ISLAMIC State jihadists are raising as much as $1m a day from the sale of crude oil recovered from conquered oilfields in Iraq and then smuggled to refineries in Turkey and Iran.
Oil industry experts believe the group, formerly known as the Islamic State of Iraq and al-Sham (Isis), is able to command $25 (€18.40) a barrel for the crude that its fighters are selling from the oil plains around Mosul.
Middlemen based in the Kurdistan region of Iraq are able to turn a handsome profit on the supplies by smuggling the tankers abroad for refining.
The specialist Iraqi Oil Report said the centre of the $1m trade was the town of Tuz Khurmatu on the fringes of the Kurdish region. Traders there are buying convoys of tankers supplied by Islamic State.
Shwan Zulal, an Iraqi oil industry analyst, said Islamic State was using its control of a 150-mile swathe of territory to loot crude from some of Iraq's prime oil assets.
The swift advance of the group after last month's conquest of Mosul gave it control over the path of the Kirkuk/Ceyhan oil pipeline, the country's biggest, and the Baiji oil refinery, the most important in Iraq.
"In some ways it's as easy for Isis as digging a hole and letting the oil run before siphoning it off into tankers for transportation and Baiji is a huge complex that it may not fully control but it can take supplies," said Mr Zulal of Carduchi Consulting. "The situation allows for Isis to do some sh-rewd business."
Islamic State has also claimed to have taken Syria's Euphrates Oil Company fields.
Hassan Hassan, a Gulf-based expert, reported that Islamic State had been able to reduce the price of petrol on the streets of Deir al-Zour by three-quarters after securing the loyalty of the rebel town's militias last week.
Iraq's exports recently rose to almost three million barrels a day, just above the level before the 2003 invasion to overthrow Saddam Hussein.
Almost all exported crude oil is pumped out of oilfields in the Shia-dominated south of the country and has been unaffected by Islamic State advances. (©Daily Telegraph, London)