NEW DELHI: When the Islamic State began gaining ground in Syria and Iraq, economic pundits reasoned that the violence and subsequent lowering of production in oil fields would push up oil prices. The pundits were proved right as oil prices rose in 2013.

As the battle in Syria and Iraq raged, drawing in a host of other countries as part of a US-led coalition, oil prices -- contrary to everyone’s predictions and defying economic logic -- began to fall. Rapidly. The reason for this fall is complicated -- ranging from an increase in oil produced by “fracking” in the US to deliberately keeping the OPEC prices low to hurt Russia, on whom the US and other western countries have imposed a series of sanctions over its support of rebels in Ukraine. Oil and natural gas form 70 percent of Russia’s exports.

The strategy to keep oil prices low -- reportedly tabled during a meeting between US Secretary of State John Kerry and the Saudi King Abdullah (who is since deceased) in June 2014 -- seems to be having a limited effect on Russia, which has signed deals in China to compensate. However, other countries are most certainly feeling the impact.

On Thursday, Iraq’s Prime Minister Haider al-Abadi said that he feared that this global fall in the price of oil could adversely affect his country’s fight against the Islamic State. "Oil prices have dropped to about 40 percent of their level last year. Iraq's economy and budget relies 85 percent on oil and this has been disastrous for us," he told a news conference. "We don't want to see a reverse of our military victory due to our fiscal and budget problems."

“This has been disastrous for us,” Abadi continued. “One thing we are asking for is deferred payment. That’s one solution. And I think our coalition partner has been very receptive of this.”

Abadi’s comments in turn came as US Defense Secretary Chuck Hagel hit out at the Iraqi Prime Minister’s recent comments over the slow pace of US-coalition led efforts to aid Iraq. "I do disagree with the prime minister's comments. I would say, even further, I don't think they're helpful," Hagel told a news briefing. "We have a coalition of over 60 countries that have come together to help Iraq. And I think the prime minister might want to be a little more mindful of that."

The comments Hagel was referring to were made to the Associated Press on Wednesday. Abadi said “we are in this almost on our own.”

The Iraqi Prime Minister’s stance is at variance with the US position, with President Obama highlighting the US role in the fight against the Islamic State in his State of the Union address earlier this week. Kerry followed with reiterating that 50 percent of the Islamic State’s “top command” had been killed and that much of the oil and gas infrastructure that the Islamic State uses to fund its operations had been destroyed.

Despite these claims, the Islamic State continues to gain ground in Syria and Iraq, and remains very much a threat judging by the Iraqi Prime Minister’s statements.