By most estimates, the Islamic State is the world’s richest terrorist organization. But it appears to be wrestling with money problems that could affect its ability to wage war while trying to govern millions of people in its self-declared caliphate.

U.S.-backed forces in Iraq and Syria have retaken significant amounts of territory from the group, depriving it of traditional sources of income, analysts say. Towns and villages that the Islamic State had relied on for tax revenue have been captured by Arab and Kurdish opponents. And lucrative spoils of war, including oil fields, properties to confiscate and captives to ransom off, have become scarcer as the group struggles to seize new areas.

“A problem they face is that much of their income over the last two years has been through conquest, confiscation and extortion, and those are all one-time things that aren’t sustainable,” said Quinn Mecham, an assistant professor of political science at Brigham Young University. “And now they’re losing territory, and that makes it difficult to continue to extract revenues. The pressure is on.” […]