Saudi Arabia has kept its crude oil production steady in May, a sign that the world's biggest oil exporter does not plan to flood the market to gain more market share.

Saudi Arabia's crude oil production in May was 10.270 million barrels per day, an industry source told Reuters on Monday. This compares with 10.262 million in April, according to Opec.

But crude supplied to the market in May was higher than production at 10.450 million bpd, the source said. Supply to the market, both domestically and for export, may differ from production depending on the movement of oil in and out of storage.

Saudi-based industry sources told Reuters in April that the kingdom's oil output may edge up close to record highs during the hot summer months to meet domestic power demand but is unlikely to be pushed to the limit.

The sources said production would likely stay at 10.2-10.3 million bpd and could rise by some 200,000-300,000 bpd in the hot summer months to around 10.5 million bpd, if there was demand for it. The kingdom pumped 10.56 million bpd, a record, in June last year.

Riyadh effectively scuppered plans for a global production freeze aimed at stabilising oil markets in April. It said then that it would join the deal, which would also have involved non-Opec Russia, only if Iran agreed to freeze output.

Tehran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran's nuclear programme.

This raised fears that failure to reach any deal would prompt Saudi Arabia, Opec's largest producer, already pumping near record highs, to raise production further to punish rivals and gain additional market share.

But in a shift in oil thinking, Saudi Arabia and its Gulf allies had tried to propose Opec set a new collective ceiling earlier this month in an attempt to repair the exporting group's waning importance and mend fences within the organisation.

The June 2 meeting ended with no new policy or ceiling amid resistance from Iran.

Despite the setback, Saudi Arabia, led by its new Energy Minister Khalid Al-Falih, showed it wanted to be more conciliatory with Tehran and promised not to flood the oil market. -Reuters