Oil prices drop after Iran signals it might agree to Saudi production increase

Oil prices have dropped after Iran signaled it might agree to Saudi-Russian plans for small increases to production by OPEC members.

Prices of Brent Crude were down to $73.34 on Thursday, after highs earlier this month of around $80, while US light crude CLc1 dropped $1 to $64.71.

Tensions between Iran and Saudi Arabia broke out days before OPEC's meeting on Friday in Vienna, with Tehran indicating it would probably not abide to the cartel's plans to cut production.

Russia and Saudi Arabia agreed to increase outflow by around 1.5 million barrels a day to steady the market as US sanctions on Iran and political instability in Venezuela are expected to affect global production.

A potential trade war between the US and China could seriously impact on demand. Meanwhile, production in the US remains high.

Saudi Arabia's energy minister said that after years of production cuts - when oil prices plummeted in 2014 - it's time to turn back on the tap.

"We need to release supply to the market," Energy Minister Khalid al-Falih said, according to Reuters.

Riyadh and Moscow agreed to cut production last week, following Saudi Crown Prince Mohammed bin Salman's visit to Russia for the World Cup.