"Islamic State of Iraq and the Levant" (ISIL) revenues have dropped precipitously since October 2015 when the international coalition began launching a wave of strikes targeting the group's oil transport, facilities and infrastructure, experts tell Diyaruna.
The impact of Operation Tidal Wave II is evidenced by ISIL's reduction of its fighters' salaries and its more aggressive campaign to extract levies from populations still under its control, they said.
As a further sign of the group's financial shortfall, they added, its fighters have been trying to offload ISIL's self-minted currency, exchanging it for currency that is internationally recognised.
Recent military operations have made it "impossible" for ISIL to smuggle oil across the border, said Syrian journalist Mohammed al-Abdullah, who resides in Cairo.
"Most border crossings, both legal and illegal, are now being monitored by international coalition forces," he told Diyaruna.
The Syrian Democratic Forces (SDF) have been staging ground operations against ISIL oil convoys, he said, with coalition aircraft and monitoring equipment detecting any movement in those areas.
"This has left the group with only a handful of crossings to regime-controlled areas, which also are becoming scarce, and tanker convoys that head towards them are vulnerable to being spotted at any time," al-Abdullah said.
Targeting oil smuggling
"Tracking oil smuggling activities was one of the priorities of the war on ISIL, given that its financial resources depended mainly on the revenue generated from such operations," al-Abdullah said.
It was necessary to cut this financial artery to sap the group’s strength, continue the war against it and tighten the noose around the areas it controls, he added.
"These efforts have apparently borne fruit, and the results are beginning to show on the ground," al-Abdullah said.
ISIL's current financial situation is "dire", said Deir Ezzor resident Jamil al-Khatib, using a pseudonym out of fear for his safety.
This is reflected in the purchasing power of ISIL fighters, whose extravagant spending sprees in al-Raqa's markets have clearly become a thing of the past, he said.
This has been confirmed by many of those who collaborated with ISIL and received payment from the group for services rendered, he said.
A number of residents whose relatives were recruited by the group said "they were paid salaries of up to $400, and some $500 per month, in 2014".
This was in addition to a $100 spousal allowance, food aid that was distributed twice a month and a share of the spoils and revenue from levies, al-Khatib said.
This continued until mid-2016, when salaries were halved, he said.
"Now, the salary is down to $100 per month, with a maximum of $140 for Syrian fighters, with no share of the spoils," he added.
ISIL's worthless currency
"Since the end of last year, some of the group’s elements have been paying for their purchases with ISIL’s gold, copper and silver currency," said al-Raqa merchant Wael Mustafa, using a pseudonym out of fear for his safety.
This poses a real problem for money exchange companies, he told Diyaruna, as ISIL elements are exchanging these currencies for US dollars, and in a few cases Syrian pounds.
Many money changers have opted to quit the trade altogether, he said, because they know that this amounts to no more than overt theft.
"The group’s resort to using this currency and exchanging it for other currencies is apparently due to the huge shortfall in funding and the group’s inability to pay its elements’ salaries," Mustafa said.
He described the group's decision to allow ISIL fighters to exchange ISIL's own currency for internationally-recognised currencies as "a ploy to silence them".
ISIL's currency, rolled out two years ago, was first imposed on oil and fuel traders, who were forced to use it to conduct their transactions, and had to exchange their dollars for the currency in order to do so, Mustafa said.
"This is outright theft, because everyone knows that the metals used by the group to mint its coin were stolen from banks and factories in Syria and Iraq," he said.
Even though the financial situation of al-Raqa, Deir Ezzor and al-Tabqa residents has plummeted, ISIL elements continue to aggressively collect levies, he said.
ISIL elements have seized the homes of those who are unable to pay, he said, as well as other resalable items such as refrigerators, washing machines, gas stoves "and anything else that can be sold quickly in the markets".
ISIL under financial siege
"Money is one of the pillars that helped ISIL expand and gain control of many areas in Syria and Iraq," said Ain Shams University economics professor Fakhruddin Awadallah.
The group used money and other financial incentives such as cars or ammunition to recruit thousands of foreign fighters, he told Diyaruna.
Therefore it is not possible to eliminate the group "without cutting its financial artery", he said.
"Since its inception, ISIL accumulated wealth with a calculated plan that included the robbery of banks and seizure of plants, factories and oil wells and refineries," he said.
"However, the plan was foiled with a counter-plan implemented by the international coalition, accompanied by an international financial siege that deprived the group of the cash donations it was accustomed to receiving," he said.
ISIL’s daily revenue has dropped to its lowest level, he added, and the group is undoubtedly dipping into the cash reserves it had built up previously in order to continue to function.