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German Intelligence Says Islamic State's Oil Power Overestimated: Reports

RIA Novosti

17:38 07/11/2014

MOSCOW, November 7 (RIA Novosti) - German intelligence estimates show that the Islamic State (IS) terrorist group's oil production capacity has sharply declined since August, leaving the group with much less economic power than previously assessed, Sueddeutsche Zeitung reported.

According to data from German intelligence agency BND cited by the newspaper on Thursday, oil production in IS-controlled areas has shrunk six times over the past three months.

In August, IS-run oilfields produced 172,000 barrels per day. October's daily capacity plummeted to 28,000 barrels, of which only 10,000 were actually sold, the newspaper reported, citing BND.

The intelligence agency explained the dramatic decline with the success of the US-led airstrikes in Iraq and Syria, claiming that airstrikes in recent weeks destroyed half of the IS' oil production facilities.

According to US Treasury data, oil production brings the group about $1 million a day. However, BND argued that the real figure stands at less than $100 million per year.

The Islamic State insurgent group has proclaimed a caliphate over the vast areas it seized across Iraq and Syria. The United States and a number of its allies are currently carrying out airstrikes against IS targets in both countries.

Apart from smuggling oil, sources of IS funding include extortion from businesses operating in its controlled areas and from ransoms paid for hostages. In addition, when the group took over Iraq's major city of Mosul in June, it reportedly looted some $400 million from the local central bank.

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