Newly released drone vision has revealed the devastation burning oil fields are having on communities near the Iraqi city of Mosul.

Aid agencies said Islamic State militants had set fire to at least 19 oil wells in the Qayarrah district, south of Mosul, as they were forced to retreat by Iraqi forces.

“Even after ISIS has left, many of the people living amid its trail of destruction have told us that life remains unbearable,” Oxfam’s country director in Iraq, Andres Gonzalez, said.

“Burning oil wells continue to spew out toxic fumes that burn people’s throats and turn their communities into a smoke-filled hell.”

An 8-year-old boy plays next to the burning oil fields. Photo: Supplied: Joey L, Oxfam

PHOTO: Firefighters try to extinguish flames at the oil field in Qayyarah district, south of Mosul. Photo: Supplied: Joey L, Oxfam

Aid agencies say Islamic State militants are setting fire to oil fields as they retreat from Mosul. Photo: Supplied/Joey L, Oxfam

A burning oil field in Qayyarah district spews out toxic fumes. Photo: Supplied: Joey L, Oxfam

Smoke from the burning oil fields engulfs houses in Qayyarah district. Photo: Supplied: Joey L, Oxfam

Aid workers said doctors had reported a shortage of medicine as they treat many patients for bronchitis.

Oxfam said it was helping to provide clean drinking water to residents in the Qayarrah district.

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The situation around Mosul has become more desperate with a key water pipe destroyed during fighting, UNICEF said.

An offensive to drive Islamic State militants out of their last major city stronghold in Iraq was launched last month and more than 70,000 civilians are said to have fled the city.