Iraq produced 3 million barrels of oil a day in the last month, which moved the country from third to second place in terms of oil output.
Iraq overtook the second-largest OPEC oil producer Iran for the fist time since 1980.
Iran's oil production reduced to below 3 million barrels of oil per day due to the impact of US and Western sanctions on Tehran and the stable recovery of Baghdad's oil production.
Iran last month produced 2.9 million barrels of oil a day, reported the Financial Times.
Oil analyst at the Center for Global Energy Studies Manouchehr Takin said: "The different production paths show the huge impact of politics in oil and the Middle East."
Iran produced 1 million barrels a day fewer in comparison with five months ago due to increasing sanctions such as the combined impact of US sanctions against Tehran, a full EU embargo on the country's crude exports and a de facto global ban on maritime insurance for Iranian oil supertankers.
Iraq signed many contracts in the last four years and it is the country's policy to sign more oil contracts with foreign giants like Exxon Mobil, Royal Dutch Shell, BP, France's Total, Russia's Lukoil and China's CNPC to develop oil infrastructure and to reach targets.
Iraq's new target is to produce 12 million barrels a day by 2017.