Some OPEC+ representatives have indicated that the organization is expected to agree to a modest production increase during its meeting this weekend, which would conclude a three-month pause in output hikes. The group is preparing for the peak summer demand season, while escalating tensions between the United States and OPEC member Iran have also driven up oil prices.

On Wednesday, oil prices hovered near seven-month highs as persistent investor concerns over potential supply disruptions from a U.S.-Iran military conflict continued to weigh on markets. Talks between the two sides are scheduled for Thursday. IG market analyst Tony Sycamore noted in a report, "Trump has warned of 'very bad consequences' if no deal is reached. It remains to be seen whether Iran's concessions can meet the U.S. 'zero enrichment' red line."

According to representatives who requested anonymity due to the private nature of the negotiations, the Saudi- and Russia-led producer alliance has not yet finalized its decision ahead of a video conference scheduled for this Sunday. Eight OPEC+ nations—Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman—will hold a meeting on March 1.

Despite widespread market expectations of a supply surplus, oil demand has remained robust, with prices rising approximately 17% this year. In light of this, three officials stated that OPEC+ may consider increasing daily oil output by 137,000 barrels in April, a move consistent with the minimal increments seen at the end of last year. Another official suggested that while such a decision is possible, it is not yet certain, as the risk of escalating conflict between the U.S. and Iran clouds the outlook.

Additionally, two sources familiar with Saudi plans revealed that Saudi Arabia, OPEC+'s largest producer, has initiated a short-term surge in oil production and exports to prepare for potential disruptions to Middle Eastern oil supplies resulting from U.S. actions against Iran.

Although prominent forecasting agencies had previously warned of a significant supply surplus this year, this has so far not weighed heavily on oil prices. This is partly due to escalating geopolitical risks, as well as a series of production disruptions ranging from North America to Kazakhstan and Russia.

An ING Groep NV commodities strategy team stated on Wednesday, "This uncertainty means the market will continue to price in a high risk premium and remain sensitive to any new developments."

U.S. shale giant Diamondback Energy said on Monday that the so-called "wave of oversupply" is being further delayed. This view was echoed the following day by one of the world's largest oilfield service providers, Baker Hughes.