On top of that, a power struggle in Tehran between President Mahmoud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei is likely to intrude as the cartel deliberates how to handle a projected record global consumption of 89.2 million barrels per day.

Ahmadinejad, a hard-liner who is driving to increase his presidential powers, took control of Iran's energy industry after dismissing the oil minister as part of a Cabinet-trimming program.

Iran currently holds OPEC's rotating one-year presidency and Ahmadinejad had threatened to personally head the Iranian team at the Vienna meeting of the Organization of Petroleum Exporting Countries' oil ministers.

Given the exceptional volatility of the global energy market amid the political upheaval in the Arab world, and the consequent civil war in Libya that has cut off its oil exports, there were fears Ahmadinejad's presence would turn the meeting into a political battleground.

That danger seems to have been averted. The official Iranian news agency IRNA said Monday Ahmadinejad would send one of his ministers in his place.

But that would be seen as a step down by Ahmadinejad, who's not known for such actions, in his power struggle with Iran's conservatives and possibly imperil his efforts to control the Islamic Republic's biggest source of revenue, the Oil Ministry.

Iran's economy is feeling the pressure of harsh sanctions imposed by the United Nations in June 2010 for refusing to abandon its contentious nuclear program.

Follow-on sanctions by the United States and the European Union have intensified the crisis as Iran battles to boost the production capacity of its aging oil infrastructure to 4 million bpd.

The International Energy Agency, an inter-governmental agency in Paris representing the Western economies, pleaded with Middle East producers May 19 to boost production to keep global prices down and prevent damage to the global economy.

That unusual call was clearly designed to pressure OPEC ahead of the Vienna meeting with prices hovering around $111.70 a barrel.

OPEC has already hinted it might boost production but price hawks in the cartel have blamed the recent surge in oil prices on market speculators over whom it has no control.

OPEC has forecast that demand for its members' crude will rise by more than 2 million bpd for the third quarter of this year

But at present, the cartel's total output isn't expected to increase, meaning global inventories will be reduced by 1.1 million bpd.

The Financial Times noted Wednesday that the loss of Libya's 1.3 million bpd output for several weeks has been softened to some degree by European refineries reducing throughput during the "maintenance season."

But, it said, "This period is coming to an end, heralding a rise in demand for crude oil over the summer."

The Saudis have picked up the production slack to cover the loss of Libyan exports.

In a surprise move, Mohammad Ali Khatabi, Iran's permanent representative to OPEC, Wednesday pledged Tehran's help to overcome the current shortfall in the global crude supply.

That marks a departure from Iran's usual position as a leading hawk in the cartel that generally resists pressure to raise output in response to higher prices.

So that position could change before June 8.

Leonidas Drollas, chief economist of the Center for Global Energy Studies in the United Kingdom, observed that "Saudi Arabia dislikes acting unilaterally and it could ask OPEC members to raise their production quotas" during the Vienna summit.

But the cartel hasn't ordered any change in production quotas since December 2008.

Its oil ministers have met seven times since then as oil prices flipped between $40 and $125 per barrel without announcing any production hikes.

OPEC, Drollas said, was "only effective when the chips are down and prices are falling."

OPEC's spare production capacity has fallen to an estimated 4 million bpd, from 5 million bpd, or around 5 percent of global demand, in January, the IEA said.

Analysts are increasingly concerned that sustained high prices or further production losses due to the Middle Eastern turmoil could threaten the global recovery from the economic meltdown.

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