Oil prices rose on Tuesday as an oil workers strike in Kuwait nearly halved crude production from the Organization of the Petroleum Exporting Countries (OPEC) member, overshadowing bearish sentiment following Sunday's failure by oil producers to agree to freeze output levels.

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Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd), according to an oil spokesman cited by news agency KUNA.

That is little more than half of Kuwait's average output of 2.8 million bpd in March.

"The Kuwaiti strike is supporting prices," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

Brent crude futures, the global benchmark, traded at $43.31 a barrel at 0828 GMT, 40 cents above Monday`s close. US crude futures were up 33 cents at $40.11 a barrel.

However, analysts said Kuwait`s disruption would likely be brief and that investors would soon again focus on the market`s oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.

"In the coming days oil production is likely to partially recover from its initial drop as non-striking staff is redistributed and inventories drawn upon, avoiding a force majeure on loadings," policy risk consultancy Eurasia Group said.

A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.

After failed negotiations, exporters have shifted attention back to their own interests.

Russia`s Deputy Energy Minister Kirill Molodtsov said on Tuesday the country was considering raising oil production this year, possibly targeting a level of 540 million tonnes of crude. Russia produced 534 million tonnes of oil last year.

OPEC member Venezuela said it hoped to raise oil exports this year to 2.3 million bpd.

Additional barrels threaten to boost a global supply glut that has brought prices to multi-year lows as 1-2 million barrels of crude are pumped every day in excess of demand.