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Report: 'Islamic State' sees financial hemorrhage

A new study has shown that "Islamic State" terrorists have seen their revenue plummet by 30 percent in recent months. To cope, the group has heavily increased fines and duties in its shrinking power holds.

"Islamic State" (IS) is suffering from a steep drop income over the past 15 months, said a new report released on Monday. According to the analysis done by US-based research firm IHS, the jihadist group saw its monthly revenue fall by nearly 30 percent, largely due to its flagging trade in black market oil and loss of territory.

The study gave the major sources of income for the terrorists as "taxation" and petroleum, followed by drug smuggling, selling electricity, and donations from members and sympathizers.

"In mid-2015, the Islamic State's overall monthly revenue was around $80 million," said Ludovico Carlino, senior analyst at IHS, on the firm's website. "As of March 2016, the Islamic State's monthly revenue dropped to $56 million."

"The Islamic State is still a force in the region, but, this drop in revenue is a significant figure and will increase the challenge for the group to run its territory in the long term," he added.

IHS highlighted the significance of the militants' shrinking territory as international coalition airstrikes and a resurgent Syrian army bolstered by Russian assistance recapture IS' pockets of power.

"The Islamic State has lost about 22 percent of its territory in the past 15 months," said Columb Strack, another senior analyst. "Its population has declined from around nine million to around six million. There are fewer people and business activities to tax; the same applies to properties and land to confiscate."

In order to compensate for the loss, the report said, the terrorists have been increasing duties on basic services and leveling higher fines on offenses such as not being able to correctly answer theological questions. It has also begun accepting money instead of doling out corporal punishment where it is required by Sharia law.

Carlino warned, however, that the oil production that helps keep IS afloat financially has not totally halted, and that the jihadists demonstrate an "enduring capacity to repair, or improvise ways of working around disabled infrastructure."

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