ISIS is now the wealthiest terrorist organization on the planet, according to Foreign Policy. And the Al Qaeda offshoot has the ambition and perhaps even the organization needed to put its piles of oil and smuggling-related profits to work, as its several-hundred page-long annual report from this past March demonstrates.
For example, ISIS brings in nearly $12 million a month in revenues from extortion and other shady practices in the Iraqi city of Mosul alone in addition to $1 million to $3 million a day selling oil illegally.
Some experts believe that the group's power is virtually unprecedented, at least among jihadist organizations. According to Janine Davidson and Emerson Brookings of the Council on Foreign Relations, ISIS sits atop "a volume of resources and territory unmatched in the history of extremist organizations." The group controls approximately 60% of Syria's oil fields and several oil producing assets in Iraq.
Luay Al-Khatteeb, founder of the Iraq Energy Institute and visiting fellow at the Brookings Institution, estimates ISIS's total revenue from oil production at approximately $2 million a day.
Oil Wealth
"Put simply, ISIS is in a position to smuggle over 30,000 barrels of crude oil a day to neighboring territories and countries at a price of between $25 to $60 per barrel depending on the number of middle-men involved,"Khatteeb wrote for Brookings.
ISIS allegedly sells much of its oil production to intermediaries in Syria, who then transport it to refineries in Turkey, Iran, and Kurdistan, Foreign Policy reported.
Robin Mills, a director at Manaar Energy and author of The Myth Of The Oil Crisis, explained that individuals and nations involved in the sale of oil on the black market would be open to U.S. and EU sanctions as well as Iraqi legal action, if the state were ever to re-establish control over areas that ISIS now rules.
"The practical impact of this may not be much given the small volumes and the difficulty of tracking buyers and sellers," Mills told Business Insider by email.
Control Of Water, Wheat, And Electricity
Oil isn't the only resource that ISIS has leveraged to its advantage. In a recent interview with Der Spiegel, Brookings Doha Center fellow Charles Lister explains how ISIS uses its control of food and water supplies to further its goals:
Money is key here. It is well-known that the IS is almost entirely self-financed. Its money comes from the control and illicit sale of oil and gas, agricultural products like wheat, the control of water and electricity and from imposing taxes within areas it controls. It is literally earning millions of dollars each week, and a great deal of this money is pumped into social services.
ISIS's advance throughout northern Iraq has put vast quantities of prime farmland under the control of the militant organization. Large portions of five of Iraq's most fertile provinces are currently under ISIS control.
These provinces are collectively responsible for producing 40% of the country's wheat crop. The militants have also raided between 40,000 and 50,000 tons of grain from government silos in the north of the country.
Al Arabiya reported that ISIS has transported at least 700 tons of grain from western Iraq into Syria for milling and refining. ISIS then proceeded to sell the grain to the Iraqi government through third-parties in order to raise further funds.
ISIS has expanded this effort recently by making flour using the grain it stole from government mills throughout Mosul.
#ISIS Began producing flour from government mills in #Mosul,and libel it under their name. pic.twitter.com/JgCnqglAbS
— Ammar karim (@ammar_afp) August 27, 2014A source at Iraq's Agricultural Ministry told Reuters that ISIS has placed close to 30% of Iraq's entire farm production at risk.
This scarcity and food insecurity has driven up prices and increased the windfall that ISIS receives from its wheat trade.
Control of water resoucres and hydroelectric power stations provide further funding for ISIS.
The control of massive pieces of infrastructure, such as the Tabqa Dam outside of ISIS's de facto capital of Raqqah, Syria, along with the group's short-lived seizure of the Mosul Dam in Iraq, further demonstrates ISIS's capabilities and ambitions.
Ariel I. Ahram, an assistant professor at Virginia Tech's School of Public and International Affairs, notes that the Tabqa Dam provides a steady stream of revenue for ISIS.
The dam generates electricity for Aleppo and the surrounding region. ISIS fighters made sure that the dam's staff was left relatively unmolested, in order to ensure that the dam remained operational.
A Mafia-Like Organization
ISIS collects taxes on a variety of commercial items, such as trucks and cellphone towers, according to Ahram. Raqqa's Credit Bank has transformed into a functioning tax authority, with shop owners paying $20 every two months to ISIS in exchange for utilities and security.
ISIS functions a lot like a criminal syndicate. "The group is like the Mafia. It really doesn’t discriminate in how it gets its money," Colin Clarke, an associate political scientist at Rand Corporation, told CBC News. "Anything that's a revenue-generating activity, this group is engaged in."
ISIS has branched out into for-profit crime, engaging in extortion, carjacking, and kidnapping. Kidnappings have become an especially lucrative source of funding for the organization as the group targets foreigners, an attempts to ransom them.
ISIS demanded a $123 million ransom for journalist James Foley before executing him. The militants have set a $6.6 million ransom for the release of an American aid worker they had kidnapped in Syria.
As ISIS militants continue to rule sections in Syria and Iraq, these history-rich regions have spurred a black market for ancient artifacts, which ISIS has reportedly taken advantage of. One senior intelligence official told The Guardian that ISIS (back when it was known as the Islamic State of Iraq) had used looted antiquities as a revenue source when its members began moving into eastern Syria in late 2012.
In all, estimates place ISIS' total revenue at somewhere between $1 million and $4 million daily. Some of that money goes towards paying fighters and building their "caliphate" to resemble something like an actual state. But the group has a massive and ever-growing war chest to match its weapons stocks, territorial domain, and propaganda.
It's little wonder that some commentators believe the group could become more dangerous than Al Qaeda itself.
SEE ALSO: Five myths about the Islamic State