The Islamic State group now rules a population of around 8 million and has to make around $6 million a day to keep up the services it offers to keep people dependent on it. Anything less, and ISIS could be vulnerable to a rival group taking over. But the more land the extremists manage to seize, the more moneymaking possibilities they have.
The U.S. Treasury Department called the group that seized large parts of Iraq and Syria and has jihadists all over the world pledging allegiance to it “among the most well-funded terrorist organizations in the world.” A Newsweek investigation into ISIS finances found the group makes most of its money by exploiting resources and looting historical sites in the territory it controls, combined with a steady cash flow from private donors and extortion of the captive population.
“At its heart, the ISIS money machine runs on the fear -- and greed -- of the millions of people it controls,” according to Newsweek.
The group's principal moneymakers -- and a major target of the U.S.-led coalition airstrikes -- are the various oil production centers it seized across Iraq and Syria. Newsweek estimated the ISIS oil empire stretches over territory that’s about the size of the U.K., including around 300 oil wells in Iraq and control over around 60 percent of Syria’s total production. In Iraq, the group produces just 80,000 barrels out of the country’s nearly 3 million barrel-a-day production, but as ISIS continues to make advances in Iraq, its oil production there could grow.
“ISIS seems to have zero problems moving fuel across borders,” Luay al-Khatteeb, visiting fellow of the Doha Brookings Center and director of the Iraq Energy Institute in Baghdad, told Newsweek. “If they really had a problem with fuel, by now we would have seen the Iraqi army advancing and pushing them to the border of Turkey.”
Private donors in the oil-rich Persian Gulf states also contribute to a large part of the militants’ finances, and money is funneled using fake humanitarian organizations, private messaging applications or sometimes just briefcases filled with cash, according to Newsweek.
“The transfers are made in cold cash or in the form of arms deliveries,” Haras Rafiq, head of outreach at a U.K.-based anti-radicalization think tank Quilliam Foundation, told Newsweek. “The physical transfer is usually delivered into Syria via the Turkish border, because it is much less perilous. Crossing into Iraq or Syria from the Saudi border is policed much more heavily.”
Kidnappings for ransom, seized bank accounts and human trafficking also contribute -- and those living under ISIS rule become increasingly dependent on militants for sustenance. When it seizes a city, ISIS imposes strict laws and taxes on the population.
Reports from the militants’ de-facto headquarters in Raqqa in eastern Syria claim the population living under ISIS rule is in such a dire financial situation that even children consider joining the extremist group for a decent meal. An International Business Times report found that many parents in the Syrian province are sometimes so desperate for sustenance that they sell their children to the group.
In Raqqa, the group “follows a policy of starvation in the city,” an anti-militant activist, Abu Ibrahim al-Raqqawi recently said in a Skype interview. “Because of this, the needy people of the city send their children to [ISIS training] camps for money.”