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"It's quite a significant increase, but in-line with all the investment that was done over the last 10 years," Samir Kasmi, partner at Dubai-based advisory firm CT&F, told CNBC. "They are not subject to an OPEC quota at the moment, and could flood the market".

Abdel Mehdi explained production in the city of Kirkuk, which was held by IS troops last year before being liberated in June, would reach 375,000 b/d for the first three months of 2015. Production would eventually rise to 600,000 b/d by April.

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Oil exports from the northern region are piped through a key line to the Mediterranean port of Ceyhan in Turkey. It's all part of an interim revenue-sharing deal, reached between Baghdad and semi-autonomous Iraqi Kurdistan last month, following years of tensions that have undermined the national fight against IS forces. The agreement includes the shipment 300,000 b/d of oil from Kirkuk and 250,000 b/d from Kurdistan.

"The one bright spot has been the oil sector, which has so far seen no disruption to production as a consequence of the conflict," HSBC Global Research said in a note early Monday.

"More immediately, Iraq must brace for the impact of the oil price slump which will deal a heavy blow to public finances and Iraq's oil-dependent external accounts".

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Iraq back from the brink with record oil figures