The territory controlled by the ISIS is vast and spreads across wide areas of Iraq and Syria. To date ISIS has proved resilient in the face of American airstrikes, Kurdish Peshmerga fighters, Iranian-backed Shia militias, battle-hardened Syrian rebels, Asad regime forces, and even other jihadist groups.
In 2014, ISIS surprised the world with a string of military victories in Iraq, even threatening the central government in Baghdad before American and Kurdish intervention. The swath of territory under their control has not shrunk by much since then.
So how can a paramilitary organization with no recognized trading partners maintain an economy, infrastructure, and sustained military campaigns on multiple fronts? By any means necessary, it appears. Some bloggers suggest Turkey is funding them, or the U.S. government, or even payday lenders. The reality is much more simple and ISIS remains one of the most well-funded paramilitary terrorist organizations ever, with an estimated net worth of $2 billion.
Here are ISIS’ 10 main sources of funding:
1. Oil Smuggling
ISIS captured oil wells all over Iraq and in Northern Syria in 2014. With refined gasoline running near $7.50 per gallon across the border in Turkey, any relief from those kinds of prices is a welcome relief, even if that cheap oil comes from a group like ISIS. The terror group controls 80,000 of Iraq’s total 3 million daily barrels of oil, but the area of oil fields under their control is the size of the UK. In Syria, ISIS controls sixty percent of total production capacity and is selling oil at a rock-bottom $25 per barrel. As of October 2015, the market price of oil was $43. Cross-border smuggling of cheap crude oil earns ISIS and estimated $1.5-3.6 million each day, maybe as high as $800 million each year.
2. Donations from Angel Investors
ISIS is a fundamentalist Sunni Islamist group. Their ideology is close to the Wahhabi brand of Islam espoused by the Kingdom of Saudi Arabia. It shouldn’t come as a surprise there are wealthy oil magnates in the Gulf’s Sunni monarchies, like Qatar, Kuwait, and United Arab Emirates who share ISIS’ core beliefs and are willing to send money to help them. Experts believe angel investors in Qatar are sending the largest portion of individual investments. Their interests may lie more in the overthrow of the regime of Bashar al-Asad, whose government supported Shia muslims in Syria. This income source comes to the tune of $40 million over the past two years.
3. Organized Crime
Calling ISIS “thugs” isn’t just a way of demeaning those who fight, work for, or otherwise support the group. As the only form of law enforcement in the areas under its control, ISIS has a “massive” organized crime operation. It demands large sums of money from those in its territory. Anyone who wants to start a business, withdraw from their bank account, or just be alive are taxed on almost every aspect of daily life. These taxes also extend to dams, granaries, and even oil fields. These taxes can be as high as ten percent per transaction. They’ve even been known to take necklaces and earrings off of women.
4. Looting Banks and Museums
When ISIS captured Mosul in 2014, it famously looted the central bank, cashing in on a large amount of money. It also loots smaller banks as it swarms through new territory under its control. In Mosul alone, ISIS took over 12 branches. All told, experts believe $1.5 billion was captured by the terror group in the past two years. Bank robbery plays a part, but the terror organization will also loot museums and sell valuable artifacts through towns on the Turkish border with Syria. 1/3 of Iraqi archeological sites are under ISIS control and the looting of these sites for artifacts to sell on the black market is the group’s second largest income source.
5. Hostages and Kidnapping
Capturing Westerners and other foreigners is a major source of income for ISIS. Knowing full well the group will fulfill its word to brutally murder those it captures, hostages for profit earns ISIS an estimated $12 million per month, and at least $20 million in 2014. American journalists Jim Foley and Steven Sotloff were held by ISIS for ransom, but because ransoming the men would have been illegal, their families didn’t pay and the two were beheaded. France is known to have paid $14 million for four captured journalists. For locals, the price is $500 to $200,000.
6. Illegal Drugs Sex Trafficking
An Iraqi in Qatar told Newsweek nearly 4,000 women and girls from the Yazidi minority in Iraqi were forced into marriage or sold for sex. There are many more women from other minorities. Girls as young as 14 are forced to either convert to Islam and be wives or be sold into slavery. Reports of cocaine and methamphetamine use are rampant, but more reliable reports indicate ISIS grows marijuana on the outskirts of major cities for sale in Turkey. ISIS is also known to smuggle cigarettes and alcohol, all of which is strictly forbidden under their brand of Islam.
Bitcoin is not a regulated currency, and Israeli intelligence agencies acknowledged they know ISIS is using the currency for fundraising efforts in the United States.
8. Fake Foreign Aid
Unregistered charities worldwide provide ISIS with a method of laundering money from various sources and donors, turning the money into “humanitarian aid.” Fighters will coordinate dropoffs of the aid payments through international data messaging services like Kik and WhatsApp. $11 million of fake aid came to ISIS through Qatar since the start of Syrian Civil War in 2011.
9. Internet Cafes
In Raqqa, the de facto capital of ISIS territory, there were less than 20 internet cafes in the city before the rise of ISIS. Since then, the number has grown to more than 500. According to Syrian activist group Raqqa Is Being Slaughtered Silently the city is now dependent on expensive satellite internet connections controlled by the militants.
10. Fines for Breaking Sharia Law (al-Hisbah)
The terror organization charges steep fines for breaking strict Islamic laws, for everything from smoking tobacco to arriving late to the mosque for prayers. As brutal as the group’s methods are, people living under ISIS rule can now pay fines to avoid torture or execution. Even actual crimes like theft and fraud can be mitigated with payments in Syrian currency.
ISIS burns through cash, spending on military hardware, equipment, infrastructure, safe houses, mass transportation, food, and its own high-quality media center, al-Hayat (the life) and a magazine called Dabiq, not to mention tens of thousands of fighters operating in the field. No matter how much the group spends, it makes an estimated $6 million from these sources every day. There may be no limit to how much the group can expend in its effort to further its ideology.