ISIS Financially Unstable from Shrinking Revenue Streams

Executive Summary:

ISIS has become financially unstable over the past 12 months and the researcher estimates that ISIS has a $245 million annual deficit. This is due to shrinking revenue streams, the destruction of stockpiled money, and the increased costs of maintaining a military force that is being rapidly destroyed and operating costs associated with governing over held territory. This is despite the high amount of revenue the group has gained from extorted taxes, oil, and other sources.



The Islamic State (IS, ISIS, ISIL, or Daesh) is one of the largest currently operating terror

Figure 1 - ISIS held areas in Iraq and Syria as reported by IHS Janes in BBC.
Figure 1 – ISIS held areas in Iraq and Syria as reported by IHS Janes in BBC.

groups and one of the only to officially control and govern territory.  The group is responsible for a high number of terror attacks in the Western Asia, Northern Africa, and Europe since at least 2011.[1] The group primarily operates in Iraq and Syria but also has some international presence.[2]  The international community has banded together in a concerted effort to eliminate the group because of the internationally condemned actions of the group.[3]

ISIS currently controls large swaths of land in both Iraq and Syria (see Figure 1).  Despite approaching coalition forces advancing on held territory in Iraq and Syria, the group still boasts between 15,000 and 20,000 adherents.[4]  The group also has a large amount of weapons and military equipment stolen from Iraqi military facilities.[5] Over the course of its lifetime, ISIS has been able to amass a large amount of assets and revenue from a diverse number of sources, however, because of the groups large size and the fact that it actually controls and governs over territory, the group also has a high amount of operating costs.

Assets and Revenue Streams:

The Islamic State controls an eclectic mix of revenue streams that it uses to fund its operations.  ISIS has gained money from bank robbery, false charities, extortion, and the black market sales of oil and human organs.  The group has controlled several oil field in both Iraq

and Syria and were able to obtain, at its highest peak, around $50 million a month.[6]

Figure 2 - Current revenue streams that ISIS controls.
Figure 2 – Current revenue streams that ISIS controls.

While ISIS has lost most, if not all, its oil assets in Iraq, it does still control a significant amount of oil produced in Syria; an estimated $315 million per year.[7] This was initially one of its primary revenue sources, however, because of the destruction of many of its wells as well as the advancing coalition forces in Iraq, the organization has had to find new sources of cash. [8]

ISIS imposes taxes and fines on individuals living within its territory.  In 2015 extortion was the source of roughly 33% of its operating revenue.[9] The current amount estimate that ISIS generates from this source is around $650 million per year.[10]

ISIS also has a number of contributors that donate money to the organization.  These contributors are generally from several countries around the middle east but has become more limited due to stricter regulations and safeguards set against the practice.[11] It was estimated that the organization raised $50 million from private donations in 2015, but this amount has likely significantly decreased due to losses in territory control and assets by ISIS in the latter months of 2016.[12]

ISIS has also implemented some more creative ways of raising money for maintaining their operations. One of these is the harvesting of organs, especially kidneys, for sale on the black market. The organization harvested 85 organs in one month from hospitals in Nineveh, Iraq.[13]  Assuming this is the average collection per month this would mean that ISIS garners roughly $5.1 million per year from the black market sale of organs.[14]


The Islamic State controls a significantly large amount of territory, is maintaining an army of 15,000 – 20,000, and is engaged in an active conflict in two countries.  All of these factors create significant expenses for the group.  The group has a high amount of operating costs because of the amount of services and operational needs of the organization as a whole.

Figure 3 - Estimate ISIS annual costs
Figure 3 – Estimate ISIS annual costs

While many of the kinds of operational cost sources are known, it is not known the exact amount that ISIS spends on each of the expenses.  In addition, some expenses are difficult to quantify for a fiscal year-type expense report, such as the destruction of stockpiled cash.[15] For this reason many of the analytical estimates are made based on limited evidence and base assumptions.

One of the most significant expenses that ISIS currently has is its personnel costs.[16] ISIS pays each of its estimated 15,000 – 20,000 soldiers[17] a minimum of $400 per month.[18]  This amount for soldiers creates an estimate cost of $126 million per year for just salary.[19] For its internal security forces, including its religious police, specialized security, and other specialized groups, the Center for the Analysis of Terrorism (CAT) estimates ISIS annually spends tens of millions.[20] ISIS also pays its oil engineers significant sums for the maintenance of its equipment.  The last published number of oil engineers was 275 and each were paid between $300 and $1000 per day equating to an estimate of $6.6 million per year.[21]

