BAGHDAD — Iraq has raised oil exports to a post-invasion high, earning billions of dollars to pay for reconstruction after Baghdad cracked down on sabotage of its strategic pipelines, the oil minister said Sunday.

Iraqi oilfields are pumping more than 2.5 million barrels per day, he said, the highest since the 2003 U.S.-led invasion. Iraq will produce up to 2.9 million barrels per day by the end of 2008, he said.Shahristani declined to comment on export levels for June, but Iraqi oil officials said last month shipments would run slightly higher because of extra Kirkuk sales from the north.

He is optimistic Iraqi forces would keep security tight at oil facilities and raise the confidence of foreign investors discouraged by sectarian violence as al-Qaida and Shiite militants had a grip on Basra, home to Iraq’s biggest oilfields.

“We are going to make steady progress on security and the reconstruction front,” he said.

Iraq, whose primary source of revenue comes from oil, needs large amounts of investment to rebuild after years of sanctions and the war’s battering of the OPEC member’s economy.

Sky-high oil prices have raised the prospects of a quicker recovery. Oil is still within sight of a record $135 a barrel hit last month, supported by a weak U.S. dollar and concern supplies will struggle to match demand in the longer term.

Strong prices could improve Iraq’s chances of meeting goals set out in a 10-year plan to raise production and exports.

The U.S. military says violence in Iraq is at a four-year low after crackdowns by U.S. and Iraqi forces on Shiite militias in southern Basra and Baghdad and on al-Qaida in the northern city of Mosul, its last major urban stronghold.

“Iraq has improved the overall security situation in the country through its military operations in the south against the militias and in Mosul area against al-Qaida and in Baghdad itself,” Shahristani said.

“I believe the improvement in the security is real and is going to last. Al-Qaida has basically been defeated in Iraq.”

Starved of access to oil and gas prospects by governments that increasingly favor development by their state oil companies, Western oil companies are eager to invest in Iraq, home to the world’s third biggest oil reserves.

However, the security situation and an uncertain legal framework have deterred the major companies from making significant investment.

But Baghdad expects to see activity this summer.

Major oil companies have all turned in their proposals for oil service deals, and some will be signed this month.

Shahristani had warned that Baghdad might drop the oil service contracts, worth about $500 million apiece, if the major companies failed to sign deals this month.

“If we are talking about the technical support contracts, then all the major companies have submitted their proposals and we are studying these proposals and we expect to be able to sign some of them this month,” he said.

Iraq is negotiating six short-term service contracts with international oil companies, each aimed at boosting production by 100,000 barrels per day.

Five of the deals under discussion are with oil majors Royal Dutch Shell, Shell in partnership with BHP Billiton, BP, Exxon Mobil and Chevron in partnership with Total.

Iraq is in talks with a consortium of Anadarko Vitol and Dome for a sixth contract on the Luhais field.

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