Islamic State: the economy of the richest terrorist organization

(In collaboration with Termometro Politico)


According to Arab and Western officers, the Islamic State (IS) is the richest terrorist organization and is an unprecedented threat. IS has a sound financial base thanks to oil and raw materials smuggling, to inestimable antiques stolen from archaeological excavations and to 10% religious tax on the income of 8 million people.

The fortunes of IS largely depend on what still remains of Al Qaeda. It was initially thought to finance itself through donations from radical Muslims and others countries, by taking advantage of international networks, that is the most important source of propaganda. Donations from Arab-Muslim world and from sympathizers living in the West come from the Web but, according to “The Wall Street Journal”, the Islamic State is financing itself now.

David S. Cohen, the Under Secretary of the Treasury for Terrorism and Financial Intelligence of the United States, pointed his finger at Qatar and Kuwait, which would fund the extremist groups of IS and al-Nusra Front. However, it is only a small part compared with other criminal activities that produce millions of dollars every month.

Indeed, taxes on agricultural production and transportation expenses are collected from al-Raqqa (Syria) to Mossul (Iraq), as well as levies imposed on Christians and others religious minorities. IS does business with people from countries which it is at war with: it controls oil, wheat and antiques sales on a grey market with unusual buyers, like the Syrian Regime, to which it sells electricity after stealing dams and power stations, and Shiite, Kurdish, Lebanese and Iraqi businessmen.

Proceeds are a real problem for the countries that oppose the Islamic State: restrictions on economic activities funding the organization may produce a humanitarian crisis in war-torn countries. Hassan Abu Hanieh, an expert on Islamist groups, says that IS guerrillas “have a stable economy across their territory in Syria and Iraq”.

Ransoms are another type of receipts but they are less considerable compared with the domestic activities of IS.

In Syria, rebels control eight gas and oil field in the provinces of al-Raqqa and Deir el-Zor, according to what Syrian rebels, who policed the area, told. By what they got from these activities, they do business with citizens of countries which they are at war with.

“Their” price of a barrel of oil is between 26 and 35 dollars, sold to local businessmen, the Iraqi ones, or to refineries funded by Turkish, Lebanese or Iraqi people. Syrian rebels think the oil produced for Islamic State is between 30.000 and 70.000 barrels per day.

The foreign trade is supported by an extensive network of Kurdish dealers who transport oil to Iraqi Kurdistan and then they sell it to Turkish or Iraqi people. Dealers smuggle oil by transporting it to their countries and by selling it at lower prices than the local ones’, or by selling it to the Syrian government.

The amount of oil seized along Turkish-Syrian border has grown 300% since the start of the Syrian uprising in 2011, according to what the Minister of Foreign Affairs of Turkey said. A representative of the same Ministry declared: “We are trying to see how to stop the smuggling but the border is very difficult to police”.

UN sanctions have been the first international community move, in order to stop the profits and the operations of IS. Anyway, according to the experts on terrorism, it will be very hard to stop financing, considering the proceeds from local affairs.

Alexander Evans, head of the UN-team who investigates the financing of the IS, declared: “The measures against the Islamic State must take locals into account. New actions have to be weighed up in relation to the needs of the population that suffers under the Islamic State dominance”.

According to recovered balance, before the fall of Mosul, the organization had 875 million dollars and then 2 thousand million thanks to money stolen from banks and to purloined weapons.



Master’s degree in International Relations and European Studies (University of Messina)

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