Saudi Arabia could further boost its crude oil output and take it to a new record in August as Opec’s biggest oil exporter gets ready for talks next month for a global output freeze pact.

The kingdom had held the output steady for the first half of this year but started to increase the level from June to meet rising seasonal domestic demand as well as higher export requirements.

Higher production could give it more leverage during talks in September when both Opec and non-Opec producers are expected to revive a freeze deal to support oil prices, news agency Reuters reported, citing unnamed industry sources.

Saudi Arabia appears to want higher prices, but agreeing a level to freeze supplies will be the main obstacle to a deal.

The kingdom in pumped 10.55 million barrels a day (b/d), and lifted production to 10.67 million b/d in July, the record level of crude production for the country. With demand inside and outside of the Saudi Arabia looking healthy, it is expected to raise it further this month.

Saudis are quietly telling the market that output could rise further in August to as high as 10.8-10.9 million b/d, overtaking the world’s top oil producer Russia which currently producing 10.85 million b/d, the report cited a non-Opec source as saying.

Saudi Energy Minister Khalid al-Falih last week clarified the hike in production in July which was mainly due to increasing seasonal domestic demand and customers asking for more oil worldwide.

“Despite the bearish sentiment engulfing the market, we still see strong demand for our crude in most parts of the world, especially as supply outside Opec has been declining fast, supply outages increasing, and global demand still showing signs of strength,” he told state news agency SPA.

The amount of crude supplied to the market in July was 10.75 million b/d, above actual output as Saudi drew down the additional barrels from inventories, SPA reported.

Oil prices dropped to $27 a barrel in January from $115 a barrel peak of mid-2014. The slump in prices has affected the financial muscle of the oil exporting Gulf states including Saudi Arabia which is facing a fiscal deficit of estimated $87bn this year.

A previous attempt to freeze output at January levels to support prices collapsed in April after Saudi Arabia said it wanted all producers, including Iran, to join the initiative.

But since the appointment of Falih in April, Saudi Arabia has taken a softer tone towards Iran at Opec and the group may revive talks on freezing output when it meets non-Opec nations next month in Algeria.

In January when the freeze idea first emerged, Saudi Arabia was producing 10.2 million b/d.

Iran is also advocating increasing production. Iranian Oil Minister Bijan Zanganeh said in parliament last week he wanted to take the country’s output to 4.6 million b/d within five years - well above the pre-sanction levels of 3.8-4 million b/d.

Iraq, Opec’s second largest producer, which said in April it would support the freeze deal, has since agreed new contract terms with oil majors to develop its massive fields, which will allow output to rise further next year by up to 350,000 b/d.

Russia, which back in April was ready to freeze production in the first coordinated action with Opec since 2001, has also signalled it is no longer very keen on a dialogue to freeze output and would continue boosting production.