On Thursday, the leader of the Islamic State in Iraq and Syria (ISIS), Abu Bakr al-Baghdadi, released his first statement in nearly a year. This was a message that ISIS will not go away quietly, even as Iraqi special forces breached the outskirts of Mosul, the last major city in Iraq under ISIS' control.

Baghdadi tried to project confidence that his militants would beat back the Iraqi government advance. "This total war and the great jihad that the Islamic State is fighting today only increases our firm belief, God willing, and our conviction that all this is a prelude to victory," he said in a 30-minute audio recording.

Despite his bluster, Baghdadi's message also signalled the latest transformation for ISIS as it loses the core of its self-proclaimed caliphate in Iraq and Syria.

Baghdadi urged ISIS militants to "unleash the fire of their anger" on Turkish troops fighting against them in Syria, and to take their battle into Turkey. "Turkey today entered your range of action," he said. "You must invade it and turn its safety into fear."

ISIS has been weakened significantly over the past year, after intensive US-led bombing and defeats by its opponents in Iraq and Syria. The group lost thousands of fighters, was forced to relinquish nearly half of the territory it once controlled and has been cut off from smuggling routes it used to move weapons and reinforcements. But with every setback, it found new ways to adapt.

When it is eventually forced out of Mosul, Iraq's second-largest city, ISIS will want to prove its resiliency in neighbouring Syria - and by launching new terrorist attacks around the world. One consequence of the Mosul battle has been to push ISIS fighters and leaders into Syria, especially to its self-proclaimed capital of Raqqa. US military officials said that in the days leading up to the Mosul offensive, some of ISIS' senior leaders fled the city, heading to Syria or other parts of western Iraq that are dominated by Sunni Arabs.

"We have seen movement out of Mosul. We've got indications that leaders have left," Major-General Gary Volesky, the commander of US ground forces in Iraq, said at a press conference in Baghdad on Oct 20. "A lot of foreign fighters we expect will stay as they're not able to exfiltrate as easily as some of the local fighters or local leadership, so we expect there will be a fight."

US officials said most of the leaders and fighters who fled were Iraqis or Syrians, who might have abandoned their weapons and shaved their beards so they could blend in with thousands of civilians who escaped from Mosul ahead of the battle. It's more difficult for the thousands of foreign militant fighters in Mosul to escape by blending in with Iraqi civilians, so they are making a stand in the city.

As the Mosul battle unfolds, ISIS could become even more entrenched in Syria, especially in Raqqa and Deir Ezzor. And as the group is pushed out of urban areas in Iraq, life for Syrians living under ISIS' control will become more difficult. Over the past year, ISIS was already being denied access to revenue sources - including oil and gas smuggling, taxation and bank deposits - that brought in over US$1 billion (S$1.4 billion) in 2014.

With the fall of Mosul, ISIS would lose one of its most important profit centres. Last year, US officials estimate, ISIS generated about US$30 million per month from taxation and extortion in Iraq. In Mosul alone, the group made about US$4 million per month in taxation, especially on salaries paid to workers by the central government in Baghdad. But with those revenues drying up as the militants lost territory and lucrative routes for oil smuggling, ISIS leaders will likely impose harsher taxation and extortion schemes on Syrians living under their control.

More broadly, the influx and entrenchment of ISIS leaders in Syria will make it even more difficult to end the conflict there, which has expanded into a regional proxy war involving Russia, Iran, Turkey, Saudi Arabia, the United States and other powers.

Russia and Iran, which are the two main backers of Syrian President Bashar al-Assad, are mainly targeting rebel factions opposed to Assad, rather than trying to dislodge ISIS from its bastions. For its part, Washington does not intend to commit ground troops to oust the militants from Raqqa, and would instead rely on a coalition of Syrian Kurdish and opposition groups backed by US air strikes.

The Iraqi government and its Western allies are facing the massive challenge of rebuilding Mosul - and reaching a political accommodation with Iraq's Sunni Arab community, so that militants will not be able to continue exploiting sectarian divisions.

But there has not been much planning for the impact that pushing ISIS out of Mosul will have on Syria and the rest of the world.

Even as it lost territory and leaders, ISIS still had the ability to inspire or organise attacks in the West and across the world, US security officials warned. Intelligence officials cautioned that the group would pose an even greater threat as it gets weaker because its foreign sympathisers might be motivated to carry out attacks in the West if they are unable to reach the cut-off "caliphate" in Syria and Iraq.

In his latest message, Baghdadi urged ISIS supporters who were unable to reach Iraq and Syria to travel to Libya instead, where the terrorist group has gained a foothold. Baghdadi also urged his partisans to launch "attack after attack" in Saudi Arabia, targeting security forces and the ruling Al Saud family for "siding with the infidel nations in the war on Islam".

Baghdadi's statement makes it clear what ISIS will do next: As it loses strength and its self-proclaimed caliphate in Syria and Iraq, the terrorist group will lash out with more attacks around the world.

• Mohamad Bazzi is a journalism professor at New York University and a former Middle East bureau chief at New York daily Newsday.