“In 2016, we have seen major losses in the north-east extend south towards Raqqa and Deir al-Zour as the mixed-sectarian Kurdish and Sunni Syrian Democratic Forces (SDF) advance under the cover of US and Russian airstrikes,” said Columb Strack, senior analyst at IHS. “The Syrian government has also made gains in the West. They now stand just five kilometres outside the ancient city of Palmyra, which was overrun by the jihadists in mid-2015.”

The Islamic State’s last major territorial advance into Palmyra and Ramadi in June 2015 came at the expense of losing large swathes of territory in northern Syria. These included the strategically important Tal Abyad border crossing, which was the group’s main crossing point between Turkey and the so-called Caliphate’s de-facto capital city of Raqqa.

“Following the loss of Tal Abyad, IHS began picking up indicators that the Islamic State was struggling financially, which included various tax hikes, increases in the cost of state-run services, and significant cuts of up to 50 percent in the salaries paid to Islamic State fighters,” Strack said. “These financial difficulties have been exacerbated further by both US-led Coalition and Russian airstrikes on the group’s sources of oil revenue since late 2015.”

The loss of access points to the Turkish border, and heightened border security on the Turkish side, have significantly reduced the flow of goods and potential recruits into the Caliphate. Although local smuggling channels still operate, the risk of detection, and therefore the associated cost have skyrocketed.

“The Islamic State is increasingly isolated, and being perceived as in decline,” Strack said. “This plays into the hands of its main rival, al-Qaeda’s Jabhat al-Nusra, which despite sharing the same ultimate goal of establishing an Islamic caliphate, has criticised the Islamic State for prematurely declaring it. Isolation and further military defeats will make it harder for the Islamic State to attract new recruits to Syria from the pool of foreign jihadis.”

The IHS Conflict Monitor records about 1,000 manually geocoded indicator events for Iraq and Syria every week from social media and other open sources, systematically rated for reliability. It is a weekly deliverable that includes analysis, data and maps.