Look at a map of Syria and Iraq, and it should be obvious: the Islamic State is losing this war. Having taken on more enemies than it could ever hope to handle after threatening to undo the Iraqi state—while also declaring war on the Muslim world by announcing itself a caliphate, provoking an enormous countermobilization of sectarian Shia militias, and goading a U.S.-led coalition of more than 60 nations into battle by all manners of calculated atrocities—the Islamic State is now losing men and territory at an absolutely unsustainable pace.

Since reaching the peak of its influence in September and October 2014, the Sunni extremist group has faced one defeat after another. The Islamic State’s thrust into Iraqi Kurdistan in August 2014, which provoked the initial U.S. intervention, ran out of steam almost immediately. It then bet all on victory against U.S.-backed Kurdish forces in Kobane, in northern Syria, and lost. The Islamic State has been pushed back by Kurdish groups further east too, including south of the Syrian city Qamishli, along the Syria-Iraq border, and inside Iraq at Mount Sinjar.

Repeated jihadi offensives against the Syrian government enclave in Deir ez-Zor have also been beaten back, while fighting continues around the Shaer gas field east of Homs. The Islamic State’s advances into the rebel-held hinterland north of Aleppo seem to have stalled too, although the future of the area hinges on the outcome of a parallel battle between local Sunni rebels and Syrian government forces.

North of Baghdad, the Islamic State’s attempts to ignite the ethno-sectarian powder keg in Kirkuk have so far been thwarted by Kurdish peshmerga forces, while Iranian-backed Kurds and Shia militias have purged the Iraqi countryside to the south and along the Iraq-Iran border. Having more or less rooted out the Islamic State from Diyala Province and the eastern areas of the Tamim and Salaheddin Provinces, the Shia militia forces then pivoted to assault the Sunni stronghold of Tikrit. By mid-March 2015, the jihadi forces in the city seemed to be on the ropes, putting the Islamic State at risk of its most significant defeat yet.

Severe Structural Damage

Beyond the territorial losses, U.S. and allied attacks are also downgrading the Islamic State in other ways. The group’s own extremist ideology and the haphazard nature of its expansion in mid-2014 contribute to this slow unwinding.

Most importantly, defeats in Kobane, Sinjar, Diyala, and elsewhere have given the lie to the Islamic State’s aura of invincibility. The snowball effect of summer 2014, which, according to CIA estimates, helped double or triple the group’s manpower, is impossible to sustain, and may be reversed once these fair-weather friends start to defect.

The Islamic State’s financial foundations are also clearly withering, though they are not going to disappear. The economic collapse in Mosul and other areas has shrunk the group’s mafia-style system of taxation and extortion—its most reliable source of income—though the incorporation of new territories in 2014 may have made up for that. In addition, the United States is systematically bombing the do-it-yourself oil refineries that have sprung up all over northern Syria and Iraq and tightening international sanctions on aid for the group. Meanwhile, oil prices are dropping. Less money means less ability to provide social services and pay fighters, adding to local discontent and discouraging other armed factions from joining. And crucially, the slowing or reversal of Islamic State frontline advances threatens the very model on which it was built. Once it becomes clear that the Islamic State can no longer expand and distribute new spoils of war among its fighters, this will put an end to what Eckart Woertz has called a “Ponzi scheme of looting.”

In addition, U.S. aerial surveillance and bombing are making it impossible for the Islamic State to act as a state by driving institutions and leaders underground and denying it the prestige it sought by declaring itself a caliphate. This campaign also disrupts the group’s ability to shift troops around and concentrate forces against thinly spread enemies.

Decreased mobility affects basic stability in areas under the group’s control. Whether the Islamic State has 10,000 fighters or 50,000 fighters, it is too few to police the millions of inhabitants in the Euphrates region stretched across Iraq and Syria, plus Mosul and surrounding towns, in any systematic fashion. The Islamic State’s rule has rested on four factors: local support (from a large enough minority to monitor the wider population), appeasement and co-option of local powerbrokers (such as clans, armed factions, and businessmen), the popular preoccupation with external enemies (Shia, Kurds, Syrian Baathists, and Americans), and the ability to mete out extreme retaliation against any town that slips out of control, as evidenced when the Islamic State sent armed convoys to massacre hundreds of rebellious tribal members in eastern Syria last year. These internal punitive expeditions have no doubt become more difficult to assemble and more dangerous to carry out since August 2014.

The United States is also seeking to cut lines of communication inside core Islamic State territory: the wider Mosul region, the Deir ez-Zor and Anbar tribal zone, Raqqa, and eastern Aleppo. Kurdish forces are already disrupting traffic between Mosul and Syria through their presence in the Mount Sinjar and Qamishli regions, and the Kobane offensive has added pressure to roads and border points in Syria. If Iraqi Shia forces manage to capture Tikrit, as now seems likely, they will have secured the southern half of Highway 1 between Baghdad and Mosul. This could allow Iraqi Shia and Kurdish forces to attack the northern Iraqi city of Hawija in a pincer movement and, later on, to massively increase pressure on Mosul by sending forces straight from Baghdad.

Why the Islamic State Will Fight On

The Islamic State is losing, but that does not mean that it is going to fold and disappear.

First of all, despite this long string of defeats, the Islamic State has also made progress, albeit on a lesser scale, in places like western Iraq, eastern Homs, and the Syrian desert. There is still low-hanging fruit to be picked in war-torn Syria and, for all its recent victories, the Iraqi government is staring into the barrel of economic disaster due to tumbling oil prices. Further afield, there are plenty of soft targets in Libya and Lebanon, not to mention the mouthwatering prospects that jihadis see in Jordan, Egypt and, apparently, Nigeria.

Nor should one underestimate the ability of the Islamic State to adapt to adverse circumstances. It is a flexible and lethal force and it knows what it is up against. Its top leaders have about a decade of hard-earned experience and are surely among the world’s most skilled practitioners of guerrilla war under hostile aerial supremacy. The United States was not able to decisively break Sunni jihadism in Iraq while occupying the country with 140,000 soldiers, and it will be even harder without them. And even though a number of measures have been taken to police borders, air traffic, and international bank transfers, foreign supporters in the Middle East and Europe will continue to provide the Islamic State with a hard core of fanatic volunteer fighters, suicide bombers, and financiers.

Most importantly, it must be remembered that the Islamic State is a product of the Iraqi and Syrian conflicts, not their cause. As long as the overall sectarian conflict continues, the Islamic State will continue to find willing recruits in deprived and brutalized Sunni Arab regions where becoming a holy warrior may be the only career choice available and where few community leaders see any hope of peaceful coexistence with the authoritarian rulers of Damascus and Baghdad.

Indeed, the recent victories of Shia and Kurdish forces have tended to be based on raw force and communal vengeance; they rarely involve any serious attempt to reconcile with Sunni communities and cultivate a stable order in its stead. Coming after the Islamic State’s sectarian atrocities and genocidal persecution of non-Sunni minorities in 2014, the brutality now meted out against local Sunnis in the name of counterterrorism is hardly surprising. Nonetheless, both are morally reprehensible and counterproductive. Even as the Islamic State fails on every other front, Sunni fears of what may follow may keep the group standing. It does not matter if the Islamic State is losing the war for hegemony over Syrian and Iraqi Sunnis when there is no one around to win it.