Militants of the Islamic State of Iraq and Syria (ISIS) are making an estimated $3 million a day by selling crude oil captured from Iraq and Syria in black markets, experts say.
ISIS militants have seized a number of oilfields in Iraq and Syria over the past few months, and are now selling crude oil to finance their self-declared “caliphate.”
Analysts suggest that oil from areas under ISIS control is being sold at less than half of its international prices.
Iraqi oil industry officials estimate that ISIS raises more than $2 million a day form crude oil sails.
But U.S. estimations suggest the militant group makes is cashing in about $3 million a day.
It is believed that ISIS is selling crude oil at prices ranging from $25 per barrel to $60 per barrel, which amounts to almost half of the international crude oil price, averaged at $102 as of Wednesday.
“They sell it for $30 a barrel because it's a black market. It's not pegged to international standards for oil prices, which are over $100 a barrel,” Theodore Karasik, director of research and consultancy at the Institute for Near East and Gulf Military Analysis, told ABC News.
Karasik said these oil sails are thought to make up a significant portion of the financial resources supporting ISIS.
“[ISIS] are trying to establish a state, and these types of revenues are important for the state's formation because it makes up a significant chunk of their revenue,” he said.
“They can take over eastern Syria without oil revenue, but seizing these types of fields [like Shaar] are part of an ongoing plan to develop their own economic system.”
ISIS militants seized four small oilfields when they swept through northern Iraq in June and currently control oilfields in the oil-rich Syrian province of Deir al-Zor.
Such developments have prompted the United Nations Security Council last month to warn against trading in oil from “terrorist groups.” The Council also threatened to impose sanctions on nations that take part in such trades.
So far, the ISIS oil trading has been active with buyers in Jordan, Turkey, Syria and Iran, said Luay al-Khatteeb, a visiting fellow at the Brookings Doha Center and serves as the director of the Iraq Energy Institute.
“ISIS controls smuggling routes and the crude transported by tankers to Jordan via Anbar province, to Iran via Kurdistan, to Turkey via Mosul, to Syria's local market and to the Kurdistan region of Iraq, where most of it gets refined locally,” Al-Khatteeb said in an interview with the CNN.
He said ISIS are seeking to become “self-sufficient” by funds made through oil revenues.
“At present, ISIS are trying to establish a self-sufficient state and a capital in what is known as the "Sunni triangle" (west and north Iraq), and oil production will be part of this,” he added.