical Islamists controls production of 30,000 barrels of oil a day in Iraq and 50,000 barrels in Syria.
By selling the oil on the black market at a discounted price of $40 per barrel (compared to about $93/ barrel in free markets), ISIS takes in $3.2 million/day… According to James Phillips; oil revenue gives ISIS a solid economic base that sustains its continued expansion.
The oil revenue, which amounts to nearly $100 million/month, allows ISIS to fund its military, terrorist attacks– and attract recruits from around the world. To be successful in counter-terrorism efforts, Phillips said; U.S. and its allies must push the Islamic State out of the oil fields it has captured and disrupt its ability to smuggle the oil to foreign markets.
Here’s how Phillips said the ISIS oil operation works: ISIS sells oil to consumers in territory it controls, roughly the size of Maryland, inside Syria and Iraq. The terrorist group also sells oil to network of smugglers that developed in the 1990s during Iraqi dictator Saddam Hussein’s rule; that network smuggled oil out of Iraq to Turkey to avoid sanctions imposed by the UN.
ISIS also reportedly sells oil, through middlemen, to Assad regime… When it comes to making a fast buck, the Middle East has no shortage of ‘strange bedfellows’ willing to do business with each other.
The growth of ISIS has been quite incredible: They are armed with– modern weapons, large fighting army, and an effective organization. All of which is bought and paid with real money supplied through a highly sophisticated funding strategy.
According to Senator Rubio; ISIS’s criminal activities– robbery, extortion, and trafficking– have helped them become the best funded terrorist group in history. The wealth has helped expand their operational capacity and incentivized both local and foreign fighters to join them.
ISIS has the resources, weaponry, and operational safe havens to continue to threaten the stability of the region, as well as; U.S., Europe, other nations’ national security interests.
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