Islamic State Terror Group Seen as Unprecedented Threat

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Aug. 26 (Bloomberg) -- The Islamic State, which now controls an area of Iraq and Syria larger than the U.K., may be raising more than $2 million dollars a day in revenue from oil sales, extortion, taxes and smuggling, according to U.S. intelligence officials and anti-terrorism finance experts. Peter Cook reports on “Bloomberg Surveillance.” (Source: Bloomberg)

Not necessarily.

There certainly is a functioning financial system within the islamic state.

It starts effectively with oil.

They are the first major terrorist organization in quite some time to have a steady revenue stream.

They control oil fields in iraq and in syria.

They control two refineries as well.

They're using that to fund their efforts.

And they are smuggling oil out and selling at below market value.

They are using that cash to fund their offensive operations and to try and form a government and provide services to some of the people in the territory they are taking over.

This is one of the big threats and curveballs for the united states and the international community.

They have a local funding stream and that is causing even more of a problem.

This makes them more of a threat than other terrorist organizations we have seen the past.

This has to go across the border.

Is there any hope of closing these borders to keep them from selling it?

There has been a big focus on that.

Somebody has to play middleman in all of this.

That is the big focus of the u.s. intelligence officials as well as people from the global stage.

A lot of this is moving to kurdistan.

It is heading to places like turkey and syria.

That is one potential squeeze point going forward.

There has not been much of an effect going on.

They are using the cash.

They may be making $2 million a day in terms of oil revenue.

They are using extortion and kidnapping.

Speaking of cash, you been watching washington for years.

Have you ever seen anything like abu dhabi flying west to take on islamic jihad in tripoli?

This is new.

This is a first.

This is very new at a surprise to u.s. officials.

The egyptians were involved.

It suggests a balance of power in the persian gulf and middle east is really up for grabs right now.

These countries feel this threat is so intense that they would launch an airstrike in libya and not notify the united states in some form or fashion.

Those are u.s. planes that are being flown by the emirates.

Those are weaponry handed over by the united states.

It is highly unusual.

How will saudi arabia reacted to this.

That was my first thought.

How do they respond to dubai and abu dhabi flying from new york to l.a. to attack part of the islamic separatists?

Saudi arabia was the big boy on the block for a long time in that region.

It suggests that there are tensions between regional partners and regional allies right now that we have not seen in the past.

I think saudi arabia's next move is a? right now.

I think there is some tension that is going to play out.

That is one of the mysteries of this moment.

How do they feel about the emirates making this move and the egyptians as well?

You were talking about how the islamic state brings in $2 million a day.

What services do they provide?

It is intimidation first of all.

We are talking about in some instances you have seen medical help for people in some of those communities.

That is not being provided to everyone.

This is an occupation in many of these areas.

This is not a government that is up and functioning in any form that we have seen previously.

This is not differ from what we saw with the taliban in afghanistan.

They control communities by force what can -- providing some services.

They are fulfilling a government role.

They are better organized and better funded than a lot of people thought.

They are better trained and equipped.

All of these locations they have taken over have u.s. equipment.

They are driving humvees right now.

The islamic state is able to provide services is one of the most terrifying things i've heard this morning.

Thank you.

Let's do that as we turn in the markets.

We have a weaker euro the last few days.

That is really something to watch.

We talk about a reversal from enthusiasm of 170. thank you so much.

Thank you for your perspective.

Coming up on our guest host will join us to discuss the

This text has been automatically generated. It may not be 100% accurate.

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