Islamic State may be struggling to fund its rule, IHS says

Signs are emerging that Islamic State may be facing difficulties funding its rule over parts of Syria and Iraq even as the group generates about $80 million a month from taxation and oil sales, according to a report by analysts at security consultancy IHS.

"There are early indications that the group is struggling to balance its budget, reports of cuts to fighters' salaries, price hikes on electricity and other basic services, and the introduction of new agricultural taxes," IHS Conflict Monitor said in the report that's based on open-source intelligence, including social media, and contacts on the ground.

The jihadist group's monthly revenue in late 2015 was about $80 million, IHS said. About 50 per cent of that comes from taxation and confiscation, while around 43 per cent is generated by oil. Drug smuggling, the sale of electricity and donations make up the remainder.