On Friday the UN Security Council unanimously adopted a resolution allowing Baghdad to spend $1.2bn a year on oil industry spare parts - double the previous figure.
Before the vote, when a favourable outcome already appeared likely, Iraqi oil minister said: "When good insists ... evil backs down."
He described the UN action a victory for Iraq.
Under a council resolution adopted last December, Iraq is allowed to sell as much oil as it wishes within the UN oil-for-food programme.
However, Iraq had not been able to increase oil production because of damage sustained by oil pumping stations.
Iraq's oil industry was specifically targeted during the Gulf War and has been decimated by neglect during nearly 10 years of sanctions.
Oil-for-food
The UK's ambassador to the UN, Jeremy Greenstock, urged Iraq to take advantage of the new resolution.
He said it would enable Baghdad to export more oil and buy more goods to meet the needs of its people.
"This extra revenue and the welcome decision by the government of Iraq to increase its oil production will bring a significant new element of cash into the oil-for-food programme", Mr Greenstock said.
The oil-for-food programme permits Iraq to sell crude to buy humanitarian supplies to ease the effects of punishing sanctions imposed after its 1990 invasion of Kuwait.
About 60% of the money raised through the oil sales goes for the purchase of civilian necessities, under tight UN monitoring.
The remainder is siphoned into UN accounts to pay reparations to Kuwait and to meet other costs stemming from the Gulf War.
Annan's warning
The council said it was acting on the recommendation of Secretary General Kofi Annan.
The secretary general had warned in a report on 10 March that unless Iraq had more access to industrial spare parts, oil production would drop off, causing the flow of humanitarian supplies to Iraqi people to decrease dramatically.
In a debate on the humanitarian situation in Iraq last Friday, Annan told the council that the deterioration of Iraq's oil industry threatened to undermine the oil-for-food programme.