The Iraqi government says it is hoping that an agreement to cut oil output by the Organization of the Petroleum Exporting Countries will help fund its fight against the Islamic State.

Oil revenues make up around 95 percent of the country's budget, with the country struggling since 2014 following a drop in oil prices.

The slump began just months after ISIL militants swept across northern and western Iraq. Since then, Iraq has struggled financially as it has tried to rebuild, rearm and provide aid to displaced families.

On Wednesday, the 14-member OPEC sealed a deal to lower its output in an effort to rebalance the oil market. The Iraqi government believes it will help revitalize its economy and cover war costs.