Saudi Arabia says OPEC and Russia could supply more oil to world markets "in the near future" to make up for a collapse in Venezuelan output and the impact of US sanctions on Iran.
Speaking during a panel discussion hosted by CNNMoney's Emerging Markets Editor John Defterios, Saudi energy minister Khalid Al-Falih said he was engaged in intensive discussions with Russia and other OPEC officials about how to balance the oil market.
"It is the intent of all producers to ensure that the oil market remains healthy, and if that means adjusting our policy in June, we are certainly prepared to do it," Al-Falih said.
OPEC oil producers and Russia are due to meet in Vienna on June 22 to discuss easing supply curbs that have helped drive world oil prices to $80 a barrel, raising gas prices and hurting big energy importers such as India.
"Two years ago we pulled supply. I think in the near future there will be time to release supply," Al-Falih said. "It's likely that it will happen in the second half of this year. We've had intensive discussions [with Russian energy Minister Alexander Novak], and I think we're aligned on that," the Saudi official added.
"Whether it's a million barrels [or] more or less, we think we'll have to wait until June before making that announcement," he said.
Production increases would be gradual to avoid delivering a shock to the market, Al-Falih added.
US crude futures plunged 4%, their steepest decline in nearly a year, and closed below $68 a barrel. Brent crude fell nearly as much to $76.11 a barrel.
After prices crashed to $26 a barrel in 2016, OPEC and a group of non-OPEC nations agreed to cut oil production by about 1.8 million barrels per day from the beginning of 2017.
The supply curbs were due to continue until the end of 2018, but Novak told CNNMoney on Thursday that Russia was prepared to increase production sooner if necessary, after careful study of the market situation, including the longer term impact of sanctions on Iran.
"But this should be a unanimous decision by all parties involved. And I believe that all of this will be discussed in June ... when we gather together and only then can any decisions be made."
Iran ramped up its oil production by 1 million barrels per day after sanctions were lifted in early 2016. At least some of that oil will now be pulled from the market.
-- Alice McCool contributed to this article.