OPEC looking closely at Venezuelan oil output drop - sources
* Venezuelan oil supply loss helps OPEC over-deliver on cut
* UAE suggests Venezuela a bigger issue than Iran sanctions
* OPEC downplayed Venezuelan loss when stocks were higher
* OPEC meets on June 22 to set policy
LONDON, May 21 (Reuters) - OPEC is looking closely at a drop in oil output from Venezuela to see if the loss of supply from the member state warrants action by the group, sources familiar with the matter said.
This marks a shift from earlier this year, when OPEC officials downplayed the drop in Venezuelan production. And it follows a rise in prices and a decline in global inventories that is making tighter supply more significant.
Falling Venezuelan output due to an economic crisis has helped the Organization of the Petroleum Exporting Countries deliver a bigger cut than intended under its pact with Russia and other producers to curb supplies and remove a global glut.
The pact, which began in January 2017 and runs to the end of 2018, will be reviewed when OPEC meets on June 22 to review policy. OPEC's compliance with the deal reached an unprecedented 166 percent in April, meaning it has cut well above its target.
"Maybe, if the market is tight, there will be a need to make some adjustment," one OPEC delegate who declined to be identified said, referring to the June meeting.
Global inventories have eased back close to their five-year average, the measure originally targeted by OPEC and its allies.
The output reductions combined with worries about supply disruptions due to U.S. sanctions on Iran pushed oil prices above $80 a barrel last week, the highest since November 2014.
Brent crude, the global benchmark, was trading at $78.33 on Monday.
Iranian supply has not yet been affected by the U.S. decision to withdraw from an international nuclear deal and its warning of that it would impose touch sanctions.
The energy minister for the United Arab Emirates, which currently holds the OPEC presidency, said last week that OPEC had more significant issues to deal with than Iran. He cited Venezuela.
LONG-TERM LOW
Before ministers from OPEC and its allies meet, Venezuelan output will feature in technical meetings including the Joint Technical Committee, which meets in Jeddah on Tuesday and Wednesday, as well as other such meetings expected in June.
Oil output in Venezuela hit a long-term low of 1.505 million barrels per day in April, almost 500,000 bpd below its OPEC output target. Venezuela's leftist leader Nicolas Maduro won a new, six-year term on Sunday.
"It will be discussed at the next meeting, for sure," a second OPEC delegate said of Venezuelan production.
OPEC is looking more closely at Venezuelan output as global inventories approach the supply cut deal's original target.
Oil inventories in OECD industrialized nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017, according to OPEC figures.
Drawing stocks back to that average was the supply deals main goal, but officials have since said other metrics, such as oil industry investment, need to be considered.
When inventories were higher earlier this year, officials had downplayed lower Venezuelan output. In January, a senior OPEC source ruled out raising output "even if there was a supply disruption" from Iran or Venezuela.
Although the tone has now shifted, OPEC is not yet convinced a change in June to the deal on cutting supplies is warranted.
"We should let the agreement go on," said a third OPEC delegate, adding that adjustments could be made later in the year if needed. (Additional reporting by Rania El Gamal Editing by Edmund Blair)