Islamic State militants are raking in money at a remarkable rate, earning about $1 million a day from black market oil sales alone, a Treasury Department official said Thursday.

David Cohen, who leads the department’s effort to undermine the Islamic State’s finances, said the extremists also get several million dollars a month from wealthy donors, extortion rackets and other criminal activities, such as robbing banks. In addition, he said the group has taken in at least $20 million in ransom payments this year from kidnappings.

“With the important exception of some state-sponsored terrorist organizations, IS is probably the best-funded terrorist organization we have confronted,” Cohen, undersecretary for terrorism and financial intelligence, said in a speech at the Carnegie Endowment for International Peace in Washington. “It has amassed wealth at an unprecedented pace.”

The group extracts oil from territory captured across Syria and Iraq, and sells it to smugglers.

IS, led by Iraqi Abu Bakr al-Baghdadi, wants to create a caliphate, or Islamic empire, in the Middle East. IS initially tried to oust Syrian President Bashar Assad, but other groups, including al-Qaida central command, turned against IS because of its brutality.

Unlike the core al-Qaida terrorist network, IS gets only a small share of funding from deep-pocket donors and therefore does not depend primarily on moving money across international borders. Instead, it obtains the vast majority of its revenues through local criminal and terrorist activities, Cohen said.

He acknowledged that the Treasury’s tools are not particularly well-suited to combating extortion and local crime.

“They rob banks. They lay waste to thousands of years of civilization in Iraq and Syria by looting and selling antiquities,” he said. “They steal livestock and crops from farmers. And despicably, they sell abducted girls and women as sex slaves.”

In the Iraqi city of Mosul, Islamic State terrorists are reportedly going door to door and business to business, demanding cash at gunpoint, he said.

“A grocery store owner who refused to pay was warned with a bomb outside his shop. Others, who have not paid, have seen their relatives kidnapped. … We’ve also seen reports that when customers make cash withdrawals from local banks where ISIL operates, ISIL has demanded as much as 10 percent of the value.” Cohen said, using an acronym for the group.

But oil is the biggest money-maker.

“It is difficult to get precise revenue estimates … but we estimate that beginning in mid-June, ISIL has earned approximately $1 million a day from oil sales,” Cohen said. Other estimates have ranged as high as $3 million a day.

The Treasury said IS is selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transport the oil to be resold. “It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey,” he said.

Cohen said the Syrian government also has allegedly arranged to buy oil from IS.

He noted that U.S-led airstrikes on the group’s oil refineries are threatening the militants’ supply networks, and that Turkey and the Kurdistan regional government — the official ruling body of the predominantly Kurdish region of northern Iraq — are working to prevent IS oil from crossing their borders.

Cohen acknowledged, however, that IS moves oil in illicit networks outside the formal economy, making it harder to track.

“But at some point, that oil is acquired by someone who operates in the legitimate economy and who makes use of the financial system. He has a bank account. His business may be financed, his trucks may be insured, his facilities may be licensed,” he said.

“We not only can cut them off from the U.S. financial system and freeze their assets, but we can also make it very difficult for them to find a bank anywhere that will touch their money or process their transactions.”

(AP)