The Organisation of the Petroleum Exporting Countries (Opec) will meet in Vienna this week, with members split on whether to end its production freeze.
Oil prices soared last month, and are still up at $76 per barrel, more than double what they were when the group introduced a cap on production in 2016.
Brent crude hit a 42-month high in May after US President Donald Trump announced his withdrawal from the Iran nuclear deal.
The group may be considering lifting the cap altogether, says David Madden market analyst at CMC Markets UK:
“The US asked Saudi Arabia to raise its output to offset the situation in Iran, and there is talk that Saudi Arabia and Russia are keen to ease up on the production freeze agreement.”
Donald Trump’s repeated calls of foul play, as well as Russian calls to increase production, may also be weighing on the minds of Opec members:
Oil prices are too high, OPEC is at it again. Not good!— Donald J. Trump (@realDonaldTrump) June 13, 2018
The oil organisation has sought to stabilise prices by cutting production of some 1.2m barrels a day, with Russia also cutting some 600,000 barrels.
In November, the agreement was extended to the end of 2018, but analysts suggest at least a moderate increase in production is likely.
However, according to Russ Mould, investment director at AJ Bell, there are several complicating factors which may steady OPEC’s hand.
Oil production in Venezuela, Libya and Nigeria has dropped off so, even if Saudi Arabia does increase production, the total Opec output may not rise, keeping prices stable.
Also complicating things is the fact that Iran may soon be shunned from the global market thanks to US sanctions, while production of American shale is increasing.
Meanwhile, some member countries remain deeply skeptical of an increase: Venezuela and Iran have the most to lose, and last week, Iraq’s oil minister, Jabbar al-Luaibi, said raising output could "damage the international market."
Furthermore, says Mould, “the Saudis won’t want to see oil go down too much, as they need the revenues to balance their budget and Riyadh is still looking to float its national oil firm, Aramco, on a stock exchange somewhere in the not-too-distant future.”
“The key here, then, is to see whether Opec and Russia agree to stick to the production cuts (or even extend them into 2019), which could support the price of crude, or back off, could weaken oil.”