Washington: Islamic State is facing an "unprecedented" cash crunch with the terror group's revenue from the lucrative oil business plummeting by 50 per cent and oil production cut by about a third due to US-led airstrikes, according to a media report.
For the first time, US officials are seeing clear evidence of the financial strain on the group's leadership, as reports surface of clashes among senior commanders over allegations of corruption, mismanagement and theft, The Washington Post reported.
Islamic State is facing an "unprecedented cash crunch in its home territory", the report said citing US counter? terrorism officials.
Months of strikes on oil facilities and financial institutions have taken a deep toll on the group's ability to pay its fighters or carry out operations.
Cash shortages already have forced the group to put many of its Iraqi and Syrian recruits on half-pay and accounts from recent defectors suggest that some units have not received salaries in months, the report said.
Civilians and businesses in the Islamic State's self- proclaimed homeland complain of being subjected to ever-higher taxes and fees to make up the shortfall.
US officials attribute the economic upheaval to a months-long campaign to destroy the group's financial underpinnings, including weeks of punishing strikes on oil facilities as well as on banks and other repositories of hard currency.
The strikes against oil fields, refineries and tankers have cut oil production by about a third, the report said citing several counter-terrorism officials.
Overall revenue from the Islamic State's oil business has plummeted by as much as 50 per cent because of falling oil prices and a diminished capability to make and sell refined products such as gasoline, the officials said.
"For the first time, there's an optimistic tone," Daniel Glaser, assistant secretary for terror financing at the Treasury Department, said of the financial war against the Islamic State. "I really do think we're having a significant impact."
But "they still make a lot of money, and we still have a long way to go," he added.
Moreover, because of the group's territorial losses in recent months -- military defeats have shrunk the size of the self-declared caliphate by about 40 per cent over the past year - the terrorists now have a significantly smaller population to exploit for cash, US officials and analysts said.