If Iranian supplies return to the market under a revived nuclear deal, production could be cut by the Organization of the Petroleum Exporting Countries.
On the news, West Texas Intermediate crude rose 3% to $93.02, while international benchmark Brent gained 2% to $100.20.
In exchange for a freeze on Tehran's nuclear program, sanctions on Iranian oil were lifted. Efforts to revive the agreement intensified after Joe Biden became president.
Iran dropped some of its main demands on Monday, including a demand that international nuclear inspectors close some of their investigations, after recent talks showed some progress.
If sanctions are lifted, Iran could potentially start selling oil in its reserves, but it would take about a year and a half to reach its full production capacity. According to analysts, a return of Iranian oil would boost the global market by a million barrels a day.
The Saudi Energy Minister said on Monday that the organization could cut output if the crude futures market is not balanced.
It would be a reversal of the effort to return production to pre-pandemic levels. As demand for oil collapsed in the early 2020s, the Organization of the Petroleum Exporting Countries and its non-member partners agreed to cut oil production. The last two years have seen a gradual increase in production by the Organization of the Petroleum Exporting Countries.
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