Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil output by around 1 million barrels per day (bpd), easing 17 months of strict supply curbs amid concerns that a price rally has gone too far, sources familiar with the matter said.
Such an increase would bring compliance with agreed supply curbs down to 100 percent from April's level of around 152 percent, the sources said.
The initial talks are being led by the energy ministers of OPEC kingpin Saudi Arabia and Russia at St. Petersburg this week along with their counterpart from the United Arab Emirates, which holds the OPEC presidency this year, the sources said.
OPEC and non-OPEC ministers meet next in Vienna on June 22-23, and the final decision will be taken there.
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million bpd until the end of 2018 to reduce global stocks, but the inventory overhang is now near OPEC's target.
The current discussions are aimed at relaxing record-high compliance with the production cuts, the sources said, in an effort to cool the market after oil hit $80 a barrel on concerns over a supply shortage.