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Stefan Wermuth/AP Photo Iraq's Prime Minister Haider al-Abadi speaks during a press conference at the Foreign and Commonwealth Office in London, Jan. 22, 2015.

LONDON Plunging oil prices have wreaked havoc on Iraqs budget, and it cannot pay for the weapons, ammunition and equipment it needs to beat back Islamic State militants from large swaths of its territory, Iraqs prime minister said Thursday.

Iraq has asked the United States and its allies to defer payments on some munitions it urgently needs, Prime Minister Haider al-Abadi said at a conference of 21 nations most actively involved in combatting jihadi fighters in Iraq and Syria. With oil revenue responsible for 85percent of the nations budget, Abadi said, the 40percent drop in prices over the past year has been disastrous for Iraqs government.

We do not want to see a reverse of our military victory due to our budget and fiscal problems, he said, appearing at a news conference with Secretary of State John F. Kerry and British Foreign Secretary Philip Hammond at a conference of nations in the U.S.-led coalition against militants fighting on behalf of a group alternately known as the Islamic State, ISIL, ISIS and Daesh. And we have been assured that every member of this coalition will stand [with] Iraq in its fight against Daesh.

Abadi said the Iraqi government has asked coalition forces to accept deferred payments for munitions and armaments and said the U.S. Air Force had already transported some weaponry from European countries, items he described as free of charge from our coalition partners.

Ive asked for more support, Abadi said. And I think my call didnt go unnoticed.

His dire assessment of Iraqs fiscal condition came as Kerry and Hammond said with confidence that allied forces had halted and in some cases reversed the momentum of the Islamic State. Kerry said almost2,000 airstrikes had killed thousands of fighters in Syria and Iraq and forced Islamic State fighters to retreat from 270squaremiles of territory it once controlled.

Kerry said the coalition members were determined that those gains would not be jeopardized by Iraqs inability to pay.

Let me assure you that this effort is not going to be deterred or diminished or defeated by virtue of the fact that were not going to get the supplies and ammunition necessary to carry it out, he said.

Kerry noted that the United States recently delivered 250MRAPs, armored vehicles developed to protect troops from mines and roadside bombs and now in surplus with the end of the war in Iraq and the troop drawdown in Afghanistan. Kerry also said that the United States is about to deliver a shipment of M-16 rifles. American teams are training12 Iraqi brigades to retake the cities of Mosul and Fallujah.

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Oil price drop hurts Iraqs fight against Islamic State