The Middle East-dominated producer group agreed to implement massive crude productions cuts in 2020 in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock. The group, led by Saudi Arabia, has since initiated monthly meetings in a bid to navigate production policy and has already announced plans to increase supply by 2.1 million barrels per day between May and July. It will decide on Thursday whether to leave production policy unchanged or to ramp up supply further. Analysts say the most probable outcome is for an increase of around 500,000 barrels per day in August.

Chris Midgley, global head of analytics at S&P Global Platts, told CNBC via email that OPEC kingpin Saudi Arabia would likely maintain a “cautious” approach to production policy. This is because Riyadh would prefer to see global demand increase before adding supply and remains concerned about when Iranian oil could return to the market, he said. “OPEC is treading a tight rope to sustain more attractive prices without hurting consumer confidence while not adding too much supply ahead of the weaker Autumn shoulder period for demand,” Midgley said.

The U.S. and Iran have been discussing the possibility of a new nuclear record. If that happens, Iran could return at least 1 million barrels a day to the market. The timing is unclear, however, and the oil would have to be absorbed into OPEC’s production total if a deal is struck. “The global oil market is calling out for a substantial increase in supplies, but the Saudis are unlikely to oblige,” Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note. “A smaller than expected return of oil should ensure that the market continues to draw down inventories over [the second half of the year]. But just as importantly, it also leaves the market in no doubt that the OPEC+ alliance, or better said Saudi Arabia, has full control of the oil market,” Brennock said.

International Brent crude futures traded at $76.54 a barrel during afternoon deals in London, up 2.6% for the session. WTI Crude futures stood at $75.23, around 3.1% higher, climbing to its highest level since October 2018. Oil prices have rallied more than 45% year-to-date, supported by an easing of Covid-related restrictions, an uptick in goods transportation and increased air travel. Analysts on Wall Street still see plenty of room left to run in the coming months.

However, the spread of the delta Covid-19 variant worldwide has heightened concerns of a set back to oil demand. Renewed lock down measures and rising costs have already resulted in slower factory growth in China, for instance. “I think they will play it rather cautiously,” Martijn Rats, chief oil analyst at Morgan Stanley, told CNBC’s “Street Signs Europe” on Thursday. “There are some genuine uncertainties that OPEC will need to navigate over the next 18 months, the precise trajectory of the demand recovery, when Iranian exports will increase again [and] what shale will exactly do. And for those reasons, I think justifiably they will take a rather cautious approach.”