Money and Power: Who Funds The Islamic State?

How is the extremist group the Islamic State funded? Power and wealth go hand-in-hand, so someone, or something, is funding the terrorist group.

The brutal Jihadists, who have written handbooks on how to properly sexually assault sex slaves, have declared a type of war on the United States and its allies that is hard to deny. Their forces are many and powerful, and one popular way of tactical defense in war is cutting off the enemy’s economic sources. But first, we must learn what they are.

According to The Economist, IS is one of the best-financed terrorist organizations in the world, except for state-backed ones. There is no credible estimate of the secretive group’s net worth that can be confirmed, but in October, 2014 an American official described it as gathering money at “a pretty massive clip.”

The Islamic State pays fighters around $400 a month, which is more than Syrian rebel groups or the Iraqi government offer. Obviously, ISIS has no trouble purchasing weaponry, either on the black market or from corrupt officials or militias. It is even loyal in services to those who have behooved them in some way, paying schoolteachers and providing for the poor and widowed. Where does the funding come from?

First, we must understand who ISIS is. They are simply the most recent evolution of al-Qaeda in Iraq, and predecessors have not expanded so rapidly. It only presented itself in its current state in March, 2013 when it expanded into Syria from Iraq, when presumably it became a break off of al-Qaeda. It has since fought to take over land in both Syria and Iraq. In June, 2014 it took over political control in Mosul, Iraq’s second largest city, an area that is home to approximately six million people. Due to its extraordinary expanse and power, fighters have scurried to join the group. By September, 2014, it was estimated to have 30,000 men and women. Fifteen thousand of those are thought to be foreign fighters.

Other terrorist groups have relied on rich supporters and heavily upon donations. Not ISIS. The Islamic State largely funds itself, although it does get donations from sympathizers. Instead, the majority of its money comes from oil revenues from fields under ISIS control in western Iraq and eastern Syria. American officials estimate that it was making $2 million a day from oil before air strikes began, but in December, an official said the strikes, some of which have been against oil facilities in Syria, meant the group’s oil revenues had “significantly” dropped.

Controlling so much land also helps IS make money from extortion and taxing people in the areas it controls, however they desire. Like other jihadist groups, it has learned that kidnapping and human trafficking can be profitable. It is estimated that last year alone, ISIS profited $20 million from ransoms paid for hostages, including several French and Spanish journalists.

In order to take control of ISIS, the U.S. and her allies must take control of their funds. That is why the coalition continues to attack the sources of its revenue in oil fields, as well as stopping the group from advancing militarily. America and its allies have carried out air strikes on IS-controlled oil refineries in Syria. America and Britain, which have a strict policy against paying ransoms for hostages, are pressuring European countries to adopt the same policy of not negotiating with terrorists, though the United States has been accused of doing just that as well. Sanctions are critical to stopping ISIS and terrorist political gain, which several countries have adopted, but many more need to apply sanctions to its arsenal against IS.

It’s difficult to strategize any war, but this is a situation that seems especially daunting. Without taking away all of its large monetary sources, the Islamic State will continue to fund terror.