ISISCoalition’s campaign has seriously weakened ISIS financial position

The coalition’s airstrikes on ISIS-controlled oilfields, the recapturing of ISIS-held territory, and destruction of the group’s cash storage facilities – in which up to $800 million in cash went up in smoke — may have seriously undermined ISIS and its operations in Syria and Iraq, the coalition’s military commanders said.

Officials at the U.K Ministry of Dense said earlier this week that ISIS has increasingly been resorting to arbitrary fines, extortion, and gangster-like tactics to compensate for the shortfall in income.

Air Vice-Marshal Edward Stringer, the senior U.K. official in charge of disrupting ISIS finances, said: “What we are now seeing is that they are running short of cash and they are looking for more imaginative ways to do things. It is early days, but only in the last week we have heard from the sources that we have that the taxation system is becoming more arbitrary, more looking to fines, and so becoming less progressive and less easy to sell to the population.” He added that the gangsterism was damaging the ISIS brand.

Deputy U.S. commander for operations and intelligence, Maj. Gen. Peter E. Gersten, said up to $800 million held in ISIS storage facilities had been destroyed by coalition airstrikes.

He said the number of foreign fighters joining ISIS was down by 8 percent.

CNN reports that the assertions by the two officials are supported by evidence presented in a study by the Center for Combatting Terrorism.n  

The study shows that ISIS now has difficulties paying its fighters. These payments account for 60 percent of the organization’s costs.

The documents presented in the study show, for example, that even in oil-rich areas, confiscation now accounts for about 40 percent of ISIS income.

Stringer likened the financial anti-ISIS efforts to the economic warfare waged against Nazi Germany during the Second World War.

“ISIS is trying to get more hard cash through extortion of the local population,” Stringer said. “We are starting to see corruption and embezzlement among senior leaders, suggesting we are having success.”

The Ministry of Defense says that until recently, 40 percent of ISIS revenue came from oil, 40 percent from forms of taxation, and 20 percent from other sources such as sales of antiquities and profiteering in money markets.

The coalition’s sustained attacks on ISIS oil infrastructure have caused these proportions to change, leaving the split closer to 20/50/30.

To date, the coalition has conducted 1,216 air strikes against ISIS oil infrastructure, reducing production by 25 percent and revenues by 10 percent.

Stringer said: “We have stopped them getting oil out of the ground and transporting it. We have moved them from moving oil to selling it at the wellhead. The coalition has also targeted additives and chemicals that Isis needs to refine its oil products, and what is now being produced is ‘crude in every way’.”

Stringer noted, however, that much of ISIS’s crude oil is not shipped abroad, but sold within the ISIS-controlled territory. “It is nevertheless a major source of revenue, since there is a demand from local businesses and homes with generators,” Stringer said.

ISIS’s has lost about a quarter of the territory it used to control in Iraq, and 10 percent of the territory it used to control in Syria. The population under ISIS control has declined from 9 million to 6 million.

The cut in pay for foreign fighters has also reduced the number of them joining the organization. The Pentagon said that the number of such individuals entering ISIS territory had declined by 90 percent in the past year.

Gersten said: “When I first got here, we were seeing somewhere between 1,500 and 2,000 foreign fighters entering the fight. Now that we’ve been fighting this enemy for a year, our estimates are down to about 200. And we’re actually seeing an increase now in the desertion rates in these fighters. We’re seeing a fracture in their morale. We’re seeing their inability to pay.”

— Read more in Aymenn Al-Tamimi, A Caliphate under Strain: The Documentary Evidence, Center for Combatting Terrorism (22 April 2016)