Skip to main content
KBS_Icon_questionmark link-ico

Go to…

ISIS fighters hero

The state of ISIS finances revealed

Researchers at the  International Centre for the Study of Radicalisation (ICSR)  have collaborated with EY’s Fraud Investigation & Dispute Services team on a report that found  Islamic State’s income has more than halved since 2014.

The new report forms part of the centre’s pioneering research into terrorism and radicalisation that has evolved significantly over the last few years and seen impact on an international scale.

The team conducted in-depth interviews with officials and experts and reviewed dozens of public statements, internal ISIS documents, parliamentary testimonies and think tank, government and media reports in order to better understand the group’s financial situation.

Whilst it is impossible to say exactly how much money Islamic State has at its disposal, findings show that the most significant sources of revenue are closely tied to the territory it controls. Most recent evidence suggests that total income from taxes/extortion, oil, kidnapping, antiquities, looting and confiscations has decreased from up to $2 billion in 2014 to less than $800 million in 2016. There is also no evidence that the group has been successful in creating new sources of revenue. 

As well as shrinking territory, the researchers suggest that ISIS’s economic model has relied heavily on ‘relentless’ territorial expansion to fine populations and seize assets and highlight the significance of the ongoing battle to reclaim Mosul from Islamic State. Subsequent action by The Global Coalition to Counter ISIL, such as the launch of Operation Tidal Wave II in October of 2015, has also been pivotal in destroying the infrastructure and key transportation systems integral to the Islamic State’s financial fortunes. 

John Holland-McCowan , PhD Candidate in the Department of War Studies at King’s and Research Fellow at ICSR, led the research and said: ‘We have reason to believe that re-capturing territory from the Islamic State is having a dramatic impact on its financial situation. However, the group and its predecessor, Al-Qaeda in Iraq, have demonstrated an ability to operate under much tighter financial constraints. As a result, these declining figures do not mean that they will be unable to carry out terrorist attacks outside, or within, their territory in the future.’

Professor  Peter Neumann, Director of ICSR, said: ‘It is very difficult to accurately quantify Islamic State’s financial situation but terrorist operations are often cheap and funded on an ad hoc basis. There is good reason to believe that financial revenue will continue to decline as territorial progress is made and the loss of Mosul may come to be particularly significant. Whilst this is evidence that efforts to combat such streams of revenue are succeeding, it is far too early to declare victory.’

Another  recent paper published by the ICSR  translated and analysed a 55-page document compiled and published by the Islamic State in 2016, which offered a unique window into the mind-set of Abu Bakr al-Baghdadi’s propagandists. The document showed evidence of a coherent narrative that is, at once, positive and alternative with the mainstream media considered an effective weapon by the Islamic State.

Interested in finding out more? The ICSR is an independent and non-partisan research centre based in the Department of War Studies at King’s College London:  http://icsr.info/