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How is the Islamic State funded?

BY Larisa Epatko  September 4, 2014 at 1:19 PM EDT
A section of an oil refinery is guarded as it is brought on a truck to the Kawergosk Refinery, east of the city of Irbil in northern Iraq on July 14. An offensive by jihadists had cut output by 260,000 barrels a day in June to 3.17 million, after fighting forced the closure of the country's biggest refinery and slashed production from the giant Kirkuk field, according to a report from the International Energy Agency. Photo by Safin Hamed/AFP/Getty Images

A section of an oil refinery is guarded as it is brought on a truck to the Kawergosk Refinery, east of the city of Irbil in northern Iraq on July 14. An offensive by jihadists had cut output by 260,000 barrels a day in June to 3.17 million, after fighting forced the closure of the country’s biggest refinery and slashed production from the giant Kirkuk field, according to a report from the International Energy Agency. Photo by Safin Hamed/AFP/Getty Images

In response to our coverage of the Islamic State militant group, several viewers have asked how the group is funded. Turns out, it gets millions from oil and ransoms.

“I keep hearing that ISIS (Islamic State in Iraq and Syria) is well funded by selling oil, from wherever they’re stealing it, taking over refineries, etc. What is being done to stop the sale and punish those buying this oil? Why aren’t we shutting this down?” wrote a viewer from Tumwater, Washington.

We asked Nussaibah Younis, a senior research associate and specialist on Iraq for the Project on Middle East Democracy based in Washington, D.C., and she said:

“There has long been a problem of oil smuggling from Iraq, this is not limited to ISIS.” – researcher Nussaibah Younis
“The Islamic State largely generates its own funds, and as its territorial reach expands so does its access to resources. Their control over oil fields in Northern Iraq brings in an estimated $2 million a day, raised through smuggling the oil across the borders with Iran and Turkey.

“Oil is sold on the black market, likely through intermediaries, so buyers are not necessarily aware of the origin. There has long been a problem of oil smuggling from Iraq, this is not limited to ISIS.

“They are also able to raise substantial funds through extortion, kidnapping and straightforward robbery.

“European hostages have been estimated at being worth $3 million each, but this can’t be confirmed.

“There has also been a long-standing flow of donations from sympathetic private individuals in the Gulf, especially in Saudi Arabia, Qatar and Kuwait, to the organization, which the U.N. Security Council Resolution of Aug. 15 (adding six individuals to the al-Qaida sanctions list) tried to address.”