Iraq's former finance minister has told Sky News that Islamic State is nearly bankrupt and is running out of money to pay its fighters.

At its peak, IS was the richest terrorist organisation in the world - with a huge network of criminal enterprises to finance its network.

The oil fields it captured in northern Iraq, and later set fire to, still belch out thick and acrid smoke.

As the group retreated, it destroyed them to form smoke shields and make it more difficult for coalition jets to carry out airstrikes.

Oil smuggling was perhaps the group's biggest source of income.


But it also taxed and extorted money out of the local population.

:: How the recapture of Mosul unfolded

Image: Hoshyar Zebari says the battle for Mosul is decisive to end Islamic State's caliphate

Former Iraqi finance minister, Hoshyar Zebari, estimates IS was making $3m to $5m (£2.3m to £4m) every day.

He said: "They were taxing every business - they were taxing every shop, every pharmacy, every activity - not to mention the money they stole from the Iraqi banks."

"They were a very, very rich organisation. Now, I think they are on the retreat and they are broke. Also they are losing ground, so this battle in Mosul is decisive to end their caliphate - to end their so-called Islamic State."

The damage that IS has wrought to Iraq has carried a massive human and economic cost - but culturally, it has also been disastrous.

:: The Battle for Mosul: Sky News on the frontline

IS caliphate fragments; ideology remains

IS took pride in destroying Iraq's heritage. It posted propaganda videos of its fighters smashing up antiquities in the Mosul museum.

In its warped ideology, such objects were tantamount to idolatry.

But the group also knew their worth.

Now under the control of the Iraqi army, archaeologists have discovered a network of tunnels excavated by IS under the Tomb of Yunus.

:: IS turn sinkhole into Iraq's 'biggest mass grave'

Iraqi soldiers brave car bombs in Mosul fight

IS though, far from digging to destroy the ancient artefacts, made the tunnels so it could steal the ancient objects and sell them on the black market.

It is not known how much they stole, but what they have plundered and reduced to rubble is significant.

The head of antiquities for the province of Nineveh, Layla Salih, said what IS has done is devastating. They have not dealt with this type of destruction before, and face a "big challenge" during the restoration process.

IS was ingenious in the way it raised and extorted money.

But with the caliphate almost finished in Iraq and shrinking in Syria, its days of being able to pay and command large numbers of fighters are coming to an end.