The Organization of Petroleum Exporting Countries could face another clash between Saudi Arabia and Iran as the cartel's oil production rises to a three-year high.

The 12-member cartel's output for September is expected to average 30.25 million barrels per day, up from 30.15 million bpd in August, the highest level for three years, as Iraq's exports increase and Libyan crude starts flowing again.

That's likely to result in Iran and Venezuela, the cartel's leading hard-liners, demanding Persian Gulf states cut back production they boosted in June to cover the loss of Libyan supplies caused by the conflict in the North African state.

The gulf states, led by Saudi Arabia, the world's leading oil producer, sought to boost OPEC production at a June 8 cartel summit to compensate for the Libyan cutoff and to lower oil prices but were blocked by Iran and Venezuela, both price hawks.

OPEC controls 40 percent of the global oil supply.

The Saudis and their Persian Gulf allies, the United Arab Emirates, Kuwait and Qatar, boosted production anyway.

But their rebuff by a majority of cartel members pointed to a shift of power within OPEC away from Saudi Arabia, which has long dominated the 50-year-old organization.

Riyadh quietly increased its production after Vienna, going from around 8.5 million barrels per day to above 9 million bpd for the first time since 2008.

Prices were depressed during the summer after the U.S. Strategic Petroleum Reserve released 30 million barrels onto the market. Crude inventories outside the United States are at their lowest levels in nine years.

Saudi production is currently 9.8 million bpd. All told, that has reduced OPEC's effective spare production capacity, largely in the hands of the gulf producers, to less than 1 million bpd.

Globally speaking, that's a very thin margin and with Libya coming back on stream, Iraq boosting production to 2.8 million bpd and Nigeria's output climbing again after shedding around 1 million bpd because of a Niger Delta insurgency, the Saudis may well feel they can, and should, cut back.

But the kingdom's intensifying cold war with Iran is likely to herald further conflict within OPEC.

An eruption of violence Monday by the disgruntled Shiite majority in Saudi Arabia's Eastern province, the heart of the Sunni kingdom's oil industry, has raised suspicions it was engineered by Shiite Iran.

Relations between Riyadh and Tehran have been extremely tense since mid-March when Saudi-led forces of the Gulf Cooperation Council moved into Bahrain to help the Sunni monarchy crush pro-democracy protests by the island's kingdom's Shiite majority, also seen as inspired by Iran.

If Riyadh and its friends don't cut back on production and prices keep slipping, Iranian officials have indicated that Tehran may call an emergency meeting of OPEC in advance of a scheduled gathering in December.

Iran, grappling with international sanctions imposed in June 2010 over its refusal to abandon its contentious nuclear program, wants to keep oil prices high to help it ride out the sanctions.

The Wall Street Journal reported that OPEC members earned $745.1 billion from their oil exports in the first half of the year, an increase of 27 percent.

The Saudis and the Persian Gulf monarchies are much more amenable to U.S. and Western requirements to keep prices down, in return for Western protection.

But things are changing. The Saudis, having seen Washington throw Egyptian President Hosni Mubarak to the wolves in a pro-democracy uprising in February, are concerned that the United States can no longer be trusted to stand by them.

At the same time, the Saudis now sell more oil to the Far East, particularly China, than to the West, which changes Riyadh's strategic outlook.

And in July OPEC acknowledged that Venezuela, Iran's ally, has proven crude reserves of 296.5 billion barrels.

That's a 40 percent jump from the 2010 figure and pushes aside Saudi Arabia which had held the top slot for decades. The kingdom has known reserves of 264.5 billion barrels.

Venezuela's new status gives it added weight within OPEC, disadvantaging Saudi Arabia.

Recent increases in reserves announced by Iran and Iraq, which sided with Venezuela at the bitter June 8 OPEC meeting, "may in the long run empower members of OPEC that favor defending higher prices," the Journal observed.