Islamic State's morale 'fractured' after air strikes destroy $800m

Islamic State (IS) may have been permanently destabilised after being "financially weakened" by strikes on its oil fields and cash storage sites, say US military commanders.

Major General Peter Gersten, the deputy US commander for operations and intelligence, said up to $800m (£549m) in cash has been destroyed by bombing.

Added to that, the militant group's finances have been "badly hit by battlefield reverses" in which it has lost nearly a quarter of the territory it had seized in Syria and Iraq, reports the Daily Telegraph.

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The UK's senior civil servant in charge of undermining Islamic State's finances, Air Vice-Marshal Edward Stringer, said that as cash reserves have become depleted, the group has turned to a more "arbitrary system of taxation and fines", along with extortion and "gangsterism".

This has had a knock-on effect, with a 90 per cent jump in defections and a drop in new arrivals, reports the BBC.

"We're seeing a fracture in their morale, we're seeing their inability to pay, we're seeing the inability to fight, we're watching them try to leave Daesh [IS] in every way," said Gersten. [[{"type":"media","view_mode":"content_original","fid":"94266","attributes":{"class":"media-image"}}]]

Although significant, these assertions are "hard to verify, and could be seen as self-delusion, propaganda or disinformation – all designed to reassure public opinion that IS is being slowly degraded", says The Guardian.

Yet with roughly 60 per cent of the group's total expenditure spent on paying fighters, a lack of disposable cash has had a serious effect on recruitment, according to research by counter-terrorism journal CTC Sentinel.

The concerted attacks on IS-held oil fields, which have put an even greater strain on tax-raising, can be seen as a vindication of coalition policy. This has led many "individuals to regard efforts to understand, and undermine, the group's funding as equally important to military gains", says the Guardian.

However, as the group's control over its self-declared caliphate weakens, the threat to those outside its control is likely to increase. Nato and EU security chiefs have warned IS could "split in two", with some members placing a greater emphasis on Paris-style foreign attacks.