ISIS is one of the world’s richest terrorist organizations, if not the richest. That’s according to the Washington Institute’s Michael Knights who has been studying Iraq since the 1990s.
He says that some estimates of ISIS’s wealth have overstated it – for example, he thinks the $2 billion estimate that's been floating around is too high. But that’s not to say ISIS isn’t raking in a fair amount of cash – between $2 million and $4 million per day by Knights’ count.
“ISIS has always been a very wealthy terrorist movement because it’s been running very large scale Mafiosi protection rackets all across Iraq for around five years now,” Knights said.
And while ISIS has committed more than its fair share of atrocities, certain accounts of its financial past have been exaggerated. “Some of the reports of them robbing banks in Mosul have been disproved, for instance,” Knights said.
Pundits have traced ISIS’s funding to everything to drugs (as the Daily Beast’s Josh Rogin told CNN) to wealthy donors in the Gulf States allied with the U.S.
“Gulf based donors are a relatively small part of ISIS’s funding,” said Knights. “It’s also a part that the U.S. and its allies are quite good at dealing with by now – what they call 'threat finance.' The harder part to deal with is the money that ISIS actually raises on the ground.”
A large chunk of that money is now coming from oil operations. ISIS is running, essentially, a cross-border oil export shop. They control, according to Knights, between 30-40,000 barrels of production per day.
“They will take Iraqi produced oil, take it to Syria, refine it and then export it via truck out of Turkey or even through Iran,” said Knights.
But despite the group's foray into the oil business – don’t expect prices to increase globally. Brent crude is just below $105 and WTI is below $100 a barrel.
“It’s already priced in,” Knights said. “ The good thing about southern Iraqi oil is that it’s very physically distant from the ISIS area and it’s in 100% Shi’ite areas rather than areas with a Sunni population.”
ISIS is a Sunni group. It currently controls an area of Iraq roughly the size of Belgium. Right now, that territory is largely in Iraq’s northwest region. The group’s most recent advances have been into the semi-autonomous Kurdish region, which is oil rich and a base for several international oil companies – like Exxon and Chevron.
Still, when we think of oil-rich Iraq, we think largely of the country’s southern oil fields, which are unlikely targets for ISIS, says Knights. Besides being in a Shi’ite-heavy part of the country, they’re also just plain far away.
“ISIS has shown very little interest, even before this summer, to do long-range expeditionary operations against the hard targets of the oil concessions and oil export infrastructure in southeastern Iraq.”
And things may actually be looking up in the country. Iraq’s cabinet appointed a new Prime Minster Monday – something that could lead to greater U.S. involvement. (The U.S. has been pressing for an Iraqi-led solution to ISIS) We’ve also seen the Kurds join the fight.
“Strangely enough, it’s been a good week in Iraq,” Knights said.
More from Yahoo Finance