Iraq is seeking to postpone a final $4.6 billion installment of reparations for its 1990-91 occupation of Kuwait, Finance Minister Hoshiyar Zebari told Reuters, as it faces a cash crisis caused by falling oil prices and war with Islamic State, the news agency reported.

Since Iraq was first allowed to resume oil sales nearly two decades ago it has paid funds into a United Nations body overseeing compensation for looting and damage inflicted during Saddam Hussein's seven-month occupation of Kuwait.

More than a million claimants have been paid and nearly all the $52.4 billion reparations bill has been met through Iraq's annual allocation of 5 percent of crude oil exports to the U.N. Compensation Commission (UNCC).

But with its economy now set to shrink for the first time since the 2003 U.S.-led invasion toppled Saddam and ended more than a decade of sanctions, Iraq can ill afford to divert a large chunk of the 2015 budget to make that last payment due next year.

"We have been really committed to paying this on time up until now," Zebari said in a telephone interview conducted on Thursday. "We are in discussions with the Kuwaitis, trying to defer the payment for two years or at least a year, to allow some space... to present a realistic budget."

A senior UNCC official in Geneva said no decision had yet been made, and any change would require the agreement of the UNCC's Governing Council, which has same 15 member states as the U.N. Security Council.

"We are hearing the Governing Council will be considering the issue at a special session next week," the official told Reuters, adding that a meeting had been tentatively set for Dec. 18 in Geneva.

There was no immediate comment from Kuwaiti officials.