"There is a dilemma. What should we do with OPEC: should we lose the market, which is being occupied by the Americans, or quit the deal?" Anton Siluanov, speaking in Washington, said, TASS reported.

"(If the deal is abandoned) the oil prices will go down, then the new investments will shrink, American output will be lower, because the production cost for shale oil is higher than for traditional output."

Siluanov said oil prices could drop to $40 per barrel or even less for up to one year.

The minister said there had been no decision on the deal yet and he did not know whether OPEC countries would be happy with this scenario.

OPEC, Russia and other producers, an alliance known as OPEC+, are reducing output by 1.2 million bpd from Jan. 1 for six months. They meet on June 25-26 to decide whether to extend the pact.

The combined supply cuts have helped to drive a 32 percent rally in crude prices this year to nearly $72 a barrel, prompting US President Donald Trump to call on OPEC to ease its market-supporting efforts. OPEC has said the curbs must remain, but there are signs that stance is now softening.

Earlier this week, sources familiar with the matter told Reuters that OPEC could raise oil output from July if Venezuelan and Iranian supply drops further and prices keep rallying, because extending production cuts with Russia and other allies could overtighten the market.