Iraqi Oil Minister Adel Abdel Mahdi said Sunday he expects the price of crude oil, which dropped to a six-year low in January, to continue recovering to reach $64 or $65 per barrel.

"I don't think they (prices) will return to their former levels immediately... We expect them to rise more, probably to $64 or $65," he told reporters.

Brent North Sea crude, the global benchmark, had tumbled to $45 per barrel at the beginning of the year, less than half the level reached six months earlier. It surged to $62 on Friday.

Iraq, which is hugely dependent on oil exports for revenue and is fighting a costly war against the Islamic State jihadist group, also owes more than $20 billion to the oil companies operating in the south, Abdel Mahdi said.

"In 2014, we paid what we owed for 2013 and delayed some payments for 2014... On top of that, there's what we owe for 2015," he explained.

Abdel Mahdi said that besides a budget allocation of close to $12 billion to pay those dues he planned to ask the government to issue the same amount in treasury bonds.

"Fulfilling those commitments is important to our relationship with these companies" and the future of the country's oil industry, he said.

Iraq's 2015 budget is based on an average oil price of $56 a barrel.