ISIS are making nearly $1million a day selling off crude oil from conquered refineries to Kurdish businessmen.

The jihadists, who now call themselves the Islamic State's caliphate, are smuggling the resources from Iraqi oilfields into Turkey and Iran where they offer it up for $25 (£15) a barrel, making a huge profit.

The lucrative trade was revealed as the Iraqi government were accused of killing 255 Sunni prisoners as revenge for the ISIS advance, which has seen them take large swathes of the country.

Industry experts believe the fighters are taking the oil from plains south of Mosul and transporting it in tankers, owned by the extremists, so it can be turned into diesel and petrol.

Smuggling: Oil tankers, owned by the Islamic State, transport petrol to to be sold to Kurdish businessmen

Lucrative: The jihadists are said to be

Accused: Human Rights Watch has said Iraqi security forces, such as those pictured, killed prisoners when they took back territory from ISIS militants

'Outrageous violation': The rights watchdog accused the Iraqi forces of committing war crimes

According to The Daily Telegraph, the looting is based in the town of Tuz Khurmatu on the fringes of the Kurdish region.

Iraqi oil industry analyst, Shwan zulal said the militants were using their control of a 150-mile swathe of territory to take crude oil from some of Iraq’s prime oil assets.

He told the paper: '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.'

The prisoners who were killed came from a rival Muslim denomination to the Shi'ite Iraqi army, were fleeing the violence when they were recaptured and killed, according to human rights campaigners.

Human Rights Watch (HRW) brought to light reports of Iraqi armed guards breaking prisoners' arms and legs and shooting them in the head, as well as tossing grenades into cells with inmates inside.

It was claimed that eight of the victims were boys who were less than 18 years old.

The attacks were thought to be revenge by the Iraqi forces after ISIS took huge swathes of the country in the face of startlingly little resistance.

It was widely reported that ISIS added to the chaos around its lightning advance last month by letting inmates loose from Iraqi jails, in the hope they would join their insurgency.

The watchdog listed five incidents where Iraqi are believed to have carried out the killings, drawing on testimonies from government workers, hospital staff and lawyers.

The accounts include reports of handcuffed, blindfolded and burned bodies being dumped into a ravine near Mosul, Iraq's second city, which was overrun by ISIS on June 9.

On the run: Most of the prisoners, who were not combatants, were fleeing from the violence caused by advancing ISIS forces (pictured), HRW claim

Revenge: HRW says the attacks were retribution for the huge gains made by ISIS when they rampaged across the north of Iraq in June. Pictured is a triumphant ISIS fighter holding their flag

Another account speaks of guards bursting into prison cells and opening fire with AK-47s, killing more than 50 people, including teenage boys.

In a further incident, the watchdog cites testimonies that prisoners whom Iraqi officials said died in crossfire were in fact killed 'execution-style' by vengeful commanders after an assault.

A spokesman for HRW said: 'Gunning down prisoners is an outrageous violation of international law.'

'While the world rightly denounces the atrocious acts of ISIS, it should not turn a blind eye to sectarian killing sprees by government and pro-government forces.'

The organisation has demanded an international inquiry be held into the alleged killings.

ISIS themselves, whose forces now call themselves The Islamic State, have been subject to a tide of condemnation after footage of their own mass executions emerged.

Executions: ISIS themselves has also been attacked for carrying out even more brutal executions, such as the ones from mid-June pictured above where militants marched up and down rows of bodies shooting them

Firing squad: However, HRW said that the brutality of ISIS does not excuse Iraq forces of adopting similar tactics in their fight against them

One man was shown being forced to kneel by the roadside before he was shot in the back of the head, while other gruesome pictures emerged of militants marching up and down rows of prone bodies apparently firing machine guns into them.

The claims against Iraqi forces came as their grip on the country slipped further with the advance of Kurdish security forces into disputed oil fields.

The takeover of the Bai Hassan and Kirkuk oil fields were the latest land grabs by Kurds, who have responded to ISIS by seizing more territory of their own.

Kurdish fighters known as peshmerga pushed into the city of Kirkuk, a major hub for the oil industry in the north, and the surrounding area weeks ago.

Territory: Kurdish-controlled Kirkuk, pictured, was hit by car bombs yesterday, killing dozens of people

Aftermath: Security forces stand guard this morning after the attacks just outside of the disputed city

But until now they had not moved into the oil fields themselves. On Friday, however, the fighters took over the Bai Hassan and Kirkuk fields and expelled local workers, the Oil Ministry in Baghdad said.

Oil Ministry spokesman Assem Jihad denounced the move as 'a violation to the constitution' and warned that it poses 'a threat to national unity.'

The Kurdish Regional Government said its forces moved to secure the fields after learning of what it said were orders by officials in the Oil Ministry to sabotage a pipeline linking oil facilities in the area.

It said production would continue, and that staff can return but will operate under Kurdish management.

Ties between Kurds and the central Baghdad government are rapidly unravelling as the country fragments in the face of the Sunni militant blitz, led by Islamic State extremists.

Expansion: The accusations came as peshmerga fighters from the autonomous Kurdish region of Iraq took control of lucrative oil fields just outside the city of Kirkuk

The country is effectively being cleaved along ethnic and sectarian lines - the swath of militant-held Sunni areas, the Shiite-majority south and center ruled by the Shiite-led government in Baghdad and the Kurdish north.

The United States and other world powers, as well as Iraq's top Shi'ite cleric, have pressed for a more inclusive government that Iraqis of all stripes can rally around.

On Friday, Ayatollah Ali al-Sistani again urged lawmakers to move swiftly toward a compromise, calling on them to 'rise above selfish aims.'