The collapse in oil prices has hit hard the economies of petro-states, including those in the Middle East, but experts say it will take a lot more than low oil prices to really damage the funding operations of ISIS.
ISIS oil revenue, reaching as much as $50 million a month, has been highlighted as a key revenue source for the Islamic State to finance its operations.
Oil prices have now fallen below $35 for the first time since 2007, but experts say low oil prices may serve the terrorist network's goals.
"The bigger impact of low oil prices is the delegitimization of the gulf monarchies, so paradoxically, a sustained oil crash is actually a plus for ISIS, " said Eurasia Group president Ian Bremmer.
ISIS oil sources have also become a key military target for the U.S. and allies.
"With an increased focus on degrading Islamic State oilfield operations in Iraq and Syria by the U.S.-led coalition (mostly just France and the U.K.) and Russian airstrikes since October, that revenue stream has already started to diminish, as it's becoming more difficult to maintain or replace damaged infrastructure," said Martin Reardon, senior vice president of The Soufan Group, a strategic intelligence consulting firm that advises governments and corporations.
Bremmer said airstrikes against ISIS oil have made it a smaller part of ISIS's revenues.
Still, as of late October 2015, black market sales of crude and refined oil were the Islamic State's single-largest source of revenue. "Bottom line is when oil prices go down, the black market rates ISIS uses eventually go down as well," Reardon said.
ISIS oil: By the numbers
BARRELS PER DAY: About 30,000 barrels per day from Syria and 10,000-20,000 barrels per day from Iraq.
REVENUES FROM OIL: Estimated to be worth as much as $40 million-$50 million dollars per month.
DISCOUNTED PRICES: ISIS oil prices can run as much as 50 percent below the global average. Last June, price per barrel was about $60, so ISIS could sell for $30. Now they can only sell for about $20. So for ISIS that means more than a 30 percent drop in revenue.
MONTHLY SALARIES TO FIGHTERS: Monthly salaries for their fighters, which generally run $400-$600 per month if unmarried, has reportedly been reduced by as much as 25 percent.
Source: TSG (TSG's management includes several former FBI, CIA, Department of Homeland Security and other counterterrorism officials)
Howard Shatz, a senior economist at the Rand Corporation, said there has to be a relationship between ISIS crude and global crude prices, but ISIS oil revenue can be hard to estimate precisely because within its territory prices can become somewhat divorced from global reality — specifically in the case of refined petroleum products.
"That's because they have a monopoly, or at least close to one," Shatz said. "Following the recent air strikes on oil terminals and oil tankers, prices were reported to have risen in Raqqa and Deir ez-Zor, attributable in part — but not wholly — to the strikes."
Still, Shatz added that ISIS is constrained by what people can afford to pay within its territory and by reverse smuggling. "If the price is right, there will be people who try to bring refined products into ISIS territory."
Oil operations degraded by military strikes matter to ISIS finances in the short term, because oil is a valuable source of free flow of cash for the Islamic State, said consulting firm Kroll chairman Dan Karson said. But long term, he said, it is not a game-changer, considering all the other sources of revenue for the terror network. "Based upon what they need to explode a bomb in a public place, to undertake a terror attack, those expenses are not great," Karson said. "Oil, if anything, is a bonus to their operations," he added.
Low oil prices only hurt ISIS when combined with attacks on its other money sources, said Thomas Creal, a forensic accountant who has advised the United Nations and led money tracing efforts in the Middle East.
There is no authoritative source for ISIS finance sources, but Creal referenced a "dirty dozen revenue sources," which in addition to oil includes wealthy donors, foreign fighters bringing money with them, taxation, extortion and sale of stolen assets.
The three tiers of ISIS finance
2. Extortion, taxes, confiscations (basically, harvesting the local economy for whatever they can get out of it, like a colonial occupier)
a. "Zakat" (religious tax) on capital
c. Customs duties
3. Confiscations from banks in conquered territories (one-time revenue boost)
1. Antiquities sales
2. Kidnapping ransom
1. Human trafficking (this may be Tier 2, but not enough credible data to determine)
2. Foreign fighters bringing money with them
3. Social media donations
4. Wealthy donors
5. Charities raising money under false pretenses
(Note: Donations probably 10 percent or less. Source: Howard Shatz, Rand Corporation)
Consulting firm IHS has identified six main sources of ISIS revenue: production and smuggling of oil and gas; taxation on the profits of all the commercial activities held in areas under its control; confiscation of land and properties; trafficking of drugs and antiquities; criminal activities, such as bank robbery and kidnapping ransom; and state-run businesses, such as running small enterprises, including transport companies or real estate agencies.
IHS estimates that 43 percent of the Islamic State's revenue comes from oil and about 50 percent from taxation and confiscation, totaling about $80 million in monthly revenue as of late 2015.