Islamic State loses 80 Percent of its revenue, 60 Percent of its territory

ERBIL, Kurdistan Region (Kurdistan24) – The Islamic State (IS) in Iraq and Syria has lost 80 percent of its revenue and more than 60 percent of its territory since its cataclysmic rise in 2014, according to a new analysis.

Released on Friday by IHS Markit, a world leader in critical information, analytics, and solutions, a Conflict Monitor report showed that IS, whose self-styled ‘Caliphate’ spanned roughly the size of Belgium, now holds only 36,200 km2 of territory between its strongholds in Iraq and Syria.

At their height, the jihadists controlled over 90,800 km2 between the two crisis-ridden nations.

“The Islamic State’s rise and fall has been characterized by rapid inflation, followed by a steady decline,” said Columb Strack, senior Middle East analyst at IHS Markit. “Three years after the ‘Caliphate’ was declared, it is evident that the group’s governance project has failed.”

The US-backed Syrian Democratic Forces (SDF) have been applying tremendous pressure on the group, advancing into the outskirts of Raqqa and surrounding IS’ de facto capital.

In Iraq, Prime Minister Haider al-Abadi declared the ‘Caliphate’ had fallen on Thursday as security forces pushed into the remaining pockets of resistance in the Old City of Mosul, the group's last remaining stronghold in Iraq.

“The Islamic State’s remaining caliphate is likely to break up before the end of the year, reducing its governance project to a string of isolated urban areas that will eventually be retaken over the course of 2018,” Strack said.

Besides being pressured militarily on multiple fronts, IS revenue drastically fell, from $81 million in Q2 2015 to $16 million in Q2 2017, a reduction of 80 percent.

This includes a steady decline in all of the group’s financial streams: oil production and smuggling, taxation and confiscation, and other illicit activities according to IHS Markit.

“Territorial losses are the main factor contributing to the Islamic State’s loss of revenue,” said Ludovico Carlino, senior Middle East analyst at IHS Markit. “Losing control of the heavily populated Iraqi city of Mosul, and oil-rich areas in the Syrian provinces of Raqqa and Homs, has had a particularly significant impact on the group’s ability to generate revenue.”

The report did, however, warn that territorial losses might continue to drive IS extremists to intensify its campaign of terrorist attacks abroad to compensate.