By Patrick B. Johnston, Colin P. Clarke
Editor’s Note: The Islamic State's control of territory and zealous fighters vaulted it to the top ranks of the world's most formidable terrorist groups. Less noticed, but tremendously important to the group's success, were its impressive financial resources gained from its control of territory in Iraq and Syria. As the Islamic State has lost ground in both countries, however, its financial future is also in flux. Patrick Johnston and Colin Clarke of RAND present several scenarios for the Islamic State's future operations, finances, and overall sustainability.
With operations against the Islamic State in Mosul continuing successfully, if slowly, much of the focus is shifting toward an impending assault on the city of Raqqa. The U.S.-led coalition has continued to reclaim territory from the Islamic State in Iraq and Syria, and the militant group’s finances have been weakened in the process.
After the Islamic State seized Mosul in summer 2014, it enjoyed the dubious honor of being the “richest terrorist group in the world.” But this distinction is gone: The United States and its allies have aggressively targeted the Islamic State’s finances and have made significant progress. Between late 2015 and the end of 2016, coalition aircraft struck 1,200 Islamic State oil tankers. A single raid destroyed 168 vehicles in December in Syria. A senior U.S. Treasury Department official stated that the Islamic State’s oil revenue was roughly halved, from an estimated $500 million in 2015 to an estimated $250 million in 2016.