The Organization of the Petroleum Exporting Countries is hosting a number of events in Vienna this week, but the meetings set for Friday and Saturday are expected to yield decisions on crude production that could shake up the oil market.
Saudi Energy Minister Khalid al-Falih also said on Wednesday that the market demanded more oil in the second half of this year and that OPEC was moving toward "a good decision".
The cartel would be the biggest beneficiary of possible Chinese tariffs on United States oil imports, as these could help it regain market share, OPEC sources and industry officials tell Reuters. After arriving on Tuesday, the Iranian oil minister, Bijan Zanganeh, threatened to veto a Saudi and Russian-led drive to raise output, and observers said "the body language has been awful".
"While we are not in favour of prices as low as $30 per barrel, we also do not support the prevailing high price which dent our fiscal balance and undermine our development process", Mr. Pradhan added.
Mr Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the global nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran's crude exports.
OPEC agreed on Friday on a modest increase in oil production from July after its leader Saudi Arabia persuaded arch-rival Iran to cooperate amid calls from major consumers to help reduce the price of crude and avoid a supply shortage.
The Iranian publication Seda quoted anonymous sources as saying Zanganeh told the other producers that the proposed increase would pave the way for cuts in Iranian oil output that are likely to result from a reimposition of US sanctions against Iran in the fall.
Brent crude last month surged to a more than three-year high above $80 a barrel.
Brent crude dropped 95 cents, or 1.3 percent, to $73.79 a barrel by 11:13 a.m. EDT after earlier hitting a session low of $72.94.
As tensions mounted, the Iranian and Saudi ministers huddled for bilateral talks on Friday morning, holding up the start of the closely watched OPEC meeting.
Other OPEC-members, including Iran, are against such a move, fearing a sharp slump in prices. "We are in for higher prices for longer", he said. A big OPEC deal- adding more than 1 million barrels - could cause prices to dip into the $2.60s or $2.70s this summer, he said.
"There was a lot of anticipation in the market that there was going to be a lot of new oil coming to market, and that isn't going to happen, at least for now", said John Kilduff, a partner at Again Capital.
"We want to prevent the shortage and the squeeze that we saw in 2007-08", Falih said, referring to a time when shortages sent premium-crude-oil prices soaring to an unprecedented $150 per barrel and ushered in a major boom-bust cycle that devastated the oil sector for a decade.
"If the volume of spare capacity goes down then the market gets much more vulnerable to supply shocks", said Essner, the Nasdaq analyst.