The siege of Mosul and targeted killings of chemical weapons experts in U.S.-led coalition airstrikes have significantly degraded the Islamic State's production capability, although the group likely retains expertise to produce small batches of sulfur mustard and chlorine agents, a London-based analysis group said Tuesday.

In a new report, IHS Markit said there has been a major reduction in IS' use of chemical weapons outside the northern Iraqi city. It has recorded one alleged use of chemical weapons by the group in Syria this year, as opposed to 13 allegations in the previous six months. All other recorded allegations of IS using chemical agents in 2017 have been in Iraq — nine of them inside Mosul and one in Diyala province, it said.

"The operation to isolate and recapture the Iraqi city of Mosul coincides with a massive reduction in Islamic State chemical weapons use in Syria," said Columb Strack, senior Middle East analyst at IHS Markit.

"This suggests that the group has not established any further chemical weapons production sites outside Mosul, although it is likely that some specialists were evacuated to Syria and retain the expertise."

IS has lost more than half the territory it once controlled in Iraq. It's now fighting to defend a cluster of western neighborhoods in Mosul, Iraq's second-largest city. Mosul is the last major urban area held by the group in Iraq, and is believed to be at the heart of its efforts to produce chemical weapons.

IHS Markit says the militant group has been accused of using chemical weapons at least 71 times since July 2014 in Iraq and Syria. Most of these involved either the use of chlorine or sulfur mustard agents, delivered with mortars, rockets and IEDs.

The report released Tuesday says the continuing chemical weapons attacks in Mosul most likely draw on remaining stockpiles in the city.

It warned, however, that the extremist group likely retains the capability to produce small batches of low quality chlorine and sulfur mustard agents elsewhere. It could use such agents to enhance the psychological impact of suicide car bombings in urban areas or in terrorist attacks abroad.