The June 2014 ISIL campaign seemed to derive from the Koranic invocation "Make war ... upon such of those to whom the Book has been given until they pay tribute offered on the back of their hands, in a state of humiliation" (9:29). The prominent Arab historian Philip Hitti suggested that campaigns of the early Muslim "seem to have started as raids to provide new outlets for the warring spirit of the tribes now forbidden to engage in fratricidal combats, the objective in most cases being booty and not the gaining of a permanent foothold." Destructive raids pillaged villages, markets, and encampments, gradually weakening neighboring societies, eventually resulting in permanent conquest.
It is apparent that this organization has been well-funded for years. From 2006 to 2009, they raised roughly $2 billion by extorting payoffs from employees at the Beiji oil refinery in northern Iraq After raiding Mosul’s central bank and stealing an estimated $429 million in June 2014, one report speculated that the ISIL may be sitting on nearly $1.5 billion in assets. And having overrun Mosul and other Iraqi cities, it acquired a lot of cash and gold bullion and military hardware. Current reporting suggested that the ISIL continued to pay competitive salaries and death benefits to its members in a more reliable fashion than the Iraqi Army [see Mitchell Hartman, “ISIL Gets Rich in Attack on Iraq’s Cities,” Marketplace, June 13, 2014].
The group earns millions by selling captive women and children into the sex trade, according to research by Luay al-Khatteeb, a visiting fellow at the Brookings Institution’s Doha Center in Qatar. In August 2014, United Nations officials said IS militants may have forced 1,500 Christian and Yazidi religious refugees into sexual slavery.
IS and other militants also plundered Syria’s medieval Christian cemeteries, archeological sites and museums, looting antiquities such as Byzantine mosaics. In July, the United States’ Smithsonian Institution and Penn Museum co-sponsored a Syrian training session to safeguard precious artifacts that are part of the country’s cultural heritage. The militants also traffic in goods from stolen cars to appliances to jewelry. Islamic State militants have peddled excess weapons and ammunition – including drones, Hellfire missiles and machine guns – left behind by fleeing or captured Iraqi Army troops and sometimes supplied by the United States and its allies.
Islamic State militants impose taxes, tolls and fines to ensure a regular flow of money. They require drivers to pay 'road taxes' in territories it controls. The shakedown generates several million dollars for the group each month. In Syria's north-central city of Raqqa, and rural parts of the northeast governorate of Hasakah, Islamic State militants charge each household the equivalent of $13.50 a month for water and electricity, along with a $4 "protection fee".
ISIL had its own source of funding controlling gas and oil fields in the east of Syria that gave it a revenue stream. In their fight the Syrian government, they took over some Syrian oil facilities, potentially a huge source of revenue. But they could only find one customer - Syria. By June 2013 ISIS had been selling smuggled Syrian oil in Turkey worth $800 million, according to Ali Ediboglu, a lawmaker for the border province of Hatay from the main opposition Republican People’s Party (CHP). It also secured revenue by selling electricity to the Syrian government from captured power plants. The militants set their sights on Iraq’s Beiji oil facility, potentially providing another source of revenue to further expand their operations.
ISIS led a coalition of Sunni militias in an astonishing takeover of a considerable portion of the Iraq's northern oil fields. The group began to smuggle close to $1 million per day in Iraqi crude, prompting some to dub the insurgents’ still-fragile Islamic caliphate “the world’s smallest petro-state.” As of August 15, the Islamic State held six oil fields in northern Iraq. But by late August, its fighters had lost control over the highly productive Ajeel oil field – a result attributed to US airstrikes and Iraqi and Kurdish troops’ assaults. The Associated Press estimated that the IS oversees 11 oil fields between Iraq and Syria, as of mi-september 2014.
Western intelligence officials monitored Islamic State tanker trucks rolling from Iraq into southern Turkey, but had refrained from military action. The militant group continued to provide natural gas to Syria’s Bashar al-Assad regime so it can operate electrical power plants.
By one account, IS fighters had amassed about 35 Iraqi military tanks, about 80 armored police vehicles and hundreds of Humvees. Iraq lost approximately four divisions worth of equipment and probably at least three depots in the area of Mosul. Much of the equipment taken by the Islamic State when the Iraqi army fled Mosul was front-line American weaponry. Multiple reports said the loot included US Stinger surface-to-air missiles, artillery pieces, Humvees, and heavy trucks, not to mention piles of assault rifles and ammunition. Some of this would be usable, but much of it would not, in the absence of training and spare parts for maintenance.