The costs of arming a group for consistent conflict is also expensive and difficult to maintain.  For just munitions for the ongoing conflict the estimate cost is about one million dollars per week.[22]  Weapons are also expensive to maintain and replace.  With the loss of some 1,500 – 2,000 fighters per month, it is assumed that many of the weapons the fallen fighters’ weapons will need to be replaced.[23]  As many of these weapons are the standard AK-47 with a price range of $800 – $2,000 these expenses add up quickly to a total of around $1.5 million per month.[24] This is just the cost for the most basic weapon used by the organization in its fight against several large military forces bearing down on it.  While the organization has acquired a significant amount of sophisticated military equipment ranging from small arms and antiaircraft equipment to tanks and large artillery, much of this equipment is difficult to replace as many of the larger items were acquired from stolen military facilities.[25]

One large operating cost that the Islamic State has that is similar to many businesses is marketing.  In order to replace fallen soldiers and to spread its message, ISIS produces around 800 videos annually and has twenty magazines it publishes regularly.[26] These videos and publication are made to a professional quality and because of this are expensive to maintain.  These marketing expenses are, however, necessary for the group to be able to recruit new soldiers.  For these expenses, the researcher estimates that an average of $5,500 per video for production, editing, and distribution, and an average of $30,000 is spent annually on each magazine for production, printing, and distribution. These equate to an annual cost of $5 million.

Operating a large governing area is an expensive endeavor for even a government that is operating with international legitimacy and support.  For just the areas that ISIS controls in Iraq, the Iraqi government was spending an average of $2.6 billion per year.[27] While ISIS is not capable of this kind of spending given its now limited amounts of income, the group still has to provide electrical power for use by businesses, medical facilities, as well as for its own operational centers and for communications.  ISIS has significantly reduced their spending on non-military operations because of limited funds, for a conservative estimate on the amount that ISIS still needs to spend to make its controlled territory to continue to function the researcher will use $1 billion per year. This estimated amount includes fuel, electricity, medical supplies, public transportation (where still operational) and building maintenance.

The Islamic State bears some costs that are difficult to calculate as consistent expenses.  These include costs such as direct monetary losses incurred from strikes on buildings used for storing money.  As of April 2016, coalition airstrikes destroyed about $500 million in cash from attacks on cash storage warehouses.[28]


The Islamic State controls a significant amount of resources and stands as a threat to global security, however, because of both of these factors the group incurs some significant costs just to continue its operations.  It is estimated that ISIS is running a $245 million annual deficit.  Many terror groups operate as cells rather than actually holding territory.  As it does for many governments, controlling territory and maintaining an active population within that area is an expensive endeavor.  In addition to regular operating costs, dedicating resources to an active conflict with multiple fronts against powerful enemies is difficult and expensive, especially when your enemies have superior air power and can easily conduct bombing runs within held territories.  The Islamic State is losing money quickly and its revenue sources are drying up. The costs of war are high and the funds needed to maintain are not available.  It is unlikely that ISIS will be able to continue to operate as a pseudo-state for much longer because it cannot afford day to day operational expenses within its held territories.

Figure 4 - ISIS is operating under an estimated $245 million deficit.
Figure 4 – ISIS is operating under an estimated $245 million deficit.

Analytic Confidence:

Analytic confidence for this assessment is moderate – low.  The analyst used a financial analysis.  Source reliability is high with little conflict between sources however some of the information was older than ideally desired. There was also a large information gap meaning that much of the data used for analysis was estimated with rudimentary assumptions.  The analyst’s experience in low and worked alone with some casual discussion among peers.  The task complexity is highly complex and the time constraint was ample.

[1] (Reliability: High)

[2] (Reliability: High)

[3] (Reliability: High)

[4] (Reliability: High)

[5] (Reliability: Moderate)

[6] (Reliability: High)

[7] This estimate was made using information from The estimate assumes ISIS produces 30,000 barrels of oil per day in Syria and sells it for the average black market price for $25 per barrel.

[8] (Reliability: High)

[9] (Reliability: Moderate)

[10] This estimate comes from the 33% of operating revenues from (Reliability: High)

[11] (Reliability: High)

[12] The analyst will use a 50% reduction from 2015 as the 2016 estimate; $25 million.

[13] (Reliability: High)

[14] This is estimated from the average black market price for kidneys as reported by (Reliability: Moderate)

[15] (Reliability: High)

[16] (Reliability: High)

[17] (Reliability: High)

[18] (Reliability: High)

[19] Calculated from an estimated average wage of $600 per month each for 17,500 soldiers.

[20] As the actual amount that is spent is not published the analyst will use the conservative estimate of $20,000,000 per year.

[21] (Reliability: High)

[22] (Reliability: High)

[23] (Reliability: High)

[24] (Reliability: Moderate)

[25] ( Reliability: Moderate)

[26] (Reliability: High)

[27] (Reliability: High)

[28] (Reliability: High)


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