Speaking at the World Economic Forum at the Swiss ski resort of Davos, Khalid Al-Falih said he "would not exclude" another cut to follow last year's agreement if higher prices don't stick because of variables outside producers' control, such as a potential collapse in demand.

"I think Plan B is to be resilient and to be flexible and to deal with the circumstances," he said.

"There have been times in the past where OPEC has taken one action and then a few months later found out that that action was not sufficient and followed up with another action," he said. "We will not exclude that and that's why we're meeting up again in May."

Asked if that could involve further cuts, the minister said "if needed, absolutely."

However, he said his baseline expectation is that it "will not be necessary."

OPEC agreed in late November to cut its production by 1.2 million barrels a day to 32.5 million barrels, the first reduction agreed to by the cartel since 2008. Nearly a dozen other countries, including Russia, pledged in December to cut an additional 558,000 barrels a day.

Those cuts are due to expire in June and Al-Falih said an extension is also possible.

He warned that extending the cuts "could create a shortage too early which we don't want to."

"But if we find out ... that it's not enough, we will do what is necessary."

Oil prices are trading over $50 a barrel, nearly double the level they were a year ago, largely because of the production cuts.

For higher oil prices to stick, producers will have to show they are complying with their agreements.

Earlier Thursday, the Paris-based International Energy Agency said global oil output is dropping for the first time in months, as Saudi Arabia and other oil-producing countries follow through on the pledged cuts.

The IEA's monthly report on Thursday showed OPEC production dropped to 33.09 million barrels a day in December from 34.2 million the previous month.

The IEA's executive director, Fatih Birol, cautioned that the higher oil prices prompted by the production cuts could see a rise in output from U.S. shale gas producers.

And that newly increased supply could weigh on oil prices.

"Don't underestimate the shale gas reaction," he said.

Oil prices shot up to more than $100 a barrel in mid-2014 before a long slide sent them crashing below $30 in early 2016.

A number of factors hit prices, including worries over the scale of the economic slowdown in China and high supply from OPEC countries, notably Saudi Arabia, as they seemingly strove to drive U.S. shale gas producers out of business.

Now the higher prices may entice those shale gas producers to ramp up production again